The Minister of State for Budget and National Planning Prince Clem Agba explained that the federal government secured loans to give the country an infrastructural facelift.
He said that Nigerians first need to understand the “terms and conditions” of the loans the government seeks before they dismiss the move.
He stated this on Saturday on a tour of the still-under-construction 7.5 kilometres Rural Road Intervention Project, Lejja, Nsukka Local Government Area, Enugu State.
Agba said that requests for loans by the government should be frowned upon when “you borrow to eat”, but when the loan is for something productive “you benefit”.
The minister said, “A lot of people talk about the borrowings by the present government. You need to understand the terms and conditions of the loans we are taking and what they are being used for. What is bad is when you borrow to eat, but if you borrow for something productive, you benefit.
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“The interest rates we are paying for these loans we are taking is not up to 3 percent and we have a 10 to 20 years moratorium. That is within those periods, we are not paying anything and some of the loans have up to 40 years repayment period. So, if you look at what it would take to pay back the loans we are taking, it could be considered as gifts.
“We are trying to connect our rural roads to urban roads and to the railways. You could see that we are spending a lot of money across the country on road construction. But if we don’t develop our rail sector, our roads would continue to fail because of the pressure on them. In other more developed countries, heavy things are being moved on rails. That’s what we are trying to do.”
A Little More Info
According to Ceic Data, Nigeria’s debt in 2020 accounted for 18.9 percent of the country’s nominal GDP.
The data’s all-time low was in Dec 2010, when it stood at 9.6 percent, but its all-time high was recorded in 2020.
The government’s debt hit $73.7 billion in September 2020, while the nominal GDP stood at $105 billion in the same period.
Between 2013 and 2017, the country’s debt recorded a steady high, moving from N8.32 trillion in 2013 to N22.7 trillion, and currently stands at N32.22 trillion.
