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Senate: Loan Facilities Are Not National Cake

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Worried by Nigeria’s ever increasing debt profile, the Senate of the Federal Republic of Nigeria on Thursday called on the Federal Government not to national cakemortgage Nigeria’s future through loan facilities.

This assertion was made by the Senate Committee on Local and Foreign Debt while interacting with the World Bank Nigeria Director, Rachid Benmessaoud, at the National Assembly.

Alarmed by recurrent loan receipts that would require many decades to offset, the committee urged the Federal Government to immediately seek to diversify the economy in the face of dwindling revenue occasioned by the nose-diving price of crude oil on the international market instead of putting the unborn generation into a precarious position of having to repay debts that it never personally incurred.

A member of the Committee, Senator Aliyu Wamako noted that Nigeria has a vast array of untapped resources in many sectors like mining and agriculture and the Federal Government should look to alternative ways of revenue generation other than crude oil. He lamented the mentality of various Nigerian agencies and establishment who receive foreign aids and loans without substantially accounting for the money received, declaring that such loans were not ‘national cake’ that could be spent without repercussion.

Another member of the committee, Senator Suleiman Nazif, bemoaned Nigeria’s current debt profile, stating that the loans are accumulating, especially at the State Government tier. He advocated that the time limit for the payment of loans should be confined to the administration that incurred the debt so that subsequent administrations will not come into power and begin to repay debts rather than spend money on developmental programs.

Inquiring about Nigeria’s current debt profile and the way forward from the World Bank, chairman of the Committee, Senator Shehu Sani decried Nigeria’s tendency of receiving loans that the next generation couldn’t pay, especially since those loans were not generating any appreciable revenue. He appealed to the World Bank and various international development agencies to help Nigeria in capacity building especially in the agricultural, power and mining sector, citing Greece and other countries’ debt conundrum in recent years as an example of what will happen to a country that keeps borrowing. He specifically noted that many Nigerian farmers needed help as their output were especially poor and not significantly contributing to Nigerian economy as they ought to.

Responding to the concerns of the committee, Mr Rachid Benmessaoud outlined the roles and responsibilities of the World Bank as not only a financial institution that regulated and offered loans, aids and financial facilities but also as one that offers relevant fiscal advice and financial recommendations. He noted that the World Bank was especially ready to partner with Nigeria in reviving agricultural sector as that was the best way to reach the poor.

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The Senate | Federal Republic of Nigeria | National Assembly Complex | Three Arms Zone, PMB 141, Abuja | Nigeria