The Budget Office of the Federation has come out to support the Nigerian Senate President view of Nigeria being poor thereby necessitating the need to borrow (loans) funds from international bodies. ayokinews.com reports
This was made known by the Director Budget Office of the Federation, Ben Akabueze, while featuring on Politics Today, a current affairs programme on Channels TV.
Akabueze made it known that those criticizing the current debt profile of the country aren’t seeing things in its actual form while also stating that the country doesn’t have money to fund infrastructural projects as demanded by Nigerians thus making the need to borrow funds (loans) to carry out projects across the country.
“It is important, first of all, for that point to sink into Nigerians that we are not a rich country; we are a potentially rich country. But the reality today is that we are a poor country because looking at the definition of poverty is, when the resources you have simply cannot cover your needs you are poor. At the level of individuals, sometimes the decision as to what you do is easier. But at the level of a nation, it is not that straightforward.
“At the level of a nation, the government has certain mandatory obligations. For instance, the Constitution says the primary duty or function of government is the security and welfare of the people. So, if the security of the people is threatened, government cannot say or throw its hands in the air and say ‘we don’t have money, therefore, there is nothing doing.’ There are mandatory obligations that government has to the people which it has to figure out a way to deal with. And globally, borrowing is one of the ways that government does that as long as the government has its eyes on sustainability.
“It will be hard to find that country around the world that does not borrow. So, borrowing per se is not an issue; and sustainability is simply about putting your eyes on making sure that when it is time to pay up the debt that you borrowed (sic), that you can do so.”
Speaking on the payment of loans taken by the Nigerian government, Akabueze said that the exchange rate between naira and dollar before and now are not the same as there no yet rate stability.
Akabueze also added; “It is also true that government has taken loans substantially since 2015. First, there was recession in 2016/2017. If you recall in 2015, oil prices sank, leading up to 2016. That triggered recession for many oil producing and oil dependent economies. That creates the need to borrow. When an economy goes into recession – and that is part of what I was saying that a nation is not the same as an individual – nations tend to act counter cyclically. When you find yourself in a recession, the time-tested way to get out of recession is to what we call ‘spending your way out of recession”.