Leading Economist and analyst, Dr. Austin Nweze has expressed fears on why the federal government is scattering the nets of borrowing abroad considering the fact that the particular budget it intends to facilitate is lower than the target loans put together.
In an interview Thursday, he queried the target sources of repayment should the World Bank loan be approved and delivered in record time.
According to him, “my concerns include the sources of fund to pay back even through the loan is said to be coming at a very low interest rate of about 1.5 per cent or so’.
“Besides, the Niger Delta violence and bombing of pipelines is still ongoing, insurgency in the North is yet to be fully contained, our oil production level is low and if you look at all these variables, you begin to ask questions on how the loan would be paid back as agreed.
“Again, have we diversified the economy so as to generate income from other sources? The projects you are putting in the money are they going to generate income and how? These are issues that need to be considered before going aborrowing”.
But the Director General of the Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf in another interview said addressing issues bordering on infrastructure is key to driving the economy to stability.
He said “To me, borrowing from World bank is not a bad idea because the loan is very concessionary in the first instance”.
“The facility can be used for infrastructure investments. Besides, government alone cannot fix
these infrastructures even with the loan. There is still need for private sector complements to it.
A breakdown of the loan proposal shows that $11.274 was for projects and programmes, special national infrastructure programme, $10.686bn, Euro bonds, $4.5bn and federal government budget support of $3.5bn.
But in the views of other experts, managing the rising domestic debts is key if Nigeria is to recover from the present recession period.
