Fayose, others raise questions for FG on oversubscribed $1bn Eurobond
Though the recent Nigeria’s $1bn Eurobond was oversubscribed up to 800 per cent, sector analysts saw the issue as a two-way traffic. Whereas many see the issue as a sure way to mortgage the future of Nigerians who may not even experience the true impacts of the bond, others including the issuing government believe the use of the fund will be transparent. The orders were in excess of over $7.8bn.
Foremost vocal development economist, Mr. Odilim Enwegbara already had queried the rationale behind Nigeria’s preference for Eurobond, which is more expensive, when it could have raised more funds at a cheaper rate from China and other sources.
While arguing that the $1b was nowhere near addressing Nigeria’s scarce foreign exchange challenges at the moment, he called for tying the funds so raised be dedicated to identified and specific projects for everybody to see, and not put it in a pool for the implementation of the budget, which may end up not being seen.
Again, the National Coordinator Fix Nigeria Campaign Organisation, Dr. Emmanuel Analiefo said the scheme would further compound Nigeria’s debt challenges now and in the future.
Apart from other financial experts who have reservations on what actually the yields of the bond is to be used for, Governor Ayodele Fayose of Ekiti State has asked the federal government to explain to Nigerians projects tied to the bond so that every Nigerian will monitor the delivery in other to bear the brunt of the repayment.
According to him, with re-payment lasting till 2032, Nigeria may be plunged into pro-longed economic misery they may not know what it was originally used for.
In a statement by his Chief Press Secretary, Idowu Adelusi, the vocal Governor challenged the government to clarify the beneficiaries of the bond, stating whether it would be both the federal government and the federating units or federal government alone.
He said “What I’m even worried about and which they must explain to us is that you cannot get a bond without committing it to the source.
“Is the repayment going to be made by direct deductions from Nigeria’s crude oil sales or from federal government share from the federation account?
“If it is going to be made directly from proceeds of crude oil accruing to Nigeria as a country, then the bond belongs to the federal, state and local governments and not federal government alone.
“The federal government is just one of the federating units making up Nigeria and revenue accruing to the country cannot be used to repay bond taken by the federal government for its own use alone.
“The federal government must therefore tell Nigerians how it intends to repay the facility from now till 2032. If it is going to be through direct deductions from revenue accruing to Nigeria, such that money would be taken from source which would not be part of the accrues to the central body, it means the $1bn bond belongs to Nigerians and it must be shared among the federating units.
“So, we have to find out and take steps. It is they bring the money and we share it; we take our percentage and they take theirs. The federal government cannot take that money and take it from source and tell us that the money, which belongs to all of us federating units, is it.”
While accusing the government of running the affairs of the country in secrecy, Fayose thundered that “We will definitely go to Court and ask questions.”
“The APC government is behaving like the prodigal son who asked for his inheritance and spends it lavishly.
“It is a prodigal government who wants to destroy this country. The rate at which they are taking loans which would keep this country indebted till 2032 is quite unfortunate.
“Currently our currency has been badly devalued to N500 to a Dollar. So, how do we pay back the Dollar? They went to tie the money to the source; the accruers outside the country where crude oil revenue goes.
“Apparently, they don’t care what happens tomorrow. They said they want to use the money to fund 2016, 2017, 2018 budgets which means after they are gone, the country can go into blazes and our children’s children can wallop in indebtedness. How can you appreciate that?
“This rate of borrowing would lead this country into serious challenge.
“At this same time, they are saying we should save for the raining day. I just want our people to know that the APC government is taking us to another side of life, one is to destroy our economy, the other one is death.