Senator Jimoh Ibrahim of Ondo South, a senator, has stated that President Bola Ahmed has no choice but to borrow from the global market in order to cover the massive deficit left by the administration of former President Muhammadu Buhari. He has not been deterred by growing criticisms of the Federal government’s ongoing borrowing to fund budgets.
When answering questions from reporters at the conclusion of the Senate Committee on Finance interactive session with the Federal government’s Economic Team, Senator Ibrahim, an Ambassador designate, stated that Tinubu’s administration would be wasting their time if they did not borrow now because the lending market would soon dry up. The market for international loans will vanish.
You can never get it back once that’s gone, no matter how hard you try. Having sufficient funds now to deal with the situation and begin repaying those loans is the plan. Dubai, which has 12 million residents, owes $186 billion.
The overall debt of Nigeria is approximately $103 billion. This implies that Dubai even owes Nigeria a lot more. There are twelve million people.
Two hundred and fifty million Nigerians are even crying over their debts. Dubai’s borrowing is now complete. They no longer borrow money.
“But they are now repaying,” he added. And each year, they repay almost $20 billion. And they can do that because they make enough money.
If you don’t take out loans, how do you grow? I fail to comprehend. Borrowing is an essential tool for development. You know, it’s equivalent like shifting into gear four on your car and then into gear five. You can feel more at ease. That engine won’t start, though, if you put your car in gear two and try to race at 120 kilometers. Therefore, the fact that resources are available is crucial.
The trillion you owe in GDP is insufficient to save the economy. Thus, you require that additional help. Additionally, the lending market will vanish if you do not take out a loan right away.
With a GDP to debt ratio of 127%, the United States has overborrowed by 27%. It’s 95% in Britain and London. This means that $195 has been borrowed in Britain alone.
Which nation are you actually emulating, then? Ghana is the fourth-biggest IMF and World Bank debtor. Therefore, even if Nigeria’s GDP to debt ratio is 40%, there is still 60% available for borrowing. Thus, you cannot borrow to yourself if you are now telling people not to borrow and the loan market does not exist.
“You cannot lend money to yourself. How about the strategy of repayment? The payback plan will take a while to complete. It’s not something you can check out and then return within a year.
Your balance sheets are spread out. You can borrow even more money to pay off the $100 billion, don’t you? You then have no debt left. After that, you can pay back the money you borrowed to clear $100 billion over ten or twenty years.
“The lender will agree with you on that,” the politician added. However, you can’t lend money to yourself if you don’t borrow anything and the lending market vanishes. In other words, you will employ methods and means to finance the economy by reducing spending.
You will therefore experience inflation. Unemployment will be a part of your life. The dollar’s worth is going to decline.
“And the world will fall, of course. The National Assembly did, however, sanction borrowing for the federal government last year, sir, they stated. Additionally, they continued to express dissatisfaction with the budget’s lack of implementation.
The National Assembly’s approval of federal borrowing last year is cumulative borrowing that has affected you. Therefore, in order to claim your book, you must obtain a resolution from the National Assembly to roll over those debts when they mature. It’s debt management at that level, then.
According to Senator Ibrahim, previous Buhari implemented a $33 million ways and means policy by printing $33 million more.
When it comes to the initial money infusion, Buhari used $33 million in ways and means, which implies he printed $33 million more. You won’t be able to recover from that one in two years. You borrowed $68 billion from foreign sources while printing $33 million at home.
You also want Nubu to pass it within the next two years. He’ll be a sorcerer. The $33 million means and ways are simply too much.
And it’s not the ideal method to manage an economy, in my opinion. In fact, when all of this occurred, we were in financial jeopardy.
