'Nigeria plan for new loan fit make sapa enta gear two' - Experts

Onyinye Chime

BBC News Pidgin, Journalist

Nigeria plan to borrow new loan of more dan N11 trillion to finance di 2023 budget deficit or shortage mean say di goment go di kontri go over shoot im borrowing limit next year.

Di kontri Finance minister, Zainab Ahmed say part of goment plan to meet di budget shortage na to borrow moni from local and international sources, plus also sell some of di kontri assets or properties.

Di minister paint two possible picture wey fit happun for di budget deficit wen she appear before di House of Representatives Committee on Finance to defend the 2023-2025 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP). And dis two possibility all depend on weda goment kontinu to pay petroleum subsidy or not.

Di first possibility be say deficit or shortage to be N12.41 trillion for 2023 if goment spend N6.7 trillion on petroleum subsidy for di whole year.

Di second possibility na say if goment kontinu subsidy reach June 2023 den stop. Here goment go spend N3.3 trillion for petroleum subsidy.

Any way e go, di two proposals get budget deficits wey over shoot di limit wey di Fiscal Responsibility Act wey say deficit must not pass 3% of di Gross Domestic Produce (GDP).

Di wahala wit Nigeria borrowing more moni be say already, di interest on di loan wey dey, don pass di whole moni or income wey di goment dey make based on di financial report goment release April dis year.

Expansionary monetary policy

Di oil price collapse for 2014 seriously affect Nigeria revenue generation or income.

And di coronavirus pandemic plus di lockdown wey follow push di kontri enta anoda recession for 2020.

To reverse di impact of recession, Buhari goment adopt di Expansionary Monetary policy – di policy means say goment dey spend heavily in order to inflate or comot di kontri from recession.

Samuel Atiku wey be governance expert and Senior Programme Officer for International Budget Partnership, say Nigeria goment dey do expansionary policy na im make di goment dey spend much more moni dan dem dey make. And dat na di reason behind di heavy debt wey Nigeria dey owe.

“Goment don dey run dis expansionary fiscal policy, essentially, make we spend heavy in anticipation say as you put di moni into di economy, e go inflate di economy into growth.”

But Atiku point out say, di Nigeria economy “no dey strong enough to raise moni for di goment to do dis kain spending diafor, dem gatz to borrow from outside di kontri.

Impact on economy

According to Atiku, if to say na ordinary pesin or like say na business dey pass thru wetin Nigeria dey see now, we go say dem dey bankrupt or sapa don enta gear two.

But as a kontri, “Nigeria na going concern” wey get di power to print as much moni as im like, im tok.

Come add say, di more wey goment dey print moni to spend for im expansionary policy, di more di value of di moni go dey reduce.

“If you dey use N1 buy bread before fore example, now you go use like N10.

E mean say pipo dey spend more moni now dan dem dey spend before.

“Dis dey impact on di poor masses, quality of life go drop. Society go fall apart and pipo go either enta road to do i-no-go-gree or di rate of kidnapping and crime go increase as we dey see for Nigeria.”

Debt go chop 100 percent revenue

For second quarter of 2022, di International Monetary Fund (IMF) draw ear give Nigeria say debt servicing or repayment go chop 100 per cent of federal goment revenue or income by 2026 if goment fail to implement adequate measures to improve revenue generation.

According to IMF Resident Representative for Nigeria, Ari Aisen, only interest payments alone, on di moni wey Nigeria dey owe fit wipe out every single kobo wey dem make for di next four years.

Between January and November 2021, di goment spend N4.2tn to service di loan wey dem collect.

Dis amount represent 76.2 per cent of di N5.51tn income wey dem make during dat period.