Former Deputy Governor of Central Bank of Nigeria (CBN), Professor Kingsley Moghalu has cautioned the All Progressives Congress’ (APC) government against taking a $22.79b loan.
Professor Moghalu stated that Nigeria cannot afford to spend over 50 percent of her budget on debt servicing, adding that there are ways the country could raise money to fund projects.
From L to R: Fela Durotoye, Kingsley Moghalu, and Sowore Omoyele were young alternatives in the 2019 Presidential elections. (C) Twitter/MoghaluKingsley
Moghalu who is a former Presidential candidate on the platform of Young Progressive Party urged the government to increase the TAX base, end fuel subsidy and also block leakages in order for funds to be available for development.
Recall, the Senate led by Ahmad Lawan had on March 5, 2020, approved Buhari’s $22.79b loan request. The Senate president had said that the loan when received will boost the economy.
Taking to his Twitter to announce the approval, Lawan said, “It is our hope that this loan will turn around the economy of Nigeria and bring some positive influence on the Gross Domestic Growth (GDP) of this country. This is the more reason why we are going to be responsible that it is well utilized.”
But Moghalu is of the opinion that the loan will put the future of Nigerians into slavery. In a message posted on his verified Twitter handle, the economist wrote, “$23 billion external loan request approved by the Senate will only plunge Nigeria into debt slavery.
“Over 50% of our revenues go to debt servicing already. In a few years this figure will approach 80%. Expanding the tax base efficiently into the informal economy (NOT increasing taxes on the compliant few or VAT), removing fuel subsidy, and plugging leakages in government spending would be better approach to solving our fiscal crisis.
“Massive foreign borrowing has not been beneficial in the past. This won’t be different. The problem appears to be a lack of will to undertake essential reforms in order to remain ‘popular’ with the masses with one hand while selling their future into slavery with another hand. Poverty will keep increasing, and structural econ transformation will remain difficult.”
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