Nigeria Risks Losing Foreign Assets Through Reckless Borrowing, CSOs Warn | The Guardian Nigerian News

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*Blames the National Assembly for the country’s growing debt problems

* Says reckless lending is responsible for Nigeria’s political challenges

*Exercise to guide plans for the 10th National Assembly

Civil Society Organizations (CSOs) have expressed concern about Nigeria’s rising debt profile, describing it as a “debt trap” already worsening the crisis-ravaged country’s economy and costing the nation its external assets.

CSOs made up of the Civil Society Legislative Advocacy Center (CISLAC) and Christian Aid in partnership with Transparency International, TI), noted that Nigeria is currently in a debt crisis with a fiscal deficit well above the legal threshold for 3 percent, an increasingly unsustainable. debt profile and a growing debt service that has been aggravated by the increase in interest rates, among others.

Speaking at a press conference yesterday in Abuja, CISLAC Executive Director Auwal Musa-Rafsanjani lamented that the National Assembly has failed in its constitutional duty to checkmate the excesses of the executive arm of government and therefore , is largely to blame for the current debt. crisis facing the nation.

He said that due to the “rubber stamp” attitude of lawmakers signing off on or approving loans that the executive has been taking in recent years without fully understanding their implication for the economy and for generations to come, Nigeria is now in a money trap. debt. As the government continues to borrow from private creditors, it deepens the debt crisis and increases the human cost.

Auwal noted that “just two decades after then President Olusegun Obasanjo’s buyback agreement of the Paris Club debt relief deal, Nigeria is already in another debt crisis with an inevitable human cost.

“With limited access to more financing on concessional terms and with the increasing presence and influence of private creditors in its debt profile, Nigeria’s national debt is growing and placing the country in an increasingly precarious position.

He said “part of the crisis we have is that when new or incoming legislators come they hardly get their bearings and that is what CISLAC and Christian Aid are going to be working on. We will organize guidance on our debt situation, our financial situation for all the relevant committees when they form those committees.

“We have launched a research product that focuses on exposing and challenging the role of private creditors in hindering people’s recovery to enhance the urgency with which the international community must address the sovereign debt crisis.”

Lead program coordinator, Christian Aid, Uzor Uzoma, further explained that most government lending is done without recourse to the law, and unfortunately, donor legislators read correctly to ensure that constitutional provisions regarding loans are followed. loans. He advised Nigerians to get their Permanent Voter Cards (PVC) and elect worthy leaders in the upcoming general election.

“We make policies and then we go against the same policies that we make and our government signs these documents without looking at the content. We relate the debt against the Gross Domestic Product (GDP) and that is not correct because the truth is that things are not done that way. As it stands now, I hear that President Buhari is still asking for another loan now that he is about to step down,” he said.

The Program Manager, Tax Justice, Mr. Chinedu Bassey adds that “The laws are very explicit. Sections 34 to 36 of the Fiscal Responsibility Act 2007 specify what these loans must be used for and the threshold with respect to concessional loans.
“But a new development in the Finance Law of 2019, a section of that law was amended and instilled a very ambiguous clause against the previous statement that the loan must not be used for anything other than capital projects that have the propensity to pay the loan. . Now it has been instilled that the president has the right to borrow for any other reason.

Nigeria’s net external assets shrank from Naira 7.1 trillion to Naira 4.8 trillion in July 2022, the biggest monthly drop since 2019 and this is seen to be due to rising external liabilities such as rising of loans from the debt market or from direct loan facilities, according to press reports.

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