Senator Jimoh Ibrahim has defended the new loan request by Bola Tinubu’s administration.
The lawmaker who represents Ondo South Senatorial District, shared his view while appearing as a guest on Channels TV on Tuesday.
According to him, borrowing $2.2 billion for a population of 250 million persons is not a bad idea.
Ibrahim described the $2.2 billion Tinubu’s administration has proposed to borrow as “too insignificant, minute money,” adding that “this is just lunch money”.“$2 billion to 250 million people to finance deficit budget of a year that will end in less than 60 days.
“Good effort from the government; if Nigeria will understand. We need to encourage the government to do more,” he said.
He continued,”A deficit budget helps in economic development. If this loan comes to our committees, I don’t think anyone is going to say he is against it. For what?
He argued that the country borrows for development, citing the instance of borrowing to fund Ajaokuta Steel Company Limited.Do you borrow to put in your bedroom? You are borrowing for development,” he said.
“Let’s take a scenario as a case study, if you borrow money for the purpose of Ajaokuta funding,” he added.
“30% of houses you build in this country, you need iron. Now if you have your own Ajaokuta running, imagine how many jobs it will create, how many taxes will come into the government, how many VAT will come into the government.”
Senator Ibrahim also stated that Nigeria’s debt servicing rate is fair given the prevailing market rates in the global space.
He said, “Let’s look at debt ratio, debt servicing, the money you are bringing in is called capital injection. Allow the Tinubu administration to open up the economy. You cannot be taking loan at 30% interest rate and you say don’t borrow. Who can do business at 30% interest rate?
“You cannot compare Nigeria’s debt portfolio to America’s. Today, America’s debt is about $45 trillion but they owe no one. They simply print dollars and send it to the country because dollar is a global currency.
“Why don’t you talk about the fact that we can’t find the impact of Boko Haram again, do you see Boko Haram coming to Abuja as it was during the previous administration?
“If you bring N100 billion and say this is what we want to spend this money on and anyone who doesn’t spend it right will face public execution, no one will steal again.
“If you look at what Jonathan left when he was leaving government, it was $18 billion but Buhari left it at a deficit of unknown numbers, so Buhari administration is a perfect example of what you have said – who left the economy in financial problems but now we are back.”
“One thing about Tinubu is that he will not steal Nigeria’s money, steal for what, he was comfortable before he came in,” he argued.
However, Nigeria’s loan acquisition has continued to raise eyebrows lately. According to report, in just eight months under Tinubu’s government, Nigeria has spent N7.4 trillion on debt servicing, dwarfing the N3.6 trillion spent on capital expenditure.
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