The House of Representatives on Thursday directed its Committee on Aids, Loans, and Debt Management to carry out a comprehensive audit of all loans obtained by the federal and state governments since May 1999, which stood at N121.67 trillion.
The directive was consequent upon the adoption of a motion sponsored by Lanre Okunlola (APC, Lagos) titled “Need to Ensure Public Debt Oversight on the Federal and State Governments Loans and Proper Utilisation of Borrowed Fund”.
In his lead debate, Okunlola said according to the data recently released by the Debt Management Office (DMO) as of March 31, 2024, Nigeria’s public debt profile, includes both external and domestic debt.
He submitted from the data it was clear that the debt has grown significantly over the years and currently stood at N121.67 trillion ($91.46 billion) with loans sourced from both domestic and international lenders by the federal and state governments to fund various projects and budget deficits.
“Nigeria’s debt rose by N24.33 trillion in three months from N97.34 trillion ($108.23 billion) in December 2023 to N12 1.67 trillion ($91.46 billion), according to the same report.
“Although borrowing is a vital means for financing development, unchecked debt accumulation poses serious risks to Nigeria’s fiscal stability and future economic growth.
“The 1999 constitution of the Federal Republic of Nigeria as amended, the Fiscal Responsibility Act (2007), and the Debt Management Office Establishment Act (2003) mandates the National Assembly to approve all government loans and ensure their proper utilisation.
“Over 40% of developing countries, including Nigeria, currently spend more on debt services and repayments of loans, leading to inefficiencies in government finances at the expense of funding critical sectors of the economy such as education, healthcare, infrastructure, and social policy”, he stated.
Okunlola expressed dismay that there are growing concerns regarding the lack of proper oversight and transparency in the management and utilisation of borrowed funds by both the federal and state governments hence the need for strong financial oversight to ensure the effective use of sourced loans and an effective delivery of public services through thorough and transparent utilisation of funds.
“Many loans from state governments are drawn from commercial banks and certified by the Federal Ministry of Finance are contracted without full compliance with constitutional requirements for National Assembly approval.
“Additionally, there are instances where borrowed funds are not effectively utilised for their intended purposes, undermining the benefits of such loans to the citizen.
“Contrary to the illusory image of an oil-rich country, Nigeria is a heavily indebted country with a huge debt portfolio.
“Debt is a cleverly managed re-conquest of Africa aimed at subjugating its growth and development and prolonging increasing debt services is not favourable for the overall wellbeing of the economy”.
The motion was unanimously passed without debate, while the committee was given one month to complete its assignment and turn in its report.