![The Central Bank of Nigeria, CBN. [PHOTO CREDIT: Ehud Kaduna]](https://i0.wp.com/media.premiumtimesng.com/wp-content/files/2022/01/20200913_161409-scaled-e1652250793565.jpg?fit=2387%2C1702&ssl=1)
A former Director-General of the Federal Radio Corporation of Nigeria (FRCN), Ladan Salihu, has advised President Bola Tinubu administration against reckless borrowing.
Mr Salihu is a member of the African Democratic Congress (ADC) which some top politicians recently adopted as a coalition platform for opposition political parties ahead of the 2027 general elections.
|
|
The politician, who resigned from the PDP to join the ADC earlier this month, spoke during an interview on Arise Television’s Morning Show on Tuesday.
He said, while borrowing is not bad on its own, it must be matched with fiscal discipline.
|
|
|
|---|
“It is not a taboo to borrow. But in governance, you have to address the core issues affecting the population. The concern of the ADC is not about borrowing, it’s about reckless borrowing that doesn’t target the real problems,” Mr Salihu said.
The former Commissioner for Information and Chief of Staff to the Governor in Bauchi State criticised what he described as reckless borrowing, poor financial coordination, and rising debt levels with little to show in terms of public welfare.
“Before borrowing, there should be a proper national consultation. What are the real priorities? Is it infrastructure? Education? Insecurity? Youth employment?
“But when you borrow strictly for Internet penetration and other projects that don’t improve the living standards of average Nigerians, it is not justifiable,” he said.
His criticism of the government’s borrowing came on the heels of the Nigerian Senate’s latest approval on 22 July of the 2025-2026 external borrowing plan of 21.5 billion dollars presented by Mr Tinubu for consideration.
Also approved by the Senate was a loan request of 15 billion Japanese Yen and a 65 million Euros grant.
The federal lawmakers also approved the issuance of Federal Government Bond of N757 billion for payment of accrued rights pension arrears as of December 2023 for the Contributory Pension Scheme (CPS).
They equally approved Mr Tinubu’s request for capital raising of up to two billion dollars through a foreign currency-denominated instrument in the domestic market.
Mr Ladan noted that Nigeria’s debt-to-GDP ratio, which stood at about 9 to 10 per cent in 2010, rose to approximately 40 per cent after the government recalculated the country’s GDP in 2014 to reflect changes in the economy. He said the debt-to-GDP ratio is now estimated to be between 50 and 53 per cent, raising concerns about the country’s debt sustainability.
He said many Nigerians are unconvinced that current spending reflects any real fiscal restraint.
He warned that without strategic financial management, the government would continue borrowing to fund basic services while overspending on the political class.
“Why should the government spend huge amounts on a section of the leadership, only to turn around and borrow for public utilities?” he asked.
Mr Salihu said the ADC is particularly worried about the poor coordination of Nigeria’s financial planning, noting that three different budgets are being discussed or implemented at once, 2024, 2025, and mid-year adjustments, without resolving key issues from previous cycles.
He said “this points to a lack of financial coherence,” he said. “There must be a complete financial restructuring.”
He also cited the recent negotiations to prevent a blackout in Lagos as an example of deeper structural problems, including mismanagement of the power sector.
He criticised the N4 trillion loan request to settle debts owed to Generation Companies (GenCos), warning of over-invoicing and inflated billing.
“Before approving any loan, an independent audit must confirm the actual financial needs,” he said. “My experience in and out of government shows that what’s presented on paper often differs from the reality.”
He listed three key ways the government can reduce its reliance on borrowing: cutting wasteful public spending, conducting proper audits, and borrowing only for clearly defined national priorities.
Nigeria’s recent borrowings
In recent months, the National Assembly approved several borrowing requests from Mr. Tinubu administration.
In July, the House of Representatives approved a $347 million loan to fund the Nigerian Universal Communications Access Project and cover additional costs for the Lagos–Calabar Coastal Highway.
READ ALSO: NNPC rules out sale of Port Harcourt Refinery
In the same month, lawmakers cleared a $2 billion foreign-currency bond to stabilise the naira and cover budget shortfalls.
Earlier, the legislature approved a N757.98 billion domestic bond issuance to settle pension arrears and unpaid salaries under the Contributory Pension Scheme.
It also approved a broader external borrowing plan under the 2025–2026 Medium-Term Expenditure Framework, including $21.89 billion, €2.19 billion, ¥15 billion, and a €65 million grant.
Separately, in July, the federal government received anticipatory presidential approval for a N4 trillion bond programme intended to settle debts owed to GenCos. The bond is yet to be issued pending debt verification.
Discover more from Premium Times Nigeria
Subscribe to get the latest posts sent to your email.
