Home » News » N6.08 Trn Budget Indebts Nigeria By N5bn Daily – PDP

N6.08 Trn Budget Indebts Nigeria By N5bn Daily – PDP

…alleges Buhari plans to use 1.8trn to repay campaign debts, fund politics
Patrick Osadebamwen, Abuja
The All Progressive Congress (APC) led Federal Government of Nigeria is plunging Nigeria into a daily deficit of N5bn in loan to fund parts of its N6.08 trillion budget for 2016.
Opposition Peoples Democratic Party (PDP) said this yesterday explaining that the the N1.84trn for the 2016 budget translates to a daily borrowing of N5bn a loan it is convinced will lead to acollapse of the economy.
PDP alleged that the N6.08 trillion 2016 federal budget presented by President Muhammadu Buhari is a huge fraud, warning that with the proposed N1.84 trillion borrowing, the nation is going the way of Greece.
National Publicity Secretary of the Peoples Democratic Party (PDP) Olisa Metuh, explained that the APC led federal government is borrowing N5 billion a day for the next 365 days, starting from January I, 2016, without corresponding provision for economic production and a clear repayment plan.
It maintained that such a scenario spells doom for the future of the nation.
“Some people may be wondering why we raised an alarm about the budget. The reason is simple. When we analysed the budget, we discovered it is a misshapen attempt at a Keynesian economics of applying deficit spending to stimulate growth even when studies have proven that GDP growth rates decrease by over 50% when debt goes from low or moderate to high,” Metuh stated
He further added that: “we know the borrowing here is to pay huge campaign debt and fund a political war chest.
“By every standard, this budget is a booby trap against the nation. When you break down the proposed N1.84 trillion borrowing, you discover that it amounts to borrowing N5 billion everyday for the 365 days in 2016. The questions are: for what specific projects are they borrowing N5 billion per day and how do they intend to pay back?
“The President should explain to Nigerians how they intend to pay back the loan. Is it by continuous borrowing to service the interests, and does he intend to accumulate colossal debt for future generations of Nigerians?
“The truth is that this administration cannot justify this proposal. There is no known economy in the world where you can justify borrowing N1.84 trillion without specific projects and precise repayment outline. This is worse still in an oil-driven, mono-economy at a time crude oil is selling at $30 dollars per barrel and is speculated to go down to about $20 dollars or even lower in the next one year. The idea can only come when you diversify the economy and boost production capacity in manufacturing and other critical sectors, a direction, which the budget clearly failed to provide.
“From all indicators, the borrowing will be negative. They are driving us to be like Greece, and to plunge us into unnecessary debt. When the PDP took office in 1999, we achieved the cancellation of inherited debts. This administration, in seeking to accumulate debts, should know that there is no possibility that any country in the world will give us debt cancellation anymore.”
Metuh added, “More importantly, we are really worried about negative economic policies of the present administration and the copying of strategies that failed in other economies. Recall that we had earlier alerted on the negative consequences of the retrogressive foreign exchange controls wherein this government is making it impossible for honest Nigerians to engage in free trade and regulate their personal activities.
“There seems to be the erroneous belief that the controls will create foreign exchange stability or strengthen the Naira by limiting foreign currency outflows. This policy had badly affected other countries in the recent past; including Argentina, whose new government had to reverse the policy to save their economy. Why then are we copying a policy that failed in other countries?
“In practice, the kind of crude controls the Federal Government is implementing have been proven ineffective in preventing capital flight. By limiting the local availability of foreign exchange, the controls have instead increased the demand for foreign exchange, putting greater pressure on the naira and achieving the exact opposite of what the government in its naivety believed would happen.
“The negative impacts of the ill-conceived controls include the hindering of international trade and discouraging of foreign investment.
We have seen first-hand the crippling of the private sector in the last six months, upon the implementation of these measures were out. Traders, importers and all manner of businesses are being destroyed as a result of the contrived unavailability of foreign exchange.”

%d bloggers like this: