by Hauwa Gambo
While he presented his 2012 budget, President Goodluck Jonathan has promied that his government would not add to the nation’s huge debt burden – especially as, with the Sovereign Wealth Fund, and other policy thrust his economic team seemed focus on saving.
That promise now appears to have been broken.
Earler today, the present asked the National Assembly for approval to get a
$8 billion foreign credit lifeline to finance some pipeline projects.
The president asked lawmakers to approve the request in addition to pipeline projects included in the country’s Medium Term (2012-2014) external borrowing plan.
According to a memo to both houses of the assembly, the government plans to obtain up to about $7.91 billion in low interest credit facilities from some international finance institutions, including the World Bank, African Development Bank (ADB), Islamic Development Bank (IDB), Exim Bank of China as well as Indian credit lines – between 2012 and 2014.
If that fails, there is the option of an annual $2.64 billion loan withdrawal. Both options will certainly bring Nigeria close to it’s pre-2004 position when it paid off debts to the Paris Club, under the supervision of then minister of finance, Ngozi Okonjo-Iweala.
According to the Debt Management Office, Nigeria’s current total debt profile as at September 2011 is about about N6.3trillion – a total of estimated N876.4billion extenal debt and N5.4trillion domestic debt.
It will be recalled that Dr. Okonjo-Iweala, who is now coordinating minister for the economy, had told lawmakers, following the failure of full fuel subsidy removal, that the government would have no choice but to borrow.