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Experts Kick As FG Defends ‘Sensible Borrowings’ To Fund Infrastructure

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Against the backdrop of mounting criticism over Nigeria’s debt sustainability, the Minister of Finance, Zainab Ahmed, has said the Federal Government is borrowing “sensibly” to cater to the country’s infrastructure needs.

But some analysts and economists who spoke to Vanguard yesterday disagreed with this position on the grounds that the country’s revenue earning capacity cannot carry the debt burden.

However, addressing a press conference on Nigeria’s latest gross domestic products, GDP, outing Ahmed said if Nigeria does not invest in infrastructure, “we will regret it.”

As of March 2021, Nigeria’s total public debt had hit N33.1 trillion, while an additional N5.6 trillion may soon be added to the debt burden on account of FG’s 2021 borrowing plans.

Commenting on the concerns, the minister stated: “We are borrowing sensibly and we are investing in rail and other infrastructure; If we do not do these investments, we will regret. These investments will return revenue in the future.”

‘Our debt situation not sustainable’

But an economist and private sector advocate, Dr Muda Yusuf, immediate past Director-General, Lagos Chamber of Commerce and Industry (LCCI), stated: “The current debt challenge is about sustainability. A situation where about 80 percent of actual revenue is used to service debt is not sustainable.

“We need a comprehensive review of the debt management framework. This would require close scrutiny of government expenditure and revenue optimization options.

“Of course, there is merit in borrowing to fund infrastructure, but it is also a problem if our actual revenue can hardly cover our recurrent expenditure. The situation calls for major expenditure reforms especially around the cost of governance.

“Policy and regulatory reforms are also imperative to boost investors’ confidence, accelerate growth, and impact positively on revenue and job creation.”

Also, another finance expert, Professor Uche Uwaleke of Nasarawa State University, Lafia, who is also the President of the Association of Capital Market Academics of Nigeria, said: “Borrowing for infrastructure is not a bad idea. No doubt, there’s been a noticeable improvement in transport infrastructure, especially railways. The challenge is that government revenues have not measured up and so the burden of debt servicing has continued to mount crowding out development funds in the process.

“Faced with this challenging situation, the government is advised to engage the Private sector more in the provision of physical infrastructure while deploying scarce resources effectively to human capital development.”

‘Nigeria neck-deep in financial mess’

David Adonri, Managing Director, Highcap Securities, said: “Through its reckless external borrowing, the Federal Government has already forced Nigeria into a foreign debt trap. We are already neck-deep in a financial mess, judging from the debt service ratio which is over 90%. We cannot rule out sovereign default in due course if new foreign loans are not taken to meet repayment obligations.

“External borrowing to develop infrastructure is unwise. No economy that is building to last does that. Well-managed economies issue domestic debt to finance infrastructure development. Foreign investors can invest in such debt in local currency and will be paid back in domestic currency. By this, the government will not be saddled with foreign debt obligations.

“External borrowing to develop infrastructure is unwise. No economy that is building to last does that. Well-managed economies issue domestic debt to finance infrastructure development. Foreign investors can invest in such debt in local currency and will be paid back in domestic currency.

“By this, the government will not be saddled with foreign debt obligations. The government is also approaching the infrastructure development programme wrongly. The effort ought to start with the development of the engineering infrastructure (Technical education, Metallurgical Industry, Electric Power Industry, Chemical industry, and Energy industry) that will give the economy, the heavy industrial base which will domestically generate secondary infrastructure (Roads, Rail, Ports, Schools, and Hospitals). With an emphasis on secondary infrastructure, in absence of primary infrastructure, the economy cannot be domesticated. It will still remain import-dependent; a malaise they are wrongly trying to cure.

“Finally, through appropriate public policies, the private sector can develop infrastructure and hence assume the attendant liabilities. Other than debt, other financing options like Investment Trust Funds can be used to finance infrastructure.”

BIG STORY

Lagos Ministry Demolishes Illegal Gatehouse After Attack On Workers [PHOTOS]

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The Lagos Ministry of Environment and Water Resources has commenced the demolition of an illegal gatehouse erected by the management of an estate on January 3, 2025.

The action follows repeated warnings from the ministry, which had earlier alerted the estate about the unlawful construction.

Sources revealed that the estate proceeded to build a soakaway system on the road immediately outside the entrance gate, despite several official warnings from the ministry.

This prompted the ministry’s task force to intervene on January 2, 2025, to dismantle the septic tank that was being constructed.

However, during the operation, workers from the ministry were reportedly attacked and locked up by the estate’s management.

In response to the harassment of its workers, the Lagos Ministry of Environment and Water Resources escalated its actions, directing the demolition of the illegal gatehouse on January 3, 2025.

The demolition is part of the ministry’s broader efforts to ensure that constructions adhere to legal and environmental standards.

Details later…

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BIG STORY

Inside Jigawa: One Dead, Groom Hospitalised As Bride Allegedly Poisons Wedding Guests

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A wedding in Jigawa State has turned tragic after a bride allegedly poisoned food served at the reception.

The incident reportedly left the groom critically ill and one of the wedding guests dead.

The incident occurred in the Jahun Local Government Area of the state.

Eyewitnesses suggested that the bride’s actions may have been driven by a personal vendetta.

Speaking on Friday, the state Police Public Relations Officer, Shi’isu Adam, confirmed the incident and stated that an investigation was underway.

“We received a report that the bride had tainted the food served at the wedding reception, leaving the groom critically ill.

“Police have arrested two suspects in connection with the alleged food poisoning incident that occurred during a wedding ceremony in the state,” Adam said.

He revealed that the two suspects are the bride and another female, adding that they are in custody and being interrogated by the Criminal Investigation Department of the command.

The police spokesperson added, “We will do everything in our power to ensure that justice is served.”

According to the police spokesman, all the wedding attendants who consumed the poisoned food have been discharged from the hospital, except for the one person who was confirmed dead.

“The command is currently investigating the circumstances surrounding the incident, and we will provide more details as soon as possible.

“For now, we can confirm that the incident occurred, and we are working tirelessly to unravel the facts. We urge the public to remain calm and assured that justice will be served,” he concluded.

The identities of the deceased, the groom, and other victims have not been disclosed by the authorities.

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BIG STORY

Peter Obi Hellbent On Inciting Nigerians Against President Tinubu, He’s A Doomsayer — APC

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The All Progressives Congress (APC) has described Peter Obi’s New Year message as “misleading and an attempt to score cheap political points.”

Obi, who was the presidential candidate of the Labour Party in the 2023 elections, used his New Year message to criticize President Bola Tinubu, expressing grave concerns over institutional corruption, mismanagement, poverty, hardship, and an escalating debt profile.

The former governor of Anambra stated that corruption has been deeply entrenched in government and nepotism has become the norm under Tinubu’s leadership.

He also demanded “vigorous, positive actions” from the administration to bring succour to Nigerians.

However, in a counter-statement on Thursday, Felix Morka, APC spokesperson, stated that Obi’s assessment contradicted all indicators showing that the nation’s economy is rebounding across various sectors.

Morka accused Obi and members of the main opposition Peoples Democratic Party (PDP) of relentlessly trying to incite public outrage against the Tinubu administration.

The APC further accused Obi of portraying himself as “a leading doomsayer, omniscient and philosopher’s stone” while failing to deliver “meaningful achievements during his eight-year tenure as governor in Anambra state.”

“In reality, 18 months later, the economy, under President Bola Ahmed Tinubu’s administration has shown a steady record of progress,” the statement reads.

“Despite these and other initial beneficial outcomes of ongoing reforms, the administration is doubling its effort to ensure their fullest benefits for the transformation of our country.

“It is a thing of irony that Obi, who now arrogates to himself to be omniscient and philosopher’s stone, when it comes to our nation’s challenges, left no record of significant achievement, let alone transformation of any kind, in his eight-year tenure as Governor of Anambra State.”

“Like his co-travellers in the PDP, Obi’s obsessive pessimism and endless but futile effort to incite public outrage against the administration is borne out of the realization that Tinubu is unwittingly cementing their political irrelevance by his visionary and full-throttle reform.”

“Under the banner of the Renewed Hope Agenda, President Tinubu is dutifully turning our nation’s fortunes around. We urge Nigerians to remain confident of better days ahead.”

The ruling party added that Tinubu’s goal is to reduce inflation from 34 percent to 15 percent in 2025.

“With the vigour in the administration’s war on corruption, evidenced by ongoing investigations and trial of well-heeled Nigerians, Obi’s pontification on the urgent need to tame corruption is a clear case of carrying coal to Newcastle,” the party added.

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