Why we are turning to debt, by Buhari

Nigerian President Muhammadu Buhari speaks with US President Barack Obama(not seen) during a bilateral meeting on the sidelines of the 71st United Nations General Assembly in New York, on September 20, 2016. / AFP PHOTO / JIM WATSON

Nigeria’s President Muhammadu Buhari has said the country is looking to raise funds by borrowing from World Bank, the African Development Bank, the Chinese Ex-Im Bank and other development finance partners but with a promise that the borrowed funds would not be frittered away.
Buhari said in an article published online by Bloomberg that his government had already begun to raise a $1 billion Eurobond, the country’s first in three years, as part of broader plans to revive Nigeria’s almost comatose infrastructure and strengthen local food production capacity.
“In the face of dwindling oil revenues, we are turning to debt,” Buhari said. “We have begun raising a $1 billion Eurobond, our first in three years.”
“We are also raising debt from the World Bank, the African Development Bank, the Chinese Ex-Im Bank and other development finance partners.”
“Unlike in the past, when borrowed funds were frittered away on unproductive ventures, we will ensure their investment in the revival of stalled road, rail, power and port projects, and in agricultural initiatives that will significantly boost domestic production of food.”
The president reaffirmed his commitment to repositioning the country’s economy but noted that the challenges it currently faces were occasioned by the failure of the country’s past leaders to convert the gains recorded during years of oil boom “into more jobs and significant improvements in standards of living.”
Nigeria is in recession as a result of plunging global oil prices and production but Buhari expressed optimism that with private sector partnering with the government, Nigeria may be able to rebound sooner than later.
He said, “This is why one of our main priorities is creating an environment in which private-sector capital can thrive. We are in particular using Public-Private Partnership models to support game-changing private-sector projects in power, refining, gas transportation and fertiliser production.”
Nigeria  depends on oil sales for 70 percent of government revenue but that has been slashed by low prices worldwide in the last two years.
The situation has complicated the task for the government, which has complained of being left a “virtually empty” treasury by the previous administration and the theft of vast sums of public funds.
It has struggled to pay public sector wages, while the naira currency has weakened, foreign exchange dried up and investment stalled.
However, Buhari said the economic reforms his government put in place has been yielding positive results.
“Our economic recovery plan is already showing positive results,” he said. “Investment’s share in gross domestic product is at its highest since 2010. Inflation is slowing; manufacturing confidence is rising. People are seeing and seizing opportunities to make money catering to the needs of Africa’s most populous country.
“People are seeing and seizing opportunities to make money catering to the needs of Africa’s most populous country.”
The president hoped the situation would improve next month when the government’s ambitious Social Investment Programme would have commenced.