The Minister of Works and Housing, Babatunde Fashola, has defended the Nigerian government’s use of loans to expand infrastructure in the country.
Fashola, who spoke with Nigeria’s news agency, said the country would not make significant progress without taking out loans to strengthen infrastructure.
He explained that borrowing is not a sin and is part of the very essence of growing the economy.
“It is in our own interest that the government borrows and spends on investment because this sector contributes to gross domestic product (GDP) and contributes to employment.
“I can’t stand irresponsible borrowing so let’s be clear; there must be some meaning to it.
“As long as you borrow to invest and invest in assets, we can have this debate from morning to night and I don’t think I will come out of it unsuccessful.
“I agree that everyone needs to keep their eyes open for how the money is borrowed, what it is used for and whether the debt is sustainable.
“We have just implemented a rail program through the Ministry of Transport; it’s a 100-year-old asset that you have now. So some economists say that to wait until you get the money together is a bad economy, ”the minister said.
While noting that many developed countries have created super economies through borrowing, Fashola said recent loans obtained by the federal government will not put the future of Nigerians at risk.
“We came from a colonialist background where we were told that if we borrow, we grieve, so my parents and their generation told us never to borrow.
“But while we weren’t borrowing, those who set the rules started borrowing.
“The biggest debtors in the world today come from the West. But with the loan, they created super economies, built huge train terminals, huge airports, schools and hospitals.
“And you know what’s going on, we’re going to use them and they charge us, so who pays?”
“I’ve heard people say they’re mortgaging people’s futures, as we have this meeting a new baby has arrived, if you don’t prepare for it you make that future bleak.
“When we were building the Lekki Bridge in Lagos, it was 29 billion naira, the child who was born in 2010 will be 11 this year.
“If his mother who was carrying her pregnancy had crossed that bridge at some point, he used that bridge before he was born and we had secured that asset for him before he arrived.
“If we wait until he is about 30 years old to build this bridge, we won’t be able to buy him at 29 billion naira.
“So if he helps pay for it, either because he started using it before he even arrived.
“So those who said don’t borrow changed their minds, they set parameters of debt to GDP and in those parameters you are playing very well.
“And those who are saying it now, where were they in 2005 or 2006 when the government paid $ 12 billion in cash to go buy a tent when the house is flooded, who does that?”
“They took $ 12 billion in cash to write off debts that had been closed.
“The roads were bad at the time, the rail was not built, the airports needed to be expanded, Lagos-Ibadan (highway) had to be built.
“But since the day after the cancellation of this debt, we started borrowing again, so this administration inherited all the debt.
“There is a sector of our economy called the financial services sector, if we all put money in a bank and no one borrows, that bank is going to close its doors.
“So if you have someone in a venture capitalist, a finance house, a mortgage bank, it’s because the government borrows that they can pay their wages.
“Borrowing is not a sin, it is part of the very essence of growing the economy and living economists who talk about public spending for example and who have never run a government should be careful about this. that they feed to the public, ”Fashola added.