Nigerians hit out at Tinubu for comments on borrowing – The Sun Nigeria


By Merit Ibe and Chukwuma Umeorah

A The recent comment by All Progressive Party (APC) presidential candidate Bola Ahmed Tinubu justifying the federal government’s penchant for borrowing to fund consumption and other unproductive businesses has sparked controversy across the country, with many Nigerians expressing their dissatisfaction with the intentions behind his proposal.

Tinubu, who made the comment in a trending Youtube video online, attempted to compare Nigeria’s borrowing with that of the United States of America borrowing to fund productive businesses.

According to the APC presidential candidate, there is nothing wrong with a country borrowing to finance its government. In his own words, “If borrowing is a crime, all of America should be in jail.”

However, his comment drew backlash from Nigerians who questioned the federal government’s unbridled borrowing intentions which left the country with a debt profile of N42.84 trillion.

Lagos Chamber of Commerce and Industry (LCCI) SME Group Chairman, Daniel Dickson, hit back at the APC standard bearer comment pointing out that the governments of other countries do not borrow to finance their recurrent expenditures such as the payment of salaries, but rather to finance capital infrastructures which would contribute to the generation of income.

He said, “What year did America borrow to pay wages and for consumption?” Can Tinubu provide this information? To my knowledge, in modern times, even small countries do not. As a country, you should borrow for investment projects that can generate money to repay the loan. You borrow to improve your ability to generate money. Salaries do not improve the ability to generate money. If the government develops the infrastructure, it will improve the ability to generate revenue.

Salary is a recurring expense that must be provisioned. The question is if you continue to borrow to consume and pay wages, how long will you do so. It is very false. Dickson also commented on the non-functional state of factories in the country, pointing out that the government should have borrowed to reactivate these factories to be operational. He said: “Factories are not working and incomes are not improving. The main source of our income, which is oil, is declining. There is no verifiable evidence that America borrows for consumption and to pay wages. Maybe America did it 20 or 30 years ago, but not recently.

In the modern economy, no country does this. If they do, they will not be developed as they are now. Every country avoids borrowing money to meet recurrent expenses.

Also reacting to the Tinubu proposal, a development expert, Nathan Oviri, criticized the idea of ​​borrowing for consumption purposes. He said borrowing without viable plans to turn it into revenue generation would have a huge negative impact on the economy. He pleaded reduced governance costs and better use of borrowed funds.

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