The Presidency has maintained that borrowing is not sinful when done responsibly and has justified its borrowing policy as an essential instrument for economic growth.
The Presidency made this clarification during a presidential media conference in Lagos, where senior presidential advisers briefed reporters on the administration’s financial results and prospects.
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President Bola Tinubu submitted a request for clearance of N34.15 trillion in extra domestic and foreign loans to the National Assembly last week.
In response to enquiries concerning Nigeria’s debt profile, Mr. Bayo Onanuga, Special Advisor to the President on Information and Strategy, stated: “Borrowing is not a sin.” Even developed countries that borrow more than their GDP include the United States of America (USA) and the United Kingdom (UK). The issue is not borrowing; it is what you do with the borrowed funds.”
“We are a poor country with a large population. We must stop deceiving ourselves, Nigeria’s budget is smaller than that of South Africa. We have to be realistic about what we can fund without borrowing,” he added.
He clarified that, despite inheriting economic limitations, the Bola Tinubu-led administration had achieved noticeable progress in inclusive projects and macroeconomic reforms.
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Speaking about the administration’s economic progress in spite of early setbacks, Onanuga stated, “We acknowledge that the first year of this administration was turbulent. We faced serious challenges, including inflation, forex instability, and legacy issues that were beyond our immediate control.
“Today, Nigeria’s macroeconomic indicators have improved significantly. This has not gone unnoticed; global institutions like the World Bank and International Monetary Fund, IMF, have commended our efforts and direction.
“The country’s foreign reserves currently stand at $21 billion, up significantly from previous lows. Nigeria’s debt servicing has dropped from 97 percent of government revenue to under 60 percent, freeing up fiscal space for investment in social services.”
“Also, the President approved a six-month waiver on rice importation. That move was deliberate to crash food prices and break the cycle of hoarding and artificial scarcity.
“We need to be honest with ourselves. Nigeria is not as rich as many people think. We are a large country with limited resources and an exploding population. The truth is, we must recalibrate our expectations and begin to manage our ambitions more realistically,” he added.
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While speaking, the Special Adviser to the President on Public Communication, Mr Sunday Dare, said: “We can’t build highways from Lagos to Calabar or Sokoto to Bida without borrowing. Projects like these wake up entire regions economically. The real problem is not debt; it is waste. With proper utilization, borrowing is a tool for national transformation.”
