Borrowing: Economist urges FG to pause, publish project details

*Says no economy develops by ignoring manufacturing By Juliet Umeh Economist, Prof. Akan Ekpo, has urged the Federal Government to pause its proposed external borrowing and disclose the projects the funds will finance, alongside the studies supporting them. Ekpo said borrowing could support economic growth if used for viable capital projects, but warned that poor transparency and weak legislative oversight could leave future generations to repay loans without seeing the promised benefits.

He spoke on Arise Television’s The Morning Show while discussing the Federal Government’s borrowing plan, which President Bola Tinubu has defended as a means of financing infrastructure, boosting growth and creating jobs. He said: “There is nothing really wrong in borrowing, provided you have done your analysis well and you are borrowing to finance capital projects.

The project must have gone through a cost-benefit analysis or feasibility studies before you borrow.” He said Nigerians needed clearer information on what the loans would fund and how their impact would be measured. “The main focus should be: what are we using the borrowed money for?” he asked. “When you say roads and so on, it is very opaque. If you are borrowing to fix power supply, we should be able to see results.

That is not rocket science.” Ekpo said the same standard should apply to borrowing for security, health and education, adding that funds for social sectors should support capital projects and produce visible outcomes. “We need to see the outcome within two, three or four years,” he said. The economist also called for more thorough oversight by the National Assembly, saying lawmakers should scrutinise borrowing requests and the documents supporting them.

“If it is true that the request for borrowing came without proper documentation, that is sad. The parliament should carry out serious oversight.” He said borrowing decisions should account for their effect on future generations and the country’s ability to repay. “What we are borrowing today, our children and grandchildren will pay for. When they come and they don’t see any infrastructure on ground, it is very serious.” Ekpo said government should identify the sources and terms of external loans, including whether they were from multilateral institutions, bilateral lenders or the bond market.

“Don’t borrow into a pool and use the money the way you want. Be transparent, be accountable, and let the people know what you are borrowing for,” he said. He also cautioned that borrowing in foreign currency could expose Nigeria to repayment pressures, particularly when government revenue depended heavily on volatile oil earnings. “The debt-to-revenue ratio, to me, is much more important than the debt-to-GDP ratio.

You can’t depend on a revenue source you have no control over to finance development,” he said. Ekpo said Nigeria needed to strengthen its productive base, particularly manufacturing, to reduce its dependence on borrowing and oil exports. He said manufacturing had contributed less than 12 percent to the country’s Gross Domestic Product over the past six decades, while manufactured goods accounted for about two per cent of exports.

He said: “No economy develops and ignores manufacturing. If government directs its policies and creates incentives for that sub-sector, we will manufacture and export non-oil goods and services, earn foreign exchange and become more productive.” He said a $1 trillion economy target would be difficult to achieve without a stronger manufacturing sector, support for small businesses and more effective implementation of government policies.

“Without being productive, we cannot go anywhere. The economy, in my view, is still at a crossroads,” Expo added.