President Muhammadu Buhari has requested the Senate’s approval of a fresh $800 million loan from the World Bank, sparking public outcry.
The World Bank facility, according to the government, is intended to provide assistance to the poorest of the poor after the removal of petrol subsidies scheduled to take effect two days after Buhari’s departure.
The payment for this loan, which was approved last year, will extend to 2051, and about $53 million will be spent on administration and committee overheads.
The remaining funds will be used to expand the National Social Safety Net Programme’s coverage. The Director-General of the Budget Office of the Federation, Dr. Ben Akabueze, has criticised the country’s ongoing accumulation of public debt, claiming that the nation’s lean revenue does not support the move.
In a letter dated May 2, 2023, addressed to Senate President Ahmad Lawan, Buhari stated that the Federal Executive Council (FEC) had approved the request to obtain the loan.
He said that the funds would be deposited directly into the bank accounts and mobile wallets of identified beneficiaries, and digital transfers would be made to guarantee the process’s credibility.
While the organised labour movement has yet to discuss the loan’s percentage used to provide mass transit buses for workers and other social interventions, some civil society organisations have questioned the government’s insistence on obtaining the loan.
Civil Society Legislative Advocacy Centre (CISLAC), through its Executive Director, Auwal Musa-Rafsanjani, has said that borrowing to fund post-fuel subsidy removal palliative is strange.
Budget Office boss, Dr. Ben Akabueze, noted that the size of the FG’s appropriation for 2023 created excitement, but the aggregate budget of all governments in the country amounts to about N30 trillion, which is less than 15 per cent in terms of the ratio to GDP.
On the African continent, the ratio of spending is about 20 per cent, while in South Africa, it is about 30 per cent, and in Morocco, it is about 40 per cent.
Akabueze lamented that “about 15 per cent is too small for our needs. That is why there is fierce competition for the limited resources. That can determine how much we can relatively borrow.”
In conclusion, President Buhari’s request for an $800 million loan to expand the National Social Safety Net Programme has sparked public outcry, with some civil society organisations querying the government’s insistence on obtaining the loan.
While Budget Office boss Dr. Ben Akabueze has criticised the ongoing accumulation of public debt, President Buhari maintains that the funds will be used to expand the National Social Safety Net Programme’s coverage and that the government will directly deposit the funds into the bank accounts and mobile wallets of identified beneficiaries to ensure the process’s credibility.