I Would Have Opposed Obasanjo’s Repayment Of Nigeria’s Debt If I Was Minister In 2005– Fashola

The Minister of Works and Housing, Mr. Babatunde Fashola on Thursday faulted the decision of the administration of former President Olusegun Obasanjo to repay the country’s external debt obligations in 2005.

Fashola said he would have opposed the decision if he was a member of the federal cabinet at that time because the repayment of the nation’s debt was not a priority for Nigeria when the decision was taken.

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He spoke at a townhall meeting organized by Business Hallmark on the theme, “Nigeria’s infrastructure revolution; Road to a new future.”

The event was attended by the Chairman, Business Hallmark Public Policy Forum, Chief Marc Wabara; a former Chairman of the All Progressives Congress, John Odigie-Oyegun; Secretary to the Government of the Federation Boss Mustapha and Water Resources Minister, Suleiman Adamu.

Nigeria’s total public debt stock had in recent times been on the increase as a result of the drop in revenue generation.

The debt stock increased from N28.628trn ($79.303bn) as of March 31, 2020 to N33.1trn by March 31, 2021, statistics released by the Debt Management has said.

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Obasanjo had in 1999 after his election initiated a relentless campaign for debt relief for the country. The crusade gathered momentum as he went ahead to appoint an economic team led by Dr Ngozi Okonjo-Iweala to oversee the reform process.

The implementation of the economic reform programme provided the anchor for government’s efforts to persuade the creditors to listen to Nigeria’s case for debt relief.

Nigeria’s vigorous campaign for debt pardon had paid off as some of its creditors under the Paris Club, which have rated the Federal Government’s economic reforms as far-reaching and focused, agreed to write off $18bn or 60 per cent of the $30bn Nigeria owed the cartel.

That was not all. The creditors had said that they would go further to raise the amount of the debt to be cancelled to $20bn or 67 per cent.

Following the Paris Club action, the deal was completed on April 21, 2006, when Nigeria made its final payment and its books were cleared of any Paris Club debt.

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This means Nigeria, under Obasanjo, paid the sum of $12bn out of the $30bn debt while the balance of $18bn was wiped off under a debt forgiveness arrangement.

But Fashola, a former Governor of Lagos said that with the country facing huge infrastructure deficit at the time the loan was repaid, Obasanjo’s administration should have requested the rescheduling of the debt with its creditors.

He argued that if the $12bn cash that was paid to the creditors at that time was channeled into investment in infrastructure, Nigeria’s economy will not be where it was when the administration of President Muhammadu Buhari commenced in 2015.

He said, “Our government in 2005 as a matter of policy decided to go and pay debt of $12bn cash but our house was in very dire need. That was a policy choice. I would have opposed that decision if I was in government because we needed to invest urgently at that time.

“If we had invested, the results of those investments would have earned us more revenues, much more income and will put us in a better position to service those debts. Fast forward to 2015, after paying $12bn, we are now owing $32bn.”

“We look for the resources, invest them in infrastructure and use the returns to pay back this loan.”

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The Minister also said that the Federal Government under Buhari has taken infrastructure to be a priority.

In demonstrating this, he said the government is currently implementing 896 road and bridges contracts covering over 13,000 kilometers in all the states of the federation.

In his comments, the SGF said when the administration of Buhari took over in May 2015, it was confronted with huge infrastructure challenges.

This, he stated was not good for a country that was in dire need of development and growth.

He said the Federal Government was committed to addressing this gap, which was why it revised the Nigerian Integrated Infrastructure Masterplan.

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