Former President of the Chartered Institute of Bankers of Nigeria, Prof. Segun Ajibola, said the projected $400 million loan might be diverted.
Recall that President Bola Ahmed Tinubu’s administration is planning on borrowing an additional $400 million for palliative over subsidy removal.
This is coming at a time when Nigeria’s lawmakers are planning to buy vehicles worth N160 million.
This may hype the federal government’s borrowing to about N4.1 trillion in four months.
The CIBN president who is also a Professor of Economics at Babcock University, said that Nigeria’s level of borrowing is already high as well as the attendant debt service burden, according to the Guardian.
Ajibola said that unless new borrowing would achieve the intended purpose of empowering the households and raising their productive capacity along with that of the economy, it wouldn’t make sense.
He stressed that if the funds are not used for what it was meant for, it would further add to the debts of the country.
He called for an organized disbursement scheme to be put in place.
He said, “It is a palpable fear that the proceeds may be diverted to consumption at the household level. That may turn out to be money down the drain, thereby compounding the debt burden. The antidote to a likely diversion is, therefore, an organised and controlled disbursement scheme that takes into recognition the defined empowerment project, household by household.”
“A herculean task though; but looking back (tradermonie of 2019), I hardly can think of a less cumbersome result-oriented disbursement template for the purpose of economically empowering Nigerian households,” he added.