Improvement in welfare is one of the major reason why organizations/individual choose to get loans, but when becomes too much, it damages the growth of the country’s economy, and further reduces the provision of essential services for the citizen.
Despite the fact that rapid rise of Nigeria debt profile is becoming alarming and worrisome, the Senate House of Assembly on Tuesday confirmed the approval of fresh $5.5 billion external loan from President Muhammadu Buhari, just days after the latter requested for the loan.
According to the senate, the reason why the loan was approved was to prosecute some pertinent plans as to the revision of the 2020 budget. This may not serve as a source of concern for most Nigerians now, but potentially it will affect the economy, because Nigeria still owe the sum of 33 Trillion Naira, before approving the most recent one. While one of the objective was to assist the state government in enhancing the economy, which has been intensely hit by the COVID-19 pandemic.
When it was previously weighed the senate confirmed that, this loan will not be too difficult to manage.
Now that the debt woes has been propunded, is still left to be seen what kind of impact this will have on the country’s Gross Domestic income. Despite all of this, the senate would still go on accept another loan.
I am personally disturbed by the financial funding of the country, truth be told we are not generating enough revenue in the country, while we have resources that can be used to achieve this.
One area that experts have urged the government to clampdown on, is the Agricultural sector. With the labour force, Availability of lands, we should capitalize on this advantages.
Crude oil gives us massive revenue, but how about money spent in refining them?. in 2017 Nigeria imported 22.5387 billion litres of petroleum. Then what are we talking about here?. Our reputation as one of the largest producers of Crude Oil has always been watered down by the inconsistency of the refinery in the country.
Borrowing Rate in Nigeria skyrockets to 15.04 percent back in February from the initial 14.97 percent in January of 2020. But in march it moved to 14.7, April’s debt ratio increased to 14.9. The last time we had a high ratio in lending rate was in November 2009, with 19.6.
Nigeria is expected to payback the loan within 3-5 years. How Nigeria will pay back this loan, is the major worry, especially with the financial struggles we are experiencing.