Opinion
President Tinubu’s $400m Palliative Loan
Tinubu’s plan to borrow additional $400m, despite the huge savings that government makes from the windfall on the removal of petrol subsidy definitely does not make sense, especially with government’s plea to Nigerians to tighten their belts, while lawmakers are buying expensive SUVs.
With the refineries still in a comatose state, there is no stopping the rise in imported fuel price. Borrowing to finance president Tinubu’s ‘Conditional Cash Transfer’ programme will further impoverish Nigerians because this programme is not an investment but a ‘greek gift package’ to compromise majority of ‘multidimensionally poor Nigerians’ to buy-in into president Tinubu’s removal of fuel subsidy that has further increased the number of multidimesionally poor Nigerians.
There is no justification for this borrowing but for greed and selfishness to finance the luxury life style of bloated cabinet members and elected national assembly members.
Historically, Tinubu’s cabinet is the largest, especially against the backdrop of dwindling Forex revenue accruing to government from exported oil receipts. With a bloated large cabinet and a retinue of additional Special Assistants as aides appointed by ministers, Tinubu has to urgently address the cost of governance, rather than expanding ministries to give room for more ministers and aides.
Borrowing a fresh sum of $400 million from the World Bank at this period definitely does not make economic sense. This borrowing may finance the consumption capacity of multidimensionally poor Nigerians, it is not an investment scheme that will bring returns on any investment. If anything, it will further make inflation to soar.
Like former president Buhari’s failed ‘Tradermonie’ programme of 2019, Tinubu’s ‘Renewed Hope Conditional Cash Transfer’ programme will not make any difference on the lives of multidimensionally poor Nigerians, rather, it will further increase the debt profile of Nigeria and is doomed to fail.
As for the World Bank, on one hand, it celebrated Tinubu’s removal of fuel subsidy and is now pushing palliative loan packages to government to ameliorate the sufferings of Nigerians; on the other hand, the World Bank is not giving this loan at zero interest rate, rather it gave the loan purely from a business perspective, not as Santa Claus.
Unless the refineries are fixed ASAP, and deliberate, robust attempts are made to increase Nigeria’s productive and export capacities to earn Forex, the Naira will continue its free fall, that is presently at N1,100/$1 to further compound the official and parallel market rates!
Finally, president Tinubu must reduce waste, plug loopholes, reduce his bloated cabinet and reduce the cost of running government. This is the way to go.