Nigeria Content Online

Irked by Nigeria’s rising debt profile,
President Goodluck Jonathan has directed the National Economic
Management Team to draw up a new guideline for external borrowing, the
Minister of State for Information and Communications, Labaran Maku,
said yesterday while briefing pressmen after the weekly Federal
Executive Council.

Mr. Maku said the decision was reached
to ensure that Nigeria borrows for projects that will have a direct and
immediate impact on the country’s economy.

The minister also said the president,
“frowns at a situation where, after exiting the London and Paris club
of creditors, Nigeria should again return to the situation of the past.
Therefore, external borrowing must be tied to productive activities
that generate revenue, improve economic development, increase Gross
Domestic Product (GDP) and increase employment in the country”.

He said the president also directed a
thorough analysis of every loan that Nigeria intends to take
subsequently, whether by the federal or individual state governments,
to ensure that the loans must have impact on the economy.

From “today onwards, the question of
new debts or new external loans will be tied to the new guidelines to
be developed by the National Economic Management Team” Mr Maku said.

“The President was very emphatic about
this development because the Nigerian economy is in need of productive
activities. A situation where loans might be taken that are not
directed at development or increasing infrastructure or increasing the
general volume of goods and services in the economy will not be in the
best interest of Nigeria”.

New shares in AfDB

The minister also said the executive
gave approval to the Ministry of Finance to pay up Nigeria’s new share
capita allocated by the African Development Bank (ADB).

“Council equally approved the payment
of N6.5 billion (USD43.341 million) per annum for 8 years, starting
from 2010 with the N1.7billion provided in the 2010 budget in addition
to the issuance of promissory note for the balance of N4.8billion,” he
said.

“The ADB had offered Nigeria 386,021
unit of shares from its Sixth General Capital Increase out of which
23,215 constitutes the paid up portion. The value of the paid up
portion of 23,215 is USD346.730million which is about N52.01billion.”

In 2006, Nigeria paid off its multi- billion dollar Paris Club debt.
The move, which was said to have cleared the way for greater government
spending on infrastructure, healthcare and education, is now gradually
being threatened by a new debt profile.