The House of Representatives has resolved to conduct a thorough audit of loans secured by both federal and state governments since Nigeria’s return to democratic governance in 1999.
The PUNCH reported that this initiative comes at a time when the country has experienced 25 years of democracy, characterized by the leadership of five presidents; Olusegun Obasanjo, Umaru Yar’Adua, Goodluck Jonathan, Muhammadu Buhari, and the current president, Bola Tinubu.
Over these decades, Nigeria has accrued billions of dollars in debt, aimed at funding various developmental projects. Simultaneously, the 36 states of the federation have also taken on substantial foreign and local debts.
The move to investigate public loans was sparked by a motion introduced by Mr. Lanre Okunola, the representative for Surulere II Federal Constituency in Lagos State. He emphasized the “Need to ensure proper public debt oversight on the Federal and State government loans and the proper utilisation of all borrowed funds.”
His call for action reflects growing concerns about the management of public debt and the implications for Nigeria’s fiscal health.
In presenting the case for the audit, Okunola cited recent data from the Debt Management Office of Nigeria.
He noted that as of March 31, 2024, the nation’s public debt had surged to N121.67 trillion (approximately $91.46 billion), a stark increase attributed to loans acquired from both domestic and international sources for various projects and to cover budget deficits.
He revealed that Nigeria’s debt rose dramatically by N24.33 trillion in just three months, climbing from N97.34 trillion ($108.23 billion) in December 2023 to N121.67 trillion ($91.46 billion).
While acknowledging that borrowing can be a critical avenue for financing development, Okunola warned that unchecked debt accumulation presents serious risks to Nigeria’s fiscal stability and long-term economic growth.
He highlighted that under the 1999 Constitution, the Fiscal Responsibility Act (2007), and the Debt Management Office Establishment Act (2003), the National Assembly has the authority to approve government loans and ensure their proper usage.
Okunola pointed out that “Over 40 percent of developing countries, including Nigeria, spend more on debt services and repayments of loans, leading to inefficiencies in government finances at the expense of funding critical sectors of the economy such as education, healthcare, infrastructure, and social policy.”
He further criticized the process through which many state governments secure loans, noting that these are often drawn from commercial banks and sanctioned by the Federal Ministry of Finance without full adherence to constitutional requirements for National Assembly approval.
He raised concerns that there have been cases where borrowed funds have not been utilized for their intended purposes, ultimately diminishing the potential benefits of such loans to citizens.
With widespread support from fellow members, the House has instructed its Committee on Aids, Loans, and Debt Management to undertake a comprehensive audit and oversight of all loans acquired by both federal and state governments since the commencement of the current democratic era.
The committee has been given one month to complete its findings and report back for further legislative action.
This proactive approach underscores the House’s commitment to enhancing accountability and ensuring that borrowed funds are effectively utilized for the public good.
