Senator Jimoh Ibrahim has defended President Bola Tinubu’s new loan proposal of $2.2 billion, calling it a necessary and insignificant amount in comparison to the country’s population.
Speaking on Channels TV on Tuesday, the senator, representing Ondo South Senatorial District, stated that borrowing such an amount for Nigeria’s 250 million people is not problematic.
He labeled the proposed $2.2 billion as “too insignificant” and “just lunch money,” adding that, “$2 billion to 250 million people to finance a deficit budget of a year that will end in less than 60 days. Good effort from the government; if Nigeria will understand. We need to encourage the government to do more.”
Senator Ibrahim explained that deficit budgeting contributes to economic development and argued that if the loan passes through legislative committees, there will be little opposition.
He clarified that borrowing is essential for development, citing the example of borrowing funds to support the Ajaokuta Steel Company. “Do you borrow to put in your bedroom? You are borrowing for development,” he emphasized. He further argued that if Nigeria can manage its own steel production, it would generate jobs, taxes, and contribute to economic growth through increased VAT.
On Nigeria’s debt servicing, Ibrahim suggested that the country’s rate is reasonable compared to global market conditions. He noted that the government must be allowed to open up the economy and pursue such loans, stating that taking loans with high-interest rates, such as 30%, would not be beneficial for business. “Who can do business at 30% interest rate?” he asked. He also pointed out that the U.S. debt is approximately $45 trillion, yet it owes no one because it can print dollars, which are the global currency.
Ibrahim contrasted Nigeria’s debt situation with the past, stating that Nigeria has made progress under the current administration. He claimed that the impact of Boko Haram is no longer as evident as it was during the previous administration, specifically under President Goodluck Jonathan, who left the country with $18 billion in reserves, but President Muhammadu Buhari left it in a deficit.
According to Ibrahim, Tinubu’s government will not mismanage funds. “One thing about Tinubu is that he will not steal Nigeria’s money, steal for what, he was comfortable before he came in,” he said.
The issue of Nigeria’s loan acquisition has raised concerns, especially after recent reports revealed that in the last eight months, Nigeria spent N7.4 trillion on debt servicing, exceeding the N3.6 trillion allocated for capital expenditure.
