The House of Representatives has resolved to carry out a comprehensive audit of loans secured by the federal and state governments since the return to democratic government in 1999.
In the past 25 years, the country has enjoyed democratic governance under the leadership of five presidents, namely Olusegun Obasanjo, Umaru Yar’ Adua, Goodluck Jonathan, Muhammadu Buhari and the incumbent Bola Tinubu.
Within the period, billions of dollars were borrowed to fund developmental projects even as the governments of the respective 36 states of the Federation also incurred foreign and local debts.
The decision of the House to probe public loans followed the adoption of a motion on notice sponsored by the member representing Surulere II Federal Constituency, Lagos State, Mr Lanre Okunola, on the “Need to ensure proper public debt oversight on the Federal and State government loans and the proper utilisation of all borrowed funds.”
Citing data from the Debt Management Office of Nigeria, Okunola said, “Nigeria’s public debt profile, including external and domestic debt recently released, indicate that as of March 31, 2024, showed that public debt in the country has grown significantly over the years at N121.67tn ($91.46 bn) with loans sourced from domestic and international lenders by the Federal and State Governments to fund various projects and budget deficits.”
He quoted the same report as indicating that “The nation’s debt rose by N24.33tn in three months from N97.34tn ($108.23bn) in December 2023 to N121.67tn ($91.46bn),” noting that while borrowing is a vital means for financing development, unchecked debt accumulation poses enormous risks to Nigeria’s fiscal stability and future economic growth.
According to him, the 1999 Constitution, the Fiscal Responsibility Act (2007), and the Debt Management Office Establishment Act (2003) empower the National Assembly to approve all government loans and ensure proper utilisation.
He further argued that “Over 40 per cent 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.
Okunola said, “Many loans from state governments are drawn from commercial banks and certified by the Federal Ministry of Finance are contracted without full compliance with constitutional requirements for National Assembly approval. Additionally, there are instances where borrowed funds are not effectively utilised for their intended purposes, undermining the benefits of such loans to the citizens.”
Following members’ support for the motion, the House mandated its Committee on Aids, Loans and Debt Management to carry out a comprehensive audit and oversight of all loans obtained by the Federal and state governments since the inception of the current democratic dispensation and report back within a month for further legislative action.
