The immediate past Minister of State for Budget and National Planning, Clement Agba, on Wednesday, defended former President Muhammadu Buhari, saying there was nothing wrong with his reliance on external loans to fund infrastructural projects.
The last administration came under criticism over its dependence on external borrowing, a trend many critics believed contributed to the poor state of the Nigerian economy.
Agba, who is an economist, however, maintained that in place of criticism, Buhari deserves some commendation for judiciously using external loans to build good roads, and railway tracks and upgrade existing infrastructure in the country.
The minister, a governorship aspirant in Edo State on the platform of the All Progressives Congress, made the submission after submitting his Expression of Interest and Nomination forms at the party secretariat in Abuja on Wednesday.
Addressing journalists after his meeting with members of the APC National Working Committee, he said, “What are you borrowing for? If you are borrowing for consumption, you are not going to be able to pay back. This is because when you borrow, it implies that you are going to pay back. If you look at the borrowing from Buhari’s government, you also have to look at the source and the conditions for borrowing. They were not commercial loans.
“For commercial loans, you will pay maybe 20 or 30 per cent interest rate. These were very long-term loans with good conditions. And the highest of it, if I remember, was about 2.5 per cent. You also have a moratorium of between 5 to 20 years to pay back, depending on what it is.
“Some of those things you don’t know is that, if you don’t take that money to build rail or do that road project when you want to do it in five or 10 years, you will be paying more for it because of the value of money.
“Is it not better to take the money and pay at 2.5 per cent whereas the inflation rate is at 26.6 per cent? Is that not a dash? So, borrowing is not a sin. I think the former President should be commended.”