 The People's Democratic Party, PDP, criticized President Mohammed al-Bukhari and the All-Pegas of Congress for allegedly short-changing the future of Nigerian children. The PDP expressed these regrets on Children's Day, saying that the last six years have been a reminder of the harsh conditions the Bukhari regime has submitted to children to. He added that the Bukhari-led APC administration has continued to mortgage the future of Nigerian children with corruption and reckless foreign borrowings, which is putting a huge yoke on the people's shoulders of Nigerian children. Well, joining me to discuss this is Gospela Bili, he's an economist, and Agil Kingsley, he is a programs associate of connected development. Thank you very much, gentlemen, for joining us. Thank you very much. Great. Thank you for having me. All right. I'm going to start with you, Gospela. Under the Bukhari administration, the PDP is saying that government has mortgage the future of children, and this is because of the humongous debts and borrowings that have been taking place. He even made reference to corruption, reckless foreign borrowing, which I said at the beginning puts a serious yoke on the children. But borrowing is nothing new between you and I. Across the world, countries keep borrowing every now and again, but why is the borrowing under this government, especially under the Bukhari administration, such a problem? You need to unmute yourself, please. Good. Good. Go ahead. It tries to be important to note that it's a political economy issue, not just a core administration issue. And as much as, yes, there's some truth in that, the fact that the Bukhari administration has largely mismanaged the economy in the sense, but it doesn't necessarily mean that it's a standalone act of that administration. It's a conversion that speaks loudly to the nature of the political economy we have right now. And also to state that the idea of deficit financing is a normal idea in the world of development economy. So it means nations will need to source for more funding to meet their budget, their capital expenditure, and the developmental expenditure. But the reason why it's a source of concern for the Nigerian economy is that, first of all, you have issues around government waste. Secondly, you have the issues around structure and how development financing is being deployed. All right? Policies, programs, and all of those things are not strategically designed, all right, to enable or to empower the average Nigerian move into shared prosperity, all right? So you don't have that, and yet you are trying to fund, all right? It's like trying to fetch us out with a basket, all right? How do you fund something you don't understand or something that's largely misaligned? So there's the funding issue, there's also a policy, all right, issue. There's also the idea around how productive enough is the economy to be able to pay back its debt, all right, in the subsequent years. We remember that sometime in 2004, Konji Wela led the dedication, and we got 60 percent of our debt cleared off. Now we are back to the point where we are even in a more precarious situation compared to where we were in 2004, all right? So we don't have a productive economy to be able to take care of this debt. Neither are development financing strategies tailored, all right, to capital expenditure or to the right infrastructural framework that would deliver a productive economy, all right, for us to be able to repay this debt. Also to say again that every year, all right, we find a situation where that we are in the quota of public expenditure that goes into debt servicing is gradually rising, you know, closely ahead of capital expenditure. That is a critical chunk outside of current expenditure goes into debt servicing. So you have a heavy recurrent expenditure, you have heavy debt servicing and low capital expenditure. We don't know if we meet, all right, its implementation potential on a yearly basis. So it's a, it's a, it seems like an intentional approach, all right, to put that, to put the national economy in a cage of severe economic and financial crisis in the subsequent years. So it's a very, very bad situation that we are in technically. Great. Let me, let me go to Kingsley. Recently the House of Representatives had enabled Mr. President to borrow another 1.5 billion dollars. Mr. President also was able to borrow, I think that's also 995 million pounds. And our debt has risen to 20.8 trillion naira under this precedent. But for arrested development, I know that you work with all of the money and so you trace and track how these monies are being used or if they are being put to use. So far in all your research, what are the implications of all of these borrowings? Are they being used? Are they being used for what they said they want to use them for? And do you see like just that, like the economist has said, is it going to be serviceable and payable anytime soon? Okay. Thank you very much for having me on this program. So first, let's start by placing the issues side by side. Let's look at some of the projects that have been founded by Lone. So let's talk about the Karuna Bujarri, for example. That project was delivered by financing, being financed using the, currently as loans and then how many is right now that project has been running? And then in what you have is that project or that really has been shown and really is being subsidized and refused in that program. So how then do you want that loan to be repaid from the transfer of it? So just like we mentioned earlier on, it's very obvious that the ventures, a whole lot of the ventures with these loans are being used for cannot recover the loan. So I'm going to give you on that instance, we see we collect loans to construct roads, to construct major roads, and the thing I ask is how do these, how does this translate into a repaid by this loan as soon as possible? Yes, I know it's going to improve economic activities around us, we learn and we rest. But then you consult the major road and then the key value, for example, is from the farms to the major road, but so you still, you're still left with the same problem of not having these groups that are produced in the farm, getting across to, to, to roads that should get across to the end users that will pay money for this produce. So we're still left with the same problems. Do you think that these, do you think that some of these projects that are being funded by the government, and I mean any government, whether it's the good luck government or the Bahá'í administration, do they seem more political to you just so that they could feel a scorecard of sorts, or are they more people oriented from your research? So, so far, from what we've talked so far, you would want to always see that on the field, there are, you, in some instances, you have projects being completed at the same time, and then in some other instances, you have issues of not keep starting and depending on you, due to one policy of phones and the rest. And mind you, mind you, if you look at the loans that have been collected over time, they have been used to finance most of them have been to finance roads, construction. Yes, they have been to finance road construction. But then the one for me is this. For example, the 2021 budget that is going to come with the deficit of over five trillion more, and then you haven't the projected revenue for the year, projected revenue just to be above seven trillion naira. So what it means is that you have to use five trillion naira, for example, the service that the debt we have, and then you're left to just two trillion naira to be shared across different projects and activities across different species. Now, let me define what the IMF define sustainable debt as. According to the IMF, sustainable debt can be defined as an external debt that a country collects and can easily pay back and service without the cost of debt released or reshared in why allowing an acceptable level of economic growth. So the question we ask ourselves right now, with the current debt we have, can we sustainably carry out other economic growth while servicing the beds in the country? And the big question is no, because if you generate seven trillion naira and you're servicing the five trillion naira, then most are you left to wait. Let me bounce back to Gospel. Gospel, the DMO, that's the Debt Management Office, has said that COVID-19 is one of the reasons for excessive borrowing lately under this administration. And experts have also said that government needs to be careful in borrowing. In fact, they've literally cautioned against borrowing from the CBN. They have termed it as dangerous. Explain to the common man what this really means, because if the Debt Management Office is saying that it's COVID-19, that's one of the reasons why the excessive borrowings are going on. What exactly have we done with the money? Now, technically, and to be very, very practical here, all right, we've had a very long journey of fiscal and discipline. All right. And when we've seen that track record of fiscal and discipline, you know, it comes to a point where institutional players will begin to realize what the fruits of all the years of fiscal and discipline. So what happens, there's only inclines where we do not engage the rigor of doing things right, or at least doing it fairly right. All right. What happens is that people begin to try and sound political correct around situations. Now, COVID-19 only amplifies or made clearly to the world and to organizations of excess fees that already existed within their systems. All right. So even before COVID-19, we were already in a debt crisis. People need to understand this issue. Even before COVID-19, we're already in an economic crisis. Our economy was literally dragging, you know, from the 2016-2017 recession, we had not fully recovered. So I'm not surprised that the numbers are further worsening than it was prior to the pandemic. All right. So that is to put in context that the pandemic is not the major reason why, all right, we are lending some more. The major reason why we are lending some more right now is that the economy by the day is seriously being like the structural aspect of the energy economy is tearing apart. All right. And it can no longer hold anything meaningful together. We are seeing inflation rise and all that. And also then putting the context that COVID-19 led to the rise of stimulus, all right, and policies to popular programs globally. And nations like Nigeria, who are in the lower realm of the ladder, have benefited largely from that. So if you have to say that COVID-19 is the reason why we are worrying more, on the other hand, you also, you know, find a lot of stimulus packages rising from the private sector and all that. So it's not enough conversation or argument to say. Rather, what I would say is that COVID-19 further amplified or showed to us that the economy was already in a state of destruction, sort of, was already self-destructive in its design, per se. All right. So what we are dealing with now are structural issues. And because the government needs to find ways to fund itself out of that economic nightmare we find ourselves in, it resorts to other developing financing measures. And in this regard, it has chosen the debt pathway as the only way to go in the sense. So we can necessarily put that on COVID-19. I think we should put that more on the tracker of fiscal discipline. I will get to a point where the economics of the Nigerian economy is proving to be more complex. Reasons why the central bank is already trying to, all right, reasons why the central bank has to make the MPC decision around the whole decision, all right, because there are more complexities around the Nigerian economy. And these issues are becoming more structural by the day than policy-driven or a one-of-debt access to debt financing and all of that. So it's more severe than we think. In terms of the economic and financial crisis ahead. It sounds like an insurmountable problem. But finally, on that note, Kingsley, where does this leave us? And where do we go from here? Because, of course, you are one of the guys who are following the money literally. Where does this leave us as a country? Because, I mean, I was listening to the radio some days ago and the average Nigerian that was calling on the radio was saying, oh, before I could take 10,000 to the market to buy this and that, but now it's double the price. And the cost of living is obviously on the rise. And then it's like the inflation rate is also, you know, skyrocketing. What does the average Nigerian do? Stimulate economic activity. We're not going to stimulate Indians like this. But that's the only way we can quickly pay back the loans. So what this means is that you're borrowing money, injecting money in the system, without having an industrial revolution with which that money can be injected into and also generate other aspects like employment. And of course, who does that are also going to generate foreign exchange after the economy? So you're left with so much money in the system and then you're having inflation. So what inflation does is that this is the spending power of income that obviously have ordinary money. So what do you have in common? So you begin to see people being unable, for example, to take their income to assess better healthcare. Children already have over 10.3 million children out of the population. So if you have 10.3 million people COVID and non-COVID has come and it's, I'm really wondering what the amount of out of situation is after that, not just because of maybe that insecurity right now. So it's, I'm already scared for what the future holds for the country when you want to relate a little bit. Now, mind you, I'm not saying borrowing is bad. I need to make that clear. But what are you going to do? If you're not borrowing to stimulate industrial activities, I can repay back that loan. Okay. What we're doing is not getting the treatment. And I can tell you based on statistics, it's even going to get completed by this time because it is projected that by the year 2025, our external debt will be at 287.69 billion US dollar. Well, that's alarming, but on that note, I want to say thank you to you. Gospel Obele is an economist and Aguil Kingsley is of the arrested development. Thank you very much, gentlemen, for being part of the conversation. Thank you very much. Thank you for having me. Thank you all for staying with us and being part of the conversation. That's all we have for you tonight on Plus Politics. I am Mary Ann Ako. Have a good evening.