... to resolve differences on excess crude litigation
Amidst critisms from economic experts and members of the public against the government's knack for taking loans from international institutions, the federal and state governments on Tuesday justified their preference for borrowing from such international institutions, saying such loans are good to grow the economy as they attract zero percent interest.
According to the of Anamabra state, Peter Obi who briefed State House correspondents after the National Economic Council (NEC) meeting presided over by Vice President Namadi Sambo at the Council Chamber, Nigerians should rather encourage borrowing for production.
The NEC comprises of the 36 state governors, the Ministers of Finance, National Planning, Attorney General of the Federation and the Central Bank Governor.
He argued that Nigerians were not against borrowing provided the funds offered will be used for production purposes that will generate jobs saying "there is nothing wrong in borrowing if you are going to borrow for production and not for consumption.
If you borrow for production, you will be able to help the economy and create jobs. So, we should encourage borrowing for production. What people are complaining is that it should not be used for consumption".
While corroborating the Governor, the Minister of State for Finance, Alhaji Yerima Ngama, who also attended the NEC, justified the preference for borrowing noting that the country's debts profile is not critical and below the international threshold of 40 percent of the GDP.
According to him, the country's debt is 17 percent of the GDP, adding that the loans are offered at virtually at zero percent interest.
His words: "actually, Nigeria indebtedness is not a problem. Currently, both domestic and foreign debts put together constitute only 17% of our GDP.
"If you look at the statistics in most countries are either above 30 and even in Europe 60 or 70 percent. Internationally, the threshold is 40 percent.
So, any country that has less than 40 percent debt to GDP ratio, the country is not facing any critical debt problem. If you look at our total debt, only about $5billion is foreign debts and these are 100 percent concessional.
IS NAIJA NOT IN TROUBLE?
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