The Federal Government has been urged to channel the expected $4.4bn loan from the World Bank and the Africa Development Bank to production.
Economic analysts, in separate chats with pressmen, stated that channelling the loan to productive sectors would help stimulate economic growth in the country.
Welcoming the $4.4bn loan as positive to the economy, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf said, “If the loans are spent in a way that would improve the capacity of the affected sectors (of the economy) to produce more, that will be very positive for the economy.
“We need to scale up productivity in agriculture. For instance, we need to increase output. Food inflation is one of our biggest problems today. Effective, optimal and impactful spending in agriculture through this loan will be helpful,” he remarked..
He added that the components of the loan that would come in foreign exchange as cash would help to boost Nigeria’s supply side of the foreign exchange, with the supply boost happening when the monies come and the government spends not in dollars but in naira, it would help to support the foreign exchange cash flow.
Also, a Professor of Economics at Babcock University, Olusegun Ajibola, affirmed that though mixed feelings have always existed about Nigeria’s borrowing, the $4.4bn loans would benefit Nigerians when they are tied to specific sectors that could be monitored, like agriculture.
Ajibola urged the government to put the loans to maximum use by carrying out regular audits of what the loans are used for, noting that only a minimum percentage of the loans should be directed to consumption needs, such as payment salaries or giving palliatives, food and medicals.
But the Director-General of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, Olusola Obadimu, has a contrary opinion about the loans, stating that the government often exceeds its budget in relation to its earnings.
Obadimu believed such borrowings only aid in weakening the naira and it is a potent signal of lack of discipline as the government was not budgeting within its means.
According to him, “This is one of the factors that contribute to weakening the currency. Productively, we are doing less than we used to. Our exports are declining, even the crude oil and we are earning lower than we should.”
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