$12bn cash payment to service foreign debt in 2005 was a wrong move –Fashola

Nigeria’s Works and Housing Minister,  Babatunde Fashola, has criticized the decision of 2005 Olusegun Obasanjo led government to pay $12 billion in cash to Nigeria’s creditors, out of the $30 billion sovereign debt in 2005.According to Fashola as at the time tackling infrastructure was the more smarter move and he would have vehemently opposed the action if he was a member of the Federal Executive Council then. He argued that such a huge chunk of cash was better channeled into strategic investment in infrastructure, which would have been used to repay the debt later on.Fashola, who spoke at a town hall meeting organised by Business Hallmark themed; “Nigeria’s infrastructure revolution; Road to a New Future”, maintained that tackling infrastructure decay was a higher priority than the repayment of the nation’s debt when the decision was taken.“Our government in 2005 as a matter of policy decided to go and pay debt of $12 billion cash but our house was in very dire need. That was a policy choice. I would have opposed that decision if I was in government because we needed to invest urgently at that time.” Fashola, said at a town hall meeting organized by Business Hallmark themed; “Nigeria’s infrastructure revolution; Road to a New Future”“If we had invested, the results of those investments would have earned us more revenues, much more income and would put us in a better position to service those debts. Fast forward to 2015, after paying $12 billion, we are now owing $32 billion.“We look for the resources, invest them in infrastructure and use the returns to pay back this loan.”The Minister, however, said that the Buhari administration has taken infrastructure to be a priority and that the government was currently implementing 896 road and bridges contracts covering over 13,000km in all the states of the federation. The post $12bn cash paymentto service foreign debt in 2005 was a wrong move Fashola appeared first on Linda Ikeji Blog.
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