A Professor of Financial Economics, Prof. Ndubisi Nwokoma has warned President Muhammadu Buhari led government against external borrowing.
Nwokoma, Director, Centre for Economic Policy Analysis and Research, University of Lagos, gave the warning in reaction to plans by the government to approach China for a $17 billion loan.
“Borrowing would be relatively harmless if it is tied to projects and are efficiently managed.
“Nigeria’s borrowing history is not salutary and debt service payments, even now, have been putting significant pressure on revenue.
“Nigeria is in a debt trap and should be cautious in procuring more debts,’’ Nwokoma said.
The expert added that when debt service payments are growing at a faster rate than revenue and more borrowing are made, such could end in debt trap.
Minister of Finance, Zainab Ahmed, recently explained to the Senate Committee on Local and Foreign Loans why the Nigerian government approached China-Exim Bank for the loan.
She said the fund would be used for infrastructure development heathcare and education projects.
AFRICA DAILY NEWS, NEW YORK