Nick Agule
8 min readJul 6, 2021


Nick Agule

Twitter: @NickAgule



Over a week ago, Nigeria’s Senate President Ahmed Lawan granted an interview to State House Journalists in which he said Nigeria has no choice than to borrow to finance infrastructural development. This week we will x-ray the Senate President’s statement and offer alternative views that Nigeria has other options aside from borrowing and that borrowing is hurting the nation more than doing her any good.

Senate President: Our options are really very limited as a country. We don’t have the necessary revenues. Nigeria is poor. We shouldn’t deceive ourselves, Nigeria is not rich, our resources are so low, our revenues are so low. Therefore, the option of not doing anything, just to sit because we do not have money, we should not go for infrastructural development is not even an option worthy of consideration.

Commentary: The Senate President is indeed right that Nigeria is poor. The State of California in the United States with a population of 40 million people has a total budget for 2021 of $197 billion. Nigeria with a population of 200 million people has the FG budget for 2021 at $35 billion! A single state in the US has a budget that is almost 6 times more than the budget of Africa’s most populous country is a testament to Nigeria’s poverty! California’s 2021 budget for health and human services stands at $54 billion while Nigeria’s is less than $ 1 billion! Total education budget for California in 2021 is $85 billion ($64 billion for junior and $21 billion for higher) whereas Nigeria’s is less than $1 billion. It can be argued that California is spending in dollars, but Nigeria’s case is not different because we are having to import petrol in dollars buying from the same market as California, same for importation of vehicles, armaments, food, medical equipment, computers, construction equipment, travel etc which are all paid for in dollars in the same markets as California buys! So Nigeria is like a father with 10 children living on N10,000 per month in the city of Abuja, no matter the good intentions of this father, even if he is zero corrupt, this father simply does not have the money to lift his family out of poverty no matter how hard he tries! This is unfortunately the sad story of Nigeria!

But the Senate President is totally wrong to say that Nigeria’s resources are so low! While California is richer than Nigeria in budget size, when it comes to resources Nigeria is far more endowed than California. The reason Nigeria is poorer than California is because Nigeria has been unable to unlock the value embedded in her resource rich nation. Nigeria is endowed with huge resources above the ground in the excellent weather (summer all year-round which California can only envy), abundant sunshine and reasonable wind which combine to make agriculture thrive. On the ground Nigeria is richly endowed with fertile soil that will support agriculture everywhere in the country (something California lacks as a huge part of the landmass is desert territory uninhabitable and uncultivable) and freshwater rivers traversing the nation. Nigeria is also abundantly resourced underneath the earth with almost all the mineral and metal resources in the world! Nigeria is therefore undoubtedly resource rich but cash poor!

Senate President: You cannot tax Nigerians further to raise money for infrastructural development.

Commentary: California generates 97% of their budgetary revenues from taxes. Nigeria is generating a meagre 28%! And this is basically down to the small economy exacerbated by poor tax collection because a huge number of citizens (corporate and human) are not yet captured in the tax nets. Those paying taxes in Nigeria are the low-income earners — market women, okada riders, roadside artisans etc — who are raided daily by all sorts of tax collectors. Also, workers who are captured on PAYE are paying a fair share of taxes. But the bourgeoisies in Nigeria are not being raided to pay their fair share of taxes. The Nigerian Government does not even levy import duties on private jets bought by the billionaires whereas vehicles used by the masses are heavily taxed!

Senate President: The other option is Public Private Partnership (PPP), but you need to create the enabling environment to attract investors to come into your country, because of the security challenges we face today, not many investors would like to come into Nigeria, even those inside Nigeria, may not like to invest properly in infrastructural development.

Commentary: The Senate President as the Head of an Arm of Government is an internal force in the Government of the Federation to create the enabling environment, but he chose to lament about the situation instead of speaking about the steps he as the leader of the national assembly is taking to provide the enabling environment. The Senate President presides over the appropriation of humongous funds to the armed forces and other security agencies, yet the security situation is deteriorating instead of improving but no commander or head of a security agency has been made an example of by the Government for not living up to their duties! When the National Security Adviser (NSA) raised the alarm that $ 1 billion of defence budget for arms procurement went missing and cannot be accounted for, the Senate President did not bark talk less of biting! The Senate President has unfortunately turned himself into a wailer!

Senate President: The only option left is for us to borrow responsibly, utilise prudently and economically and ensure that the projects are self-sustaining, that they can pay back the loans, that Nigeria’s economy will benefit from the implementation of such infrastructural development, so that’s the only option we have.

Commentary: The Senate President is fallacious on two counts:

1. Borrowing is certainly not Nigeria’s only option. The case of the telecoms sector is a great example of how government can cause the building of infrastructure without borrowing a single dollar! The telecoms companies have invested over $70 billion to build the infrastructure all over Nigeria including in the remotest villages because the government gave way by fully privatising the sector. The Senate President should show leadership by embarking on a surgical review of the constitution of Nigeria and release majority of the 68 items on the exclusive list which the FG is kneeling on so that the private sector can take them over and invest to build the infrastructure.

2. Nigeria cannot pay back the loans the country has taken. In 2020 the FG earned N3.9 trillion in revenues and paid N3.27 trillion in Debt service. This meant FG paid 84% of total earnings in 2020 to debtors. The FG then borrowed N6.18 trillion to fund the budget! The picture in 2021 did not change as the FG projects to earn N7.99 trillion in revenues while debt service is projected at N3.32 trillion which is over 40% of total revenues. Again, the FG projects to borrow over N6 trillion in 2021 to fund the budget! It is clear from these numbers that the FG’s borrowing is running out of control and the Senate President needed to consider the nation’s ability to service debts before making the statement that continued borrowing remains the only option for Nigeria! In fact, if the total debt owed to workers via unpaid salaries and to contractors is quantified, the FG debt profile will be even much worse than the numbers contained in the budget which are quoted here.

Senate President: Because we don’t refine our petroleum products in Nigeria, when we export, we generate revenue but because we import products at a higher value because of value addition, probably what we gained in the sale of crude will not be sufficient to pay for products.

Commentary: The Senate President is right! Nigeria has boxed herself into a quagmire such that instead of rejoicing at increases in the prices of crude oil, the main export commodity, the nation instead agonises because it means earned revenues from crude sales will be haemorrhaged to import petroleum products at even higher prices as correctly diagnosed by the Senate President. From the published financial statements of the national oil company the NNPC for 2018 & 2019, the corporation spent over N320 billion to refine zero barrels of crude oil and the Senate President presides and approves this expenditure! And because the refineries are refining zero barrels despite the huge expenditure, the Senate President again presides over approval of trillions of naira in payment for subsidies on petrol! It is time the Senate President exercises courage to force the NNPC to sell or lease the refineries to investors to refurbish and operate them at a profit to add value to the FG’s revenues. This will save the FG spending on refineries to refine zero products and stop the painful subsidy regime too!


1. The FG must suspend all further borrowings as the nation’s balance sheet can no longer carry any more debt! Nigeria will become bankrupt if the current appetite for debt is not tamed!

2. The Senate President must immediately begin the process of constitutional amendment to release majority of the 68 items on the exclusive list to the private sector to build the infrastructure to operate and offer services and bill consumers to generate return on their (investors’) investments. This will shore up government’s revenues through the taxes generated from these economic activities.

3. The Senate President to take immediate steps to pass the necessary legislation that will overhaul the tax administration system in Nigeria to enhance tax collection to improve tax revenue from the current 28% of total revenue in the 2021 budget to at least 75% in subsequent years. The Senate must quickly pass legislation to tax private jets and other luxury goods imported by the billionaires.

4. The Senate President to cause legislation to be enacted to limit the interest rate charged by banks on loans to the productive sector of the economy. The Senate can consider pegging the interest on loans based on a fixed basis points system over the interest on savings. So, if a bank is paying 2% interest on savings such a bank cannot charge more than 7% on loans. This will make credit readily and cheaply available to the economy to boost productive activities. No economy grows with loan interest rates at over 20% as currently obtainable in Nigeria!

5. No economy can thrive and prosper without adequate electricity supply. Nigeria’s economy by global standards needs 200GW of electricity but currently being supplied with 4GW. There is no way the economy can grow with this abysmal level of power supply! The Senate President need to provide leadership for the national assembly to pass the necessary legislation to privatise 100% the power sector — generation, transmission & distribution — to energise the economy. The national assembly is also required to revisit the privatisation of the DISCOs as they lack the financial muscle to develop the distribution network which has necessitated the FG to spend heavily in provision of subsidies to the DISCOs. No subsidies are being paid to the telecoms operators because the privatisation was done right with licences issued to companies that had a pedigree and regional scale in the sector unlike the DISCOs who don’t have such leverage.


If you don’t look for money you will be poor! It does not matter if you are a father or mother with a family to care for or you are a chief executive of a company or you are a President of a country! You must look for money before you earn it to become rich because money does not fall from the skies! Nigeria needs to take urgent steps to look for money by unbundling and debottlenecking the structural imbalances to free the economy for private sector participation and investment. The Government does not have the financial muscle to build Nigeria. And the Government must not borrow further to build the infrastructure. The Government only needs to give way as it was done in telecoms sector and investors will build the infrastructure with their own money! Only few investors will ignore a market of over 200 million people with over 70% as young people!