From Uche Usim, Abuja
Former Commissioner of Finance, Imo State, Prof Uche Uwaleke, has advised the federal government to ensure that the anticipated $1.5 billion concessionary, budget-support loan is channeled into capital expenditure and not recurrent.
Uwaleke in a chat with Daily Sun on Sunday said since the loan is a long term facility with very low interest rate and a period of moratorium should be applied to a self-liquidating project.
“I emphasize applying the loan to the capital expenditure component of the budget and not recurrent.
“But if it has come with a lot of conditions especially to do with the implementation of IMF/World Bank recommendations in relation to ongoing reforms in Nigeria or it is going to be used for cash transfers or applied to non-capital projects, then it only ends up compounding our economic woes”, he explained.
The Minister of Finance, Budget and National Planning, Mr Wale Edun at the weekend, said that the World Bank will soon release the $1.5 billion concessionary loan to support budget funding.
He made the disclosure at a press briefing on the sidelines of the annual meetings of the World Bank and International Monetary Fund (IMF) currently holding in Morocco.
In 2020, the global lender approved the facility for Nigeria to bridge the budget funding gap created by the COVID-19 pandemic.
Edun said he would run the loan matter through the Federal Executive Council on Monday (today), to secure their approval.
He added that the facility comes with a near-zero interest rate, which provides a soothing relief over mounting sovereign debt and debt servicing.