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The Petroleum Products Retail Outlets Owners Association of Nigeria has criticised the Federal Government’s plan to secure a $500 million loan from the World Bank to support basic education.
On 26 September 2024, the World Bank approved $500m for HOPE-GOV and $570m for HOPE-PHC.
According to the Programme Information Document for the loan project, obtained by PUNCH on Friday, the loan is expected to receive formal approval by March 2025.
In a statement titled “Where Are the Savings from Subsidy Removal?”, issued by its National Publicity Secretary, Dr. Joseph Obele, PETROAN raised concerns about the government’s continued reliance on loans, especially given Nigeria’s rising debt levels.
According to the group, President Bola Tinubu had pledged to reduce the country’s dependency on borrowing for public expenditure and assured Nigerians that the removal of the fuel subsidy would result in substantial savings, allowing for better resource allocation towards critical sectors like education, healthcare, and job creation.
Obele observed that many Nigerians were alarmed by the government’s frequent requests for external loans amounting to billions of dollars. He stressed that while borrowing can be beneficial when used for productive purposes, it becomes harmful when directed towards mere consumption.
“In Nigeria, loans are often used to fund excessive spending, which harms the economy. Borrowing should ideally be focused on boosting production, creating jobs, and improving food security,” he stated.
He criticised the prevailing pattern of borrowing to cover salaries and service debt, noting that this leaves little room for investment and hampers future economic growth.
This approach, he warned, could trap the government in a cycle of borrowing simply to repay previous loans, stifling economic development and contributing to rising inflation.
Obele urged the Federal Government to prioritise cutting unnecessary expenditures and to reduce its reliance on frequent borrowing. He cautioned that the growing burden of external debt presents a significant risk of bankruptcy for the country in the coming years.
