By Ikhili Ebalu, Benin City
University of Benin (UNIBEN) Professor, Samson Edo has warned the federal government against binding agreements of foreign loans whose multiplier effects could push the nation’s economy into a dangerous territory.
Professor Edo gave this advice while delivering the 212th inaugural lecture series of the University in Benin City where he sued for a viable alternative to external sources of borrowing especially when there is oil price shocks in global market.
The University don who spoke on the topic: “The worrisome cycle of external borrowing in Nigeria: How can domestic Capital market provider remedy”, said, “50 percent of the nation’s debt was owed to International Development Association (IDA) and China EXIM Bank”.
In his foray into the era preceding external debt crises in Nigeria (1970-1980) and the current trends in the nation (1980-2005) in relation to the foreign debt forgiveness and difficulties in securing debt relief; Prof. Edo, challenged African leaders to build investors’ confidence in the Capital markets and make them viable to raise bonds for projects financing.
The Professor of Financial Economics, said Nigeria can obtain external loans to fund developmental projects, but, such loans can export austerity into the nation in future due to lack of financial discipline.
According to him, Nigeria foreign borrowing pattern was drifting towards the fault line of craving for foreign loans like South Africa and Egypt that allocated 31 per cent of her annual national budget in 2017 to servicing foreign loans.
He explained that South Africa is now the worse of due to the high level of unemployment, which blamed on “Xenophobic attacks” on some economic Migrants including Nigerians.
“South Africa is the leading debtor Country in Africa, borrowing enormous sums of money to sustain State-owned Enterprises (SOEs) The government of South Africa has borrowed so much since 2010, yet has not been able to achieve its objective of reducing unemployment which remains above 50 percent”.
He also said, Kenya which had been spike in debt interest payments, made a bold statement for rejecting foreign loans not to be caught up with further economic crises.
Earlier in a remark, the Vice Chancellor of the University of Benin, Prof. Faraday Orumwense, said Professor Samson Edo rose through the ranks before attaining the peak of his career in the institution.
He said the lecturer had been Capital analyst with the Nigerian Stock Exchange in Lagos before he joined the service of the University in 1996
Professor Samson Edo has over 60 publications in reputable journals and had produced a PhD student who is now a Professor.
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