The Minister of Power, Works, and Housing, Mr. Babatunde Fashola, has described Nigeria’s debt for infrastructure as a good debt.
Fashola, who spoke at the just concluded Africa Investment Forum in Sandton South Africa, said that the Federal Government should not be judged like a private company when it comes to borrowing.
He said: “The only thing I want to say about debt is that if it is debt for infrastructure, as far as I am concerned, it is good debt. I think we must see government different from companies, and the profit of a government and a nation is the prosperity of its people, not how much money it has in a bank.”
The minister recalled that as a governor in Africa’s largest city, Lagos, he had to take loans to set up six power plants in the state but tied the repayment of the debt to the state’s monthly allocation from the Federation Account.
He explained that by then he gave the investors the assurance that if he defaulted, they could take the money from the monthly income of the state.
Fashola said that people did not want you to raise taxes and would not want you to borrow, yet they want roads and bridges, adding that there is no other way out.
He clarified further: “On this side, I think my outlook is different; if you can’t find the money, just like I challenged people two days ago, they want roads, they want bridges and they don’t want to borrow and they don’t want you to raise taxes. So how do you deliver?
“I think the important thing is to raise debt, invest it in infrastructure because it will deliver prosperity, it will build efficiency in the nation, it would turn into growth and it would yield income over time,” he said.
Noting that the nation’s power problems have changed over the past three years, the minister explained that when he came in as a minister, the problem was how to generate power, adding that today, the problem is how to distribute power.
Fashola explained that providing electricity in Africa as a continent, the various governments’ plans must be different, adding that what works for Botswana will not work for a country like Nigeria, which is a federation with over 400 parliamentarians.