Borrowing to develop infrastructure not a bad idea – Barau


Senator Jibrin Barau represents Kano North Senatorial District on the platform of the All Progressives Congress (APC). The chairman, Senate Committee on Appropriations, speaks with CHUKWU DAVID on the 2020 budget implementation, diversification of the economy, nation’s increasing borrowing and the purported ceding of the country’s sovereignty to China in a recent loan agreement



In view of the fact that the Senate is expected to receive and commence processing of the 2021 budget, what is your rating of the 2020 budget performance?


You know that the 2020 budget was signed some few weeks ago. And in the budgetary process, after the conclusion, that is after the budget is signed into law, what comes first is the procurement process by the various Ministries, Departments and Agencies (MDAs) of government, to now begin to actualize the provisions of the budget. The position we are in now is the position of the MDAs working round the clock to make sure that they conduct the procurement process. And as we speak, I don’t think anybody has finished. It is only after that has happened that we will begin to see the implementation process.



And I forgot one step, and that step is the release. After the passage and signing of the budget into law, there is release of funds to the MDAs, so that the budget will be implemented. So, the Ministry of Finance has just released money to all the ministries. And you know that the President gave a marching order that 50 per cent of allocation to each establishment should be released so that the budget can be implemented.


The information available to me is that releases are yet to the different ministries and agencies of government. And it’s only when the agencies are able to get part of the money for each project that we begin to initiate and move in full force in getting the procurement process done, so that the capital aspect of the project can be implemented. So, this is the stage we are now. It is only after that we begin to measure how much the budget is being implemented.



If not for the COVID-19 pandemic, the process would have begun since February or March. It’s unfortunate that we have come into the full era of this pandemic, when revenue is not coming in, and there was lockdown. So, nothing was done. Even if you had wanted something to be done at that time, there was no way anything could have been done because money was not coming in.



Besides that, people were not even working because we were trying to safeguard our lives. That is why we are in this mess that we find ourselves. So, we cannot measure the performance of the budget until when the procurement process is concluded and the ministries are in position to begin to execute the capital projects. Therefore, it will take a while before we go in and start measuring how much has been done in the execution of the budget.



The National Assembly will resume in September; do you see the possibility of government agencies complying with submission of the 2021 budget estimates as expected?



They may not be able to conclude the execution of the 2020 budget completely this year. It may not be possible, but what may be done in the current circumstances we find ourselves is to rollover these projects. Assuming you are given one billion naira to construct a road from town A to town B, and the contract has been awarded but because of time constraint, you may not be able to do 20 per cent of the job and the year comes to an end, the only option left for you is to roll over the 80 percent that has not been concluded to next year.



And money that has not been spent should be kept till next year. Rolling projects over to another year is a simple budgetary arrangement. So, that’s how it’s going to be because time is very short for the whole budget to be implemented. But we must have new budget.



Nigeria is obviously in serious quagmire, sourcing funds to finance the 2020 budget as result depleting revenue. This is because the country remains a mono-product economy for decades. What in your view is stopping her from diversifying the economy?



We have been facing this problem of non-diversification of our economy under successive governments but in this era of the current President, I have seen a shift from that scenario. Now, the economy is gradually being diversified. Agriculture is now being strengthened. Thank God that was done, otherwise, we would have been in trouble by now because during this era of pandemic, no country is allowing her agricultural produce to be exported to any other country.



The rice you are seeing everywhere is produced in Nigeria. If not that we shifted and laid emphasis on local production of rice, a bag of rice would have gone up to N100,000 because Thailand and other countries, from where we used to import our rice shut their borders, and no ship was coming into the country. They will not even be able to cultivate rice at this moment. So, they are using their stocks to feed themselves. We would have remained hungry but thank God that this government has taken bold step to diversifying our economy by emphasising on increase in agricultural activities in the country. If not, we would have been in trouble.



So, we have seen that some level of diversification in our economy has been achieved. You can see what is happening in the solid minerals sub-sector of this country; how foreigners are coming in to exploit our solid minerals. Even our own home grown experts or investors or entrepreneurs in solid minerals exploitation are also having a very good time in the business of solid minerals exploitation in this country. People are making money and this is helping our country in its entirety.



Illegal mining is a serious menace in the solid minerals sector. What is the way out of this problem?



That is a new industry and in most cases, when you are starting something new, you will encounter a lot of problems. You could see that there was an attempt to deal with this matter by the Senate and we went as far as mandating the Committee on Solid Minerals in the Senate to do a study on what is happening in that sector, so that we can bring sanity and get it at par with what we are seeing in other climes like the South Africa.




They made a very good study and analysis of the situation, and came up with very good recommendations and they will send that to the executive because we are not to implement those kinds of things. Our own is to find out what is happening, proffer solutions and then send it to the executive for implementation. So, I believe and have the conviction that the executive arm will look through the report and get the recommendations implemented. And I am sure that if those recommendations are implemented, the industry will be stronger and all the vices that we are seeing in the industry will become a thing of the past.



State governments appear to be docile in going into exploration and exploitation of natural resources in their domains and this is negatively affecting their revenues, making them to depend largely on federal allocation for survival. What is your take on that?



Well, we need to act in line with our laws. There are steps or processes enshrined by law that are  there to be used in the exploration and exploitation of our natural resources. And I think that if anybody wants to go into those activities, the laws are there to guide the person or entity. There is no problem with that. Again, we are in a federation, and the federating units have their powers and laws. They can embark on some of these activities in line with the laws.



So, there is nothing that stops any state from being proactive, to bring innovations in a way that can shape its economy and create more revenues for the betterment of its people. So, there is no restriction to that as far such the state does not go against the law of the nation.


The Nigeria-China loan agreement has an aspect that is bothering Nigerians and that is if there is need for the two countries to go for arbitration on the loan, it has to take place in Hong Kong, China, which is the lender nation. Don’t you think that a neutral country would have been better?



To me, I believe that the issue of governance is a collective responsibility. Nobody can claim the monopoly of knowledge, intelligence; it is something that is open to all of us. Anybody should contribute to any issue about the country to the betterment of the people. So, if anyone discovers that there is a certain thing that is not proper to remain in the agreement that we signed with our lenders, it is important that we look at that again.



So, I have listened to this debate and I think it is a kind of wake-up call to legal minds that handle these agreements to look at them. We as lawmakers are not lawyers but we have different sections. We have people that have intelligence and cognate experience in the art of lawmaking, and even in law as a profession. When we look at all these agreements, we check them again and see that we don’t leave a loophole, which any country can capitalize on to create problem for the country in future.



So, it is good that members of the public will also put an eye on what we do or what each lawmaker does. It is a very good development, particularly you in the Fourth Estate of the Realm; you are part of the government. When you see anything, which may escape our own side, let us know, and we will look at that.



Don’t you think that it is not good for the centre of arbitration on the loan to be in China, the lender nation?



I will not be very categorical until I assemble my experts. I am not in the Committee on Local and Foreign Debts and I will need to consult widely and get the position of my own staff and do the proper checks before I make a categorical statement on this. I don’t want to jump the gun. This debate has been going on. I have asked for the agreement to be given to me and it has not reached me yet. What we have always passed is the borrowing plan. There has not been a time the agreement itself was brought for us to look at the whole thing.



But I believe that the office of the Attorney-General would have handled that in the best interest of the country. Even the office is manned by human beings; the minister is a human being. So, there could be some certain things that may escape his sight but if anybody sees that, his attention can be drawn to it. So, I will need to look at the agreement before I make my opinion because it is not good for me to make statements on what I have not seen.



Even if I have seen it, I need to consult my experts who are working for me, brainstorm and find an acceptable opinion about what I will declare as my opinion in respect of this question.



Looking at the impact of COVID-19 on the nation’s revenue, borrowing appears to be inevitable. But are you not worried that Nigeria is gradually sliding into deep and virtually irredeemable debt?




You see, the issue of debt is not something that is out of place in the global economic system. It is something done. But the fact is when you borrow, you have to utilize it to the best interest of the country. Once you do that, there is no problem. The most advanced country in the world is America but the most indebted country in the world is also America. If you close the American economy, the whole world will be affected but America is the number one borrower in the world.



Brazil at a time was the talk of the world in terms of indebtedness but today, Brazil has gone very far. Her infrastructure is superb. She has modern technology. She manufactures different high-tech items like aero planes and so on and so forth. So, you could see what they borrowed was utilised to develop their economy.




If you look at our own case in this country, where we do not have sufficient power, we do not have good roads; the water supply infrastructure is not enough, if we don’t fix all those things, how do you have a sound economy? Of course, we can’t have a sound economy. And if you wait to utilise the money you have to do all those things, you won’t be able to have sufficient power to boost the economy.



You know Dangote is the richest man in Africa. He is building a wonderful refinery in Lagos but he has to borrow money to add to what he has. He had to go to the bank; I learnt that there was a consortium that brought money to them and he added to his own to build that refinery. So, borrowing is not bad but what you utilise that money for is the issue.







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