Babatunde Fashola, minister of power, works, and housing, has spoken about the growing debt profile of Nigeria.
Speaking at the Africa Investment Forum in Sandton South Africa on Wednesday, Fashola said debt for infrastructure in Nigeria is good debt, as far as he is concerned.
The former governor of Lagos State said the Nigerian government should not be judged like a private company when it comes to borrowing.
“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,” Fashola said.
“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.”
Fashola said as a governor in Africa’s largest city, 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 federal government.
He said he gave the investors the assurance that if he defaulted, they could take the money from the monthly income of the state.
Fashola said people do not want you to raise taxes, and do not want you to borrow, yet they want roads and bridges, adding that there is no other way out.
“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.”
The minister said Nigeria’s power problems have changed over the past three years, yet the government must keep up.
Fashola explained that when he came in as a minister, the problem was how to generate power, he said today, the problem is how to distribute power.
He said to power Africa as a continent, the 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.
Nigeria’s debt has grown by over 100 percent in the past three years.