SOUTH-AFRICA—MINISTER of Power, Works and Housing, Mr. Babatunde Fashola, said yesterday, that the debt for infrastructure in Nigeria was good debt as far as he is concerned.
Fashola said the Federal Government should not be judged like a private company when it comes to borrowing.
He said this at the Africa Investment Forum in Sandton South Africa.
His words: “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 is 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 former governor of Lagos state 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: “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.