In the past weeks and months, several issues have confronted Nigeria’s nationhood like two different teams playing on a football pitch. Some of these issues include the corona virus pandemic, the oil price crash at the international market, the almajiri brouhaha which generated heated controversies and arguements among states and the appointment of a 75-year old Professor Ibrahim Gambari as the new Chief of Staff to the President.
While some of these issues are yet to be tackled headlong, a seemingly irrelevant one which is beginning to awaken the consciousness of all and sundry is the mystery of Nigeria’s increasing debt profiles.
This mystery is one in which past administrations have struggled and strived to unravel. However, these struggles have ended in a seemingly show of ridicule, failure and defeat. Consequently, the inability to unravel this mystery which is gradually putting on the garment of a conundrum has given birth to several theories, postulations, assumptions, questions, opinions and controversies both within and outside the nation’s territory.
From the purview of financial management, capital is an integral necessity in managing production and sustaining the pace of national development. Conversely, capital being a relatively important factor is scarce especially in developing countries like Nigeria where the rate of progress is slow and at an infant stage. As a result of this, the onus is binding on all policy and decision makers of countries who fall within this category to look for alternatives to finance their operations. Such include: the sale of national assets, cutting costs and expenses as well as borrowing.
It is important to note that debt and borrowing in realistic perspectives are both neutral and harmless concepts. Its neutrality and harmlessness on the contrary, is purely hinged and dependent on its management both maximally and effectively. This means that the borrower must be willing, committed and ready to ensure that the borrowed fund is invested in profitable businesses to bring about large return on investment (ROI). By this the purpose for which the loan is taken, has not been defeated.
Going down the memory lane, Nigeria took her first loan of about $28 million from the World Bank few years before independence. This was in a bid to construct rail lines across strategic locations in the country. Chief Olusegun Obasanjo at the initial stage of his government under the military regime also left Nigeria’s foreign debt to the tune of $3.744 billion. Precisely after a decade, the Shehu Shagari adminstration had increased the pace to about $20 billion. The discovery of oil which turned Nigeria to a mono-economy further made it almost impossible for the recurring debts to be paid.
From then, subsequent governments have either played it right or wrong in increasing or reducing the nation’s debt. The current administration seems to have played it wrong as the accumulated debt currently is above $80 billion. This according to Jeff Okoroafor, a public affairs analyst and publisher of the online news website, Opinion Nigeria, is without any infrastructural development which could serve as a surrogate to support the borrowings.
On the rapidly increasing debt, Late Chief Obafemi Awolowo was quick to reprimand the then Shagari government on his thoughtless and that of the members of his team for the depth to which Nigeria was sunk in the slough of foreign indebtedness.
An erstwhile Presidential Aide to the Late Umaru Musa Yaradua, Clement Ofuani, in a recent statement asserted that the dwindling rate of economic activities occasioned by the corona virus pandemic in places like China might have incapacitated the country from servicing her foreign debts in the current year. “Our ability to service foreign debt is in jeopardy, meaning that the ability to borrow more is practically impossible,” he said. Lest we forget, China remains a large scale buyer of the nation’s highly acclaimed and revered oil.
As if that were on a lower scale, a world renowned economic expert, Ike Brannon had in the middle of last year wrote in the Forbes magazine that the current loans and debts which is been incurred by the present administration could threaten the economy. He declared without mincing words that the country needed fundamental and far-reaching reforms in order to solve the deep-seated structural problems with the country’s economy.
In a similar perspective, The United Nations Deputy Secretary-General, Amina Mohammed who incidentally is a Nigerian had this to say on the nation’s debt profile:
“We are now back again, in my country, the level of debt is worrying, but it is happening all over, for Africa, if that is the way we want to go, we need to sit down and have a better conversation about all the asks of a growing economy; that needs to be inclusive”.
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Corroborating the above, Reno Omokri, another former presidential aide said via his his Twitter handle (@renoomokri) that the governments of Chief Olusegun Obasanjo, Late Umaru Musa Yaradua and Goodluck Jonathan had poverty alleviation programmes. On the contrary, the present Buahri-led administration’s sole agenda is to accelerate the rate of poverty. This is purely as a result of the debt the country has been plunged into with nothing to show forth for it.
The garrulous and exorbitant life styles of our hitherto glorified semi-gods christened as decision-makers has compounded the issues of paying Nigeria’s loans and debts. It is disheartening yet a necessity to say that Nigeria’s debt is managed by people who have no real idea about how the whole process should be done. The Debt Management Office (DMO), a federal agency established in the early 2000s and saddled with the responsibility of managing the nation’s debt in my opinion is clueless about the fundamental procedures of managing a debt especially on a national scale.
While we can say that well meaning Nigerians and economic experts have mounted and are still mounting pressure on the government to take a step in reducing the accumulated loans, nothing conspicuous is been done. Despite the high level of poverty which is an result product of low gross domestic product (GDP), large scale unemployment and corruption, the country still seeks to maintain an hitherto expensive bi-cameral legislative process which is characterised by wanton and excessive spendings in the name of allowances, constituency packages and severance funds.
One then begins to wonder why the need for taking loans if they are not been utilised on the crippled economy.
Several roads are already death traps. Kidnappers and other nefarious criminals have quickly seized this opportunity to enrich their pockets. This is by abducting helpless citizens and demanding huge ransoms from their families before release. Other sectors of the economy such as the educational and industrial sector that could have been revamped to generate revenue via these loans have been neglected. We have thus left the weightier matters of the law to focus on irrelevant and trivial issues which are less significant. Thus, we can rightly conclude that Nigeria is trying to kill a fly when there are several cats wreaking greater havoc.
The challenge which we have covered with the veil of deceit is gradually turning to a war. The truth which we have always been trying to avoid from individuals both within and outside the country is staring at us again. We can either take necessary actions to prevent a war or keep it concealed till it has exploded when there wouldn’t be any room for adjustment.