Nigerians certainly have reasons to fret whenever any government in Nigeria talks about external borrowing. As the saying goes, “once beaten, twice shy.” Nigerians have been beaten more than twice by successive governments at all levels such that by now, they have learnt their lesson. I might have been too young to analyse issues during the General Yakubu Gowon years, but, from all indications, whatever the sins of that government, they are like snow compared with the kinds of sins succeeding governments have committed against Nigeria and Nigerians; and which they are still committing. This is the reason matters of foreign loans have always remained contentious, indeed usually preceded by heated debate.
Shortly after assuming power on August 27, 1985, the then Head of State, General Ibrahim Babangida, promised to break the deadlock in the stalled, two-year-old negotiations with the International Monetary Fund (I.M.F.) over terms for a multibillion-dollar loan. At that time, he called for a public debate on whether the country should take the loan or not. There was a flood of opposition with many Nigerian newspapers saying a capital NO to the loan. “Don’t take the poison,” The Punch screamed. Yes, poison because of the conditionalities attached to the loan. Nigeria should devalue its currency; put an end to fuel subsidy, etc.
Yet, from 1964 when Nigeria took its first loan from the Paris Club of Creditor Nations from the Italian government to finance the Niger Dam till the end of that decade, the country’s external borrowing was relatively low.. However, the oil boom years (1971-1981) saw a whetting of the country’s appetite for foreign loans, with all tiers of government, private banks and parastatals going for all manner of unviable loans. But the bubble burst when oil prices crashed in 1982 and repaying the loans became difficult.
The country’s return to civil rule in 1999 saw it embarking on an aggressive debt forgiveness campaign. The campaign paid off on June 29, 2005, when the Paris Club and Nigeria agreed on US$18 billion debt relief package, out of the $36 billion the country was owing as at December 2004. While many Nigerians applauded the decision, some others saw it as economically unwise.
This is one of the reasons why it is so sad that a country which paid such a hefty price to exit the debt trap is about relapsing into it, barely 14 years after. The excuse is the usual excuse of the urgent need to fix our dilapidated infrastructure. All kinds of figures have been bandied as the amount needed for this. Mckinsey puts the amount at $31bn annually, over a 10-year period. Director-General, Bureau of Public Enterprises (BPE), Alex Okoh, in his own estimation puts the average required to turn the infrastructure tide at $100 billion per annum for the next six years.
Just last week, the Minister of Finance, Budget and National Planning, Hajia Zainab Ahmed; her works counterpart, Babatunde Raji Fashola; Minister of State for Transport, Senator Gbemisola Saraki; and the Director-General of the Debt Management Office (DMO), Ms Patience Oniha, told the House of Representatives’ Committee on Aids, Loans and Debt Management that we need about $22.7billion loan to fix our infrastructure.
It is instructive for President Buhari not to behave like the immediate past governor of Lagos State, Akinwunmi Ambode, who put several things on fire at the same time without the capacity to see them all through. His government behaved as if it was going to be the last government before the coming of our Lord Jesus Christ, given the way and manner he started projects that was clear to the discerning that he could not successfully execute without some things giving way. So, as he was busy working on gigantic projects, little details of governance were abandoned and the result was the decay that attended his last months in office. His successor is still busy clearing the mess.
What I am saying is that President Buhari cannot fix all of our problems; so he should not pretend he can. Indeed, he would have helped this country a great deal if only he is able to stem the tide of corruption, that cankerworm that has made Nigeria its headquarters. Many Nigerians have said it loud enough that they did not vote for him because they expected any especial economic reform from him. The main issue in the country in 2015 when Nigerians gave Buhari their mandate was the need for change from the old, corrupt and inept order to something refreshingly different.
Nigerians have seen so much of bad governance that they only pretend to be comfortable with government and government officials simply because the world is yet to have alternative to them. I cannot remember when last any government told us that our sacrifice has been accepted by God. All the governments I have known in this country have always asked Nigerians to brace up for hard times. They are always calling on the people to make sacrifice or tighten their belts when those of them in government are loosening theirs. The same scenario is still playing itself out even under our change-mantra government. While lawmakers in the National Assembly have awarded themselves ungodly amounts for all manner of things, they are asking us to be ready to pay more Value Added Tax (VAT) and other taxes. While people who served for only four or at best eight years as governors have designed ways to pay themselves outrageous severance packages, civil servants who toiled for 30 years and above, rising through the ranks, die on pension verification queues.
The greed at that level of government is such that even when these people stop being governors, they plot their way into the National Assembly as senators and some of them get paid as senators even as they continue to draw pension for their previous office. I was writing this piece on Friday when the Alfa in one of the mosques opposite our office was talking about some of the country’s past presidents that we have now forgotten even though they are still alive. They are the ones now calling attention to themselves whereas in their days in power and in government, roads in Lagos would have been cleared hours before they woke up to come to the state from Abuja, with soldiers and policemen lining the routes. Such is the ephemeral nature of power; yet, Nigerian leaders hardly learn from the past. Present politicians do not seem to have learnt any lesson about the temporary nature of their positions. Otherwise, they would not be giving to themselves some people’s life earning as severance packages. One of them had the audacity to write from a non-existing ‘Office of the Former Governor’ asking that he be paid five months arrears of the obscene pay that he signed into law shortly before leaving office! We do not have any evidence that things have so significantly changed or that this is not what we would spend parts of the loan on.
Prof Soyinka once alluded to his generation as a wasted generation. That is largely true; even though as a Christian, I loathe such negativity about life. But, if the elders have wasted their own generation, then they should not eat up the future of unborn Nigerians, which, as far as I am concerned, is what President Buhari’s request for $29.9billion foreign loan represents. This is money that our children would still be paying long after the president is gone.
President Buhari and his team may be upbeat about the government spending the loan judiciously. They are alone. We’ve heard that several times before. The Buhari government inherited an external debt of about $10.32 billion in 2015. Sadly, this had more than doubled to $22.08 billion by 2018, about $4billion more than the amount the Obasanjo administration paid in 2005 to exit the debt trap. All this idea of we are still under-borrowed or debt-to GDP ratio thing, for me, is now becoming jaded. I think we have got to the stage when we can no longer continue to leave the country’s economy in the hands of Bretton Woods’s economists alone because what is at stake is our collective future. It is true that there is a universally acceptable percentage of budgets that should be spent on education, for instance; or the ratio of policemen to population, but some people have equally argued that these prescriptions are for developed countries or countries where there are reliable statistics and where institutions work, not our kind of environment. I think we should extend this school of thought to the debt-to-GDP ratio of a thing. What is suitable for the developed countries in terms of debt-to-GDP ratio may not be suitable for us, given our peculiar circumstances. What we sometimes refer to as the ‘Nigerian factor’.
One question those who have been arguing with me on the need to take the loan have not successfully answered is: suppose the Buhari government also mismanaged the $29.9billion loan? Are we not going back to square one? Won’t we be making the same case for the coming governments that they too need loans to fix infrastructure? So, at what point do we get to the stage of over-borrowing; or, better put, to a point where we can comfortably say government should not make any further loan request because they are likely to mismanage it? I don’t see the National Assembly rejecting the president’s proposal, but, the best I can say is that they be guided by national rather than personal or party interests. If we can’t leave good inheritance for our children, we should not make them pay for what we ate. I do not see how a government that has hardly made 50 per cent budget implementation in over four years would be able to handle $29.9 billion in barely 42 months. That is without making allowance for lame duck period in the remaining part of President Buhari’s second term.
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