Oh! Poor Nigeria! That’s the lamentation, my exclamation when the President of the Senate, Federal Republic of Nigeria, Dr Ahmad Lawan, made headlines recently on Nigeria’s fiscal status. He said Nigeria is not a rich country and that we shouldn’t be deceiving ourselves. He explained what he meant succinctly especially on the reasons why the country is daily sinking into the abyss of debt. As a man who is beyond passive onlooker, the value of what he said is high. And as Nigerians, it is normal to react in diverse ways to Lawan’s verdict as humans and as those who hold opinions on how our wealth is consumed. Is Nigeria actually poor or rich?
We were taught English proverbs in primary school and one of those that have remained indelible is “he who goes a-borrowing goes a-sorrowing”. It might be the sound of the language of the proverb, it might also be its meaning, but this proverb has remained ingrained in my heart like the first time I heard the botanical names of yam species. He who goes a-borrowing goes a-sorrowing has been there in my memory, always sitting precariously quiet, and looming like the executioner’s sword. It’s still so now that I’m grown up. I still fear borrowing of anything; I dislike borrowing of any kind. But I have to also fight my demons… So, it’s sometimes okay to borrow. One might have no choice other than to borrow if one is absolutely helpless and if the need is compelling. It’s also important that one should know to what end one is borrowing.
Nigeria, according to Senator Ahmed Lawan is borrowing because “we don’t have the necessary revenues.” In other ways and in other words, Senator Lawan is telling us that we are not what people think we are. He is reiterating that we are not getting the revenue that is enough to run the country. “Our options are really very limited as a country. First, we don’t have the necessary revenues. Nigeria is poor, we shouldn’t deceive ourselves. Nigeria is not rich given the circumstances we live in, given the challenges we have; our resources are so low, our revenues are so low and therefore the option of not doing anything, just to sit because we have no money, we shouldn’t go for infrastructure development, is not even an option worthy of consideration.”
Lawan is informed. No mincing words about that. He’s one of those who can pass as members of the inner caucus of the Muhammadu Buhari government. He is one dangerous bit of the flying debris we are trying to manage so as not to lose our eyes. So, I believe he spoke from the position of knowledge. However, he has used his knowledge in such a way as to cover our vision or our sight.
From the knowledgeable Lawan, I think we have got the often made point that we need funds to build infrastructure and make our country competitive. That explains why Nigerians react only in hapless whimpers when humongous sums are mentioned as our target foreign loans. And the exasperation increases when we all remember that this Lawan’s Senate is a ready toy at the disposal of the executive arm of government. The president of the Senate, who is also the chairman of the National Assembly has made it so and he told us he made it so when he assured the executive that his senate would pass anything from the president because he believes it’s for the good of the country. So, taken, we borrow for infrastructure. Even when we go by Moody’s estimation, Nigeria’s infrastructural deficit is to the tune of $3 trillion, which the rating agency also hinted was three times the size of our GDP. So, there’s need to borrow for infrastructure.
However, that is the simplest part of the ‘we don’t have money, so we must borrow’ aspect of our national life. The confusion and abracadabra is in the sincerity or otherwise of the entire gamut of government borrowing and financing. We have found ourselves in such a dearth that our senate president had to cry out! But apart from the shout, what else do we have? Would it not have been reasonable if the entire political leadership considered this same Nigeria they are desperately trying to hold together before grounding her with debts? Our politicians cannot hand infrastructural development to the private sector because there lies their pot of soup.
Between January and May 2021, we spent 97 per cent of our entire earnings, all our revenue on debt servicing! So, we are left with just three per cent. It means that we are borrowing money to pay salaries, run the various offices and execute capital projects. There is ‘sinking fund’ which is supposed to be collated to pay debts that are due. Debts that are mature are paid from the sinking fund. We have nothing in our sinking fund, so we also borrow money to serve as sinking fund. Experts say what this means is that as from next year, we will be borrowing to service borrowing. And debt servicing is different from debt payment! Fitch, another top rating company recently said that 397 per cent of our revenue will be spent servicing revenue as from next year. The implication of that is that after spending our revenue 100 per cent, we will now have to look for 297 per cent to be able to service existing debts. So, there may be crisis from next year.
Only on Wednesday, the federal executive council approved borrowings to fund N5.62 trillion budget deficit. Interpreting this by myself, I came up with: We have N5.62 trillion budget deficit and we will borrow money from foreign creditors to fund this deficit. The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed announced the approval of the medium-term expenditure framework and the fiscal strategy paper in which this borrowing is approved. She said her ministry reported to the federal executive council that “the budget deficit that is projected for 2022 is N5.62 trillion, up from N5.60 trillion in 2021.” This amount, she added “represents 3.05 per cent of the estimated GDP, which is slightly above the three per cent threshold that is specified in the Fiscal Responsibility Act.”
All the gloom has led Senator Lawan to voice out our poverty. But I think our poverty is more of fiscal indiscipline among those saddled with the responsibility of leading this country; poverty of ideas and poverty of integrity. Does Lawan not know that the lifestyle of our National Assembly legislators is not reflective of that poverty he is highlighting? How will our legislator fare when you compare their salaries and allowances with those of their colleagues in the United States and other parts of the world? The internet might give you answers to any question but one answer you might not get from the internet is what the budget of the Nigerian Senate is. Try to search for how much our lawmakers earn. We have everything but money, enough money for our politicians’ greed.
and then