A former House of Representatives member, Honourable Ned Nwoko, has warned the Federal Government to tread cautiously in its loan negotiations with multinational organisations, by putting the interest of Nigeria at heart first.
Nwoko gave the warning on Friday in Ibadan during the 2019 National Public Service Lecture organised by the University of Ibadan Alumni Association, held at alumni’s multipurpose hall, University of Ibadan.
Nwoko in his lecture entitled ‘Towards Efficient Management of Nigeria’s Foreign Loans’ stressed the need for proper synergy between departments and officials who source, negotiate and secure foreign loans for governments at all levels.
The event also featured presentation of awards to hardworking students of the institution who had exceptionally distinguished themselves in their studies and another outstanding award; Bola and Justice Atinuke Ige to two students in law from the institution.
Honourable Nwoko said “Nigeria and indeed developing nations must exercise caution when negotiating or rescheduling loans with multilateral organisations like the IMF that are under the perennial remote control of few capitalist superpowers.
“The interests and goals of some of these organisations are often at variance with those of developing countries like Nigeria,” he said.
The former lawmaker urged those in charge of superintending Nigeria’s external loans to develop capacity and define coherent realistic strategies for negotiating the terms of Nigeria’s external debts.
According to him, “in avoiding or being cautious over loans with harsh conditionality from powerful western cartels, Nigeria should equally be wary of the neo-colonialist push of the emerging Eastern superpower, China.
“China’s so-called concessional loans sometimes end up as damning as the coated bitter pills from the Western powers and their groups.”
Nwoko also warned on improper utilisation of foreign loans, saying such was a major factor that makes repayment of such debt an herculean task.
“Once that happens, it becomes extremely difficult if not impossible to keep pace with repayment schedule and the accruing interest begins to rise and rise with repayment becoming a major problem.
“The interest may increase to a level where it may equal or even surpass the initial amount borrowed,” he said.
The former lawmaker posited that most China loan deals are tied to projects, saying recipient countries are often compelled to use materials, consultants and workers provided by the creditor country.
He added that a very large chunk of the concessional funds released for the projects are ploughed back to the creditor country.
Nwoko called on citizens to be more patriotic by defending the interest of their country, her institutions, economy and fellow countrymen and women.
“Situations where our own people collude with foreigners and their institutions to defraud Nigeria and Nigerians cannot augur well for the development of the country.
“Those managing our foreign debts should be on permanent alert to protect the interest the country and prevent corrupt foreigners and their Nigerian collaborators from defrauding the country,” he said.
He further called for continuity and seamless transitions with regard to the management of foreign debts so that policies would continue when the government is transferred from one individual or group to another.
“There is the need for continuity in governance anchored on transparent and seamless transitions especially with regard to the management of our foreign debts and other related financial or contract transactions.
“The ideal system should be such that when there is a transfer of power, all relevant policies, programmes, decisions and agreements would be appropriately captured and understood.
“At all times, the implications, terms, risks and processes should be taken into account on both short and long term basis,” he said.
He said that the kind of circumstance that led to the recent award of over $9billion against Nigeria in the aborted gas deal would not have arisen if such process had been adhered to.
The former lawmaker said that the country needed to act fast and correctly on a way forward, be it assemblage of a team of experts to negotiate or explore other option considered appropriate.
Earlier, the President, University Ibadan, Alumni Association worldwide, Professor Elsie Adewole, commended Nwoko and the institution’s Vice-Chancellor, Prof. Idowu Olayinka for their usual support for the institution.
She said that some outstanding students would be rewarded, saying it was imperative that they continue to promote excellence among the students.