Operation bankrupt Nigeria

THE ant once shared a night of passion with the elephant and woke up the following morning to discover the bedmate was dead. Mr Ant was in tears as he lamented “Just one night and I will now spend the rest of my life digging a grave.”

In like manner, Nigerians should be weeping today and screaming “Just two terms of APC and we and our children will now spend the rest of our lives paying debts.”

It was a rude shock that days after Senate President Ahmed Lawan, declared that ANYTHING President Muhammadu Buhari brought was good for Nigeria, the rubber stamp Senate received a request for another $29.96 billion loan to add to the country’s crippling debt portfolio.

In re-submitting the letter for the loans rejected by the eighth Senate, the President said “While I transmitted the 2016-2018 external borrowing plan to the eighth National Assembly in September 2016, this plan was not approved in its entirety by the legislature.

“Only the Federal Government’s emergency projects for the North-East’s four states projects and one China-assisted Railway modernisation project for Lagos-Ibadan segment were approved out of the total of 39 projects.

“(b). That outstanding projects in the plan that were not approved by the legislature are nevertheless, critical to the delivery of the government’s policies and programmes relating to power, mining, roads, agriculture, health, water and educational sectors.

“These outstanding budgets are well-advanced in terms of the preparation, consistent with the 2016 date.

“Sustainability analysis undertaken by the Debt Management Office were approved by the Federal Executive Council in August 2016 under the 2016-2018 external borrowing plan.

“Accordingly, I have attached for your kind consideration, relevant information from the Minister of Finance, the specific outstanding projects under the 2016-2018 external borrowing plan for which legislative approval is currently being sought.

“I have also directed the minister to make herself available to provide any additional information or clarification which you may require to facilitate prompt approval of the outstanding projects under this plan.”

While this Senate of course lacks the fortitude to ask any question on what happened to the projects the eighth Senate approved loans for in the order of a Yes-Assembly, the former Chairman, Senate Committee on Local and Foreign Debt in the eighth Senate, Senator Shehu Sani,  has revealed the patriotic reason they turned down the loan request was to save Nigeria from sinking into the dark gully of a perpetual debt trap.

He said that the action was aimed at averting a situation where the country would be recolonised by creditor banks.

He disclosed this in a press statement on Friday in Abuja while reacting to the loan request.

Sani said the current escalation of borrowing would plunge the country into debt slavery and move us from landlords to tenants.

Sani said: “They will always tell you that even America is borrowing and I don’t know how rational is it to keep on borrowing because another country is borrowing.

“We turned down the FG loan request for $30 billion to save Nigeria from sinking into the dark gully of a perpetual debt trap. We don’t want our country to be recolonised by creditor banks.”

Sani added that our foreign debt in 2015 was $10.32 billion before Buhari assumed power.

He lamented that the figure escalated to $22.08bn in the second quarter this year, which he said, represented a 114 per cent increase.

He said, “If we had approved that loan request, our external debt could have catapulted to over $52bn and that is not sustainable.”

A former Chief Executive Officer, Nigeria Economic Summit Group (NESG), Professor Anya O. Anya, alerted the country in October that Nigeria has borrowed in three years under this administration more than it did in 30 years.

He explained that at current levels of over N25 trillion, it means that Nigeria has borrowed in three years more than it borrowed in 30 years previously, and for the country to remain peaceful and get the economy working better, it must return to the basics of federalism as the foundation of its national enterprise.

He quoted the Debt Management Office (DMO) figures to the effect that our debt portfolio in 2015 was N12 trillions but has now risen to N25 trillions.

In his maiden broadcast to Nigeria on January 1,1984, Major-General Muhamadu Buhari said of the ousted profligate Shagari administration:

“It is true that there is a worldwide economic recession. However, in the case of Nigeria, its impact was aggravated by mismanagement. We believe the appropriate government agencies have good advice but the leadership disregarded their advice. The situation could have been avoided if the legislators were alive to their constitutional responsibilities. Instead, the legislators were preoccupied with determining their salary scales, fringe benefit and unnecessary foreign travels, et al, which took no account of the state of the economy and the welfare of the people they represented. As a result of our inability to cultivate financial discipline and prudent management of the economy, we have come to depend largely on internal and external borrowing to execute government projects with attendant domestic pressure and soaring external debts, thus aggravating the propensity of the outgoing civilian administration to mismanage our financial resources. Nigeria was already condemned perpetually with the twin problem of heavy budget deficits and weak balance of payments position, with the prospect of building a virile and viable economy.”

What would the mind that assessed the Shagari government in this fashion in 1984 say of what we are going through today in Nigeria?

There would have been some little comfort if there were deliverables for all the debts the administration is plunging Nigeria into.But we cannot find any. Our Minister of Works, Mr Babatunde Fashola, continues to rationalise failures on the state of our roads. A few weeks ago, he said the roads are not too bad and two days ago changed the bad tune to road users destroying the roads which he said are not too bad. Power supply remains epileptic. The health sector remains in a shambles as our top officials seek medical help abroad while leaving the rest of us to die at home.

Where have all the borrowed money gone? What will happen to the fresh loans? Who will repay the debts? These are fundamental questions that would have been on the lips of Nigerians when the soul of this country was alive? The young people whose future is being pawned for death would have been confronting these decisions by now.


How debt ruins

Stephen Simpson, CFA

There may be nothing more central to a country’s independence than the freedom to allocate its resources more or less however the populace wishes. High levels of debt directly threaten the ability of a government to control its own budget priorities.