BORROWING in the form of foreign or domestic loan is part of running a government. This is undertaken to mark-up for short falls in the fiscal demands of the affected government within a given time. Nigerian government overtimes had engaged in this culture to a worrying level in her history until 2005, when then president, Chief Olusegun Obasanjo did the unimaginable – negotiating a debt relief that saw the cancellation of billions of dollars debt hanging on Nigeria’s neck.
The feat etched not only Obasanjo on the marble of honour at the domestic front but elevated the rating of then minister of finance, Okonjo Iwuala, who piloted the craft that delivered the golden fortune to Nigeria and her citizens.
Before the final cancellation of Nigeria’s debt by creditor bodies in October 2005, the country’s external debt with the Paris Club stood at 36 billion dollars while huge amount of money had gone into the way of servicing the debt with 18 billion granted as relief.
This implies that debt servicing which dated back from 1985 to 2004 cost Nigeria 35 billion dollars; a significant sum that could have affected big infrastructural boosts if well channeled.
The questions that bog the minds are; why had successive Nigeria governments continued to engage in borrowing spree and to what extent had these disturbing sums of money borrowed, helped improve Nigerian populace?
As a major force in oil exporting economy, the country earns tremendous revenue from crude sales on daily basis. The oil boom of the 1970s, the gulf war oil windfall of the 1990s to mention some extra ordinary fortunes that smiled on Nigeria in the past, it will be expected that infrastructural development and life security in Nigeria will be on the high notch.
Shockingly, very little or no corresponding growth to march the nature’s benevolence had come from her stables to underscore the cutting edge advantage she ought to enjoy over her contemporaries either at the African clime or the global front. The state of road infrastructure in Nigeria is highly worrisome. From Abuja to Lagos, cutting through Makurdi, Enugu, Onitsha, Benin, Ore, the roads remain horrible despite huge sums of money that had seemingly gone into it from successive governments. The present government is making efforts albeit unconvincingly to make a difference. The energy sector has not faired better either. The health, manufacturing and educational sectors all appear too weak to be considered healthy. Are these loans not taken to help revamp some of these sectors, if not all?
That the country had continued to sink deeper into choking point with poverty was reflected in ranking of Nigeria as poorest nation in the world with estimated 87 million people living in abject poverty of less than 1.9 dollars per day according to World Poverty Clock as at June, 2018 and compiled by Brooklyn Institute. Perhaps, that informed the boosted hopes on the cancellation of Nigeria’s debt by the Paris Club as a trajectory for a new Nigeria.
Further questions on the intent of these borrowing governments without blue print on how the debt should be liquidated before taking exit call for answers and the parameters to assess its utilisation should be well articulated.
The years 2005 to 2015 could best be described as debt free window for the country given that Nigerian debt profile has now climbed to the upwards of 22 trillion dollars as at June 2018 according to Debt Management Office (DMO)s statistics. Some experts have said that the present debt level is not inimical to the country’s growth. What they did not explain is the level at which Nigerians should start getting worried. The current government under President Mohammadu Buhari has reputation for probity, zero tolerance for corruption and support of the masses; therefore, what affects the masses negatively should give him serious concerns.
Surprisingly, despite assurances of no harms over Nigeria’s growing debt by the president and his team, masses are apprehensive on the rationale for belabouring the economy with debts. The truth is, Buhari and his economic advisers are already veering off from the point of connection with the masses in this wise. It is a matter of truth that citizens want amenities comparable to what obtains in other decent climes, which had helped improve their living standard, but it is certainly not anchored on mortgaging their future with unwarranted risks.
It should not be forgotten hurriedly how the creditor organisations dictated the country’s economic policy- direction and castrated the naira of its values in those days of debt burden. Today, the naira is yet to recover from the impact and remains too weak to compete with leading currencies in the league of nations. Apparently, further embrace with unwarranted loan facilities with world bank and its allied agencies would do more damage than good. This assertion is premised on the fact that previous loans had not been properly utilised for the purpose it was taken in the past and the present seems no different.
Federal governments had always had good intentions in taking loans but in the end it turns awful. According to an industrialist, Ernest Ngene, “as obtains currently, Nigeria should focus on strengthening the manufacturing sector. This cannot be achieved with frivolous spending, which coincidentally follow the fiscal patterns of successive governments. If at all it should be contemplated, it should strictly be to create more wealth. When you look at the level of poverty across the land, you will ask yourself how such monies could have come without significant impact and whether there is need for more. So the best option is for government to steer clear off borrowing and do more with earning while those who misappropriated any borrowed funds in the past should be made to account for it.”
Apparently, federal government should take the initiative of repositioning her financial institutions to provide easy credit line capable of growing her small and medium scale economy. The ‘tradermoni’ programme definitely does not fall into place here. Efforts should be to provide credit access to those who have capacity to drive meaningful ventures with emphasis on local content.
Government has made clear its willingness to boost agriculture and there are people out there willing and ready to key into the programme. The challenge remains that greater number of this group has not been captured. Again, government’s intervention policies end up in smokes, allowing few privileged elements to sidetrack it to their personal gains. The result is poor practical results with extended masses’ suffering.
Extensive research programmes should be developed and researchers be motivated enough in their fields. Nigeria will continue to wallow in poverty despite enormous endowments if a paradigm shift from wasteful recurrent fiscal structure is not adopted. Those expected to facilitate this needed turnaround, unfortunately are the beneficiaries of the unenviable system. Does anyone need to ask why the remunerations of the executive, legislature and powerful oligarchs in the judiciary will continue to weigh on capital programmes? Not much is left after beaureacratic disbursements, so even when the World Bank’s till is entirely borrowed in the prevailing context, Nigeria will still be stuck at a standpoint.
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