By Emmanuel Onwubiko
Nigeria is a hoax. NIGERIA is a paradox. NIGERIA is a
wonder of the world.
These three phrases sum up the sentiments that run
through the minds of most critical thinkers of Nigerian origin who are unable
to decipher or offer any logical explanation for why Nigeria is rated as a
resource rich nation but doubles as home to the largest population of
absolutely poor and dejected members of the human community.
Broadly speaking however, it is known that the reason
for the unwelcomed paradox is because of the crass ineptitude of the political
class that have through extensive manipulations of the electoral system,
managed to hold on to political power since the last half a century after flag
independence.
Professor Chinua Achebe’s summed up the above scenario
of incompetent leadership that Nigeria has been cursed with almost in perpetuity.
“The trouble with Nigeria is simply a failure of
leadership…The Nigerian problem is the unwillingness or inability of its
leaders to rise to the responsibility, to the challenge of personal example
which are the hallmarks of true leadership,” - Professor Chinua Achebe.
To underscore the debilitating leadership crisis that
Nigeria is faced with, all that a person needs to do is to understudy the
administrative style of the current president who was once a military dictator
retired Major General Muhammadu Buhari.
Since he assumed office five years back, this president
has rolled back Nigeria right into the inglorious class of a member of the
world’s heavily indebted nation.
Nigeria has under president Buhari made a negative
detour to become a notorious borrower to an extent that there is now hue and
cry from all concerned patriots who are sounding loud note of warning that the
current administration will lead Nigeria into an economically enslaved nation
to the lenders such as China.
This sordid tale of an inglorious reversal of the gains
made by the previous president Olusegun Obasanjo’s administration who led
Nigeria out of the debts trap, need to worry every Nigerian because of the
dimension that the addiction to borrow has become with president Buhari’s government
and his aversions to public opinion which is of against the toxic move. But why
make Nigerians the unwilling slaves of China through the irrational borrowing
patterns? Did the Nigerian Customs Service not tell us that in 2019 alone, it
raked in N341 Trillion as revenues? Did the Federal Inland Revenue Services not
claim to rake in billions from taxes? Where are this money and why does
government borrow so much and claims to be building national infrastructures
which still remained collapsed? These conundrums are what every reasonable
Nigeria is asking because it is a notorious fact that only few years back we
exited from that disgraceful class of heavily indebted nations. From www.cgdev.org we are told the
story of Nigeria’s freedom from debts as follows: “Nigeria,
home to one in five Africans, has been the continent's most indebted
nation."
"With $36 billion in external debt, 100 million
people living on less than a dollar a day, and a fledgling democratic
government attempting reforms, Nigeria should have been a strong candidate for
debt relief. Yet, in part because of its oil revenues, Nigeria slipped through
the cracks of debt relief programs. In 2004, CGD set out to provide analytical
support to Nigeria's efforts to persuade creditors to agree to an appropriate
debt relief package.”
In October 2005, Nigeria and the Paris Club announced a
final agreement for debt relief worth $18 billion and an overall reduction of
Nigeria's debt stock by $30 billion.
According to the authors, the deal was completed on
April 21, 2006, when Nigeria made its final payment and its books were cleared
of any Paris Club debt. CGD Fellow Todd Moss, who led CGD's work on Nigeria's
debt, explains the outcome of the deal.
"This watershed deal was the result of months of
tireless work by both Nigerian officials and the creditors.
The research platform known as CGD stated that it is
proud that its work contributed to this historic outcome.
It says: "A September 2004 CGD working paper,
Double-Standards, Debt Treatment, and World Bank Country Classification: The
Case of Nigeria, argued for Nigeria's reclassification as an 'IDA-only' country
within the Bank—a prerequisite for debt relief. This overdue change in status,
announced in June 2005, enabled Paris Club negotiations to begin in earnest.
CGD's work also influenced the structure of the final agreement, which included
the first-ever discounted buyback within the Paris Club, an innovation first
proposed in an April 2005 CGD note, Resolving Nigeria’s Debt Through a
Discounted Buyback."
Also, it says that the Center's contribution to the deal
has been recognized by participants in the negotiations, by others close to the
process, and by major media:
"Your catalytic work and analysis made a
difference…especially the work of CGD in facilitating the reclassification of
Nigeria as an IDA-only country as well as putting forward an innovative
solution to the debt problem." —Ngozi Okonjo-Iweala, Minister of Finance (as
she then was).
"CGD has played a critically important role… I have
it first hand from negotiators in the Paris Club that it was the CGD concept of
a buyback that was the tipping point that led creditors to agree debt relief
for Nigeria…This is a great achievement for all concerned, and is in no small
part due to the work of CGD." —Ann Pettifor, co-founder Jubilee 2000 and
Director of Advocacy International
CGD was described by the New York Times as "a
nonpartisan research institution in Washington that proposed elements of the
[Nigerian debt] deal" (Oct 21, 2005) and by the Economist as "the
Washington think-tank that first proposed the buy-back" (October 20,
2005).
Nigeria's debt relief deal is historic. Although the
short-term financial windfall will be modest, the real potential impact is for
the future. The long-term challenge for Nigeria will be to consolidate the
gains from the debt deal by pushing forward with economic reform and ensuring
that the benefits from debt relief are shared with the population. This is by
no means assured, but the debt deal is an important step in the right
direction. These lofty aspirations have all evaporated due to poor economic
management of the Muhammadu Buhari-led administration which sleeps, dreams and
wakes up thinking of the next loan to apply for. Nigeria under this government
has sleep walked back into the unfortunate class of heavily indebted nations
and in five years, the government has accumulated what took successive
governments in the past over two decades to build up.
The below story is why every Nigerian should worry.
The media is awash with the frightening moves by the
government of Muhammadu Buhari to once more borrow heavily from China.
The Muhammadu Buhari-led Federal Government has offered
a lame and irrational explanation why it decided to approach the
China-Exim Bank for a $17bn loan request.
It said other lending institutions like the World Bank
and the African Development Bank were not showing much interest when Nigeria
approached them during recession.
The Minister of Finance, Zainab Ahmed, stated this in
the Senate while defending the decision of the regime of the President, Major
General Muhammadu Buhari (retd.), to borrow $29.96bn loan to fund critical
infrastructure across the country.
She explained that the 8th National Assembly had
approved about $6bn for the Federal Government out of the $29.96bn loan,
leaving a balance of $22.8bn.
The Finance minister Ms. Ahmed told the Senate Committee
on Local and Foreign loans that the Federal Government and some state
governments were jointly requesting the loans from various lending
institutions.
She said 70 per cent of the loan, which is about $17bn,
would come from the China-Exim Bank while others would be sourced from other
lending institutions such as the Islamic Development Bank.
The minister maintained that the country had no issue
with its current debt profile but noted that its dwindling revenue could not
fund the various projects that were expected to have meaningful impact on the
lives of Nigerians.
She said, “The funds ($22.8bn) will be channeled to the
funding of infrastructure, which will enhance the productivity of our economy.
“Other projects are in healthcare and education. It also
includes projects for the rehabilitation of the North- East geopolitical zone,
which has been ravaged by insurgency.
“Others are the Mambila Hydro Power project ($4.9bn),
Lagos-Kano modernization rail project ($4.1bn), the Development Finance project
loan being provided by a consortium of World Bank and African Development Bank
agencies ($1.28bn).
“Above all, the loan will help us to improve our
electricity supply, reduce poverty, create jobs, ensure access to finance,
agricultural productivity, guarantee food security, achieves high school
enrolment, provide clean potable water, rehabilitate major roads and develop
the mining industry.”
On why the country is seeking 70 per cent of the foreign
loan from China, the minister said, “it is meant to make funds available to our
own development institutions so that they can give out loans because access to
finance has been difficult for the SMEs.”
On the debt profile of the country, the minister said,
“The 2016 – 2018 external borrowing plans are both for the Federal Government
and the states. So, some states would be responsible for the payment of some of
the loans.”
On the sustainability of the nation’s debt portfolio,
the minister said Nigeria’s current portfolio ceiling as set by the Fiscal
Responsibility Act was 25 per cent of total debt to GDP. He said, “The ratio
for December 2018 was 19.09 per cent but it reduced to 18.9 per cent by the
middle of 2019.
“The debt service to revenue ratio is however high and it
provides us strong justification for us to drive our revenue.
“For 2017, the ratio was 57 per cent and 51 per cent in
2018.”
The minister said the nation’s debt level was low
compared to other countries like the USA, the United Kingdom and Canada. The Chief
of Staff to the Kaduna State Governor, Mohammed Abdullahi, defended the state’s
$305m loan request before the panel.
A representative of the Katsina State Government, Yakubu
Danja, said the state planned to source $100m out of $110m from the Islamic Development
Bank.
He said the state would enjoy between 20 to 50 per cent
grants and that projects to be executed would cover the entire local government
areas of the state. He also said that the loan was interest-free.
Kogi State Government’s Commissioner for Finance, Budget
and Planning, Mr. Ashiru Idris, said the $100m that the state was requesting
would be used to develop infrastructure to encourage investors and diversify
the economy. These are all propaganda that lack justification.
Unfortunately, Nigeria now has a lamedock Senate and a Senate headed by a
stooge of President Muhammadu Buhari so the Senators will okay the request
because the Senate President Ahmed Lawan had already stayed that his Senate
will pass every request from President Muhammadu Buhari because they are good.
The Chairman of the committee seeking clarification on the loan package is a
stooge of the Kaduna state governor whilst the Finance minister is the Sister
of the Kaduna state governor. Nothing good can come from the Ahmed Lawan led
Senate.
Just before we round up on the frightening development
regarding the continuous pursuit for loans by president Buhari, let us read a
little of what Oseloka H. Obaze, a seasoned diplomat, international civil
servant, strategic policy advisor, wrote in 2016 about Buhari’s economic policy
outlook.
Writing in his book “Prime witness charge and policy
challenges in Buhari’s Nigeria”, he says: “Ten months into its first year in
office, the Buhari presidency remains economically challenged. Its espoused
economic policies have not manifested. As the economy wobbled towards a glaring
and deleterious downturn, criticisms raged, compelling variants of ad-hoc
policy approaches. Because most of the policy options were disconnected, they
presented as policy dissonance, if not confusion.”
As Fela the legendary Musician would say, CONFUSION
BREAK BONE AND WE HAVE DOUBLE WAHALA for dead body and the owner of the dead
body.
Nigerians, must we allow ourselves to become slaves of
China? The die is cast!
*Emmanuel Onwubiko is the Head of the Human Rights
Writers Association of Nigeria and blogs@www.huriwanigeria.
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