By Casmir Igbokwe
Greek gods condemned Sisyphus, a cruel king, to perpetually roll a big rock up a steep hill. The rock always rolled down each time it neared the top. Nigerian gods appear to have also punished Nigerians permanently. Bad leadership is our own big rock. The more we try to push it over the mountain, the more it rolls down rapidly. A big question then arises: who will liberate Nigerians from this seeming eternal punishment?
The answer is blowing in the wind. For us, it has become a case of one bad policy begets another. The worst now is that the so-called leaders are doing everything possible to mortgage the future of our unborn children with reckless accumulation of debts.
In 2017, the debt profile of Nigeria was N21.725 trillion. According to the Debt Management Office, the thing rose to N24.95 trillion by March 31, 2019. Out of this figure, external debt is said to be N7.8tn ($25.61bn) while the total domestic debt amounts to N17.07 trillion. The funds were reportedly borrowed to finance projects, fund budget deficit and meet maturing obligations.
Besides, all the 36 states and the Federal Capital Territory owed N5.376 trillion by December 2018. Lagos State has the highest domestic and foreign debt profile of N1.043 trillion. Its current domestic debt stock alone is N542.231 billion. Rivers and Delta states follow with domestic debt stock of N225.592bn and N223.442bn, respectively. In 2015, when former Governor Akinwunmi Ambode assumed office, Lagos’ domestic debt profile was N218.54 billion.
These debts were in spite of federal allocations, Paris Club refunds, internally generated revenues and bailouts from the Federal Government. With the way things are going, Nigeria is fast approaching the pre-2005 Paris Club debt profile.
One interesting fact here is that the states that appear to be more buoyant are the ones that borrow more. The least indebted states are the ones with very low income. I’m not an economic expert. But common sense tells me that something is wrong with the way the supposedly rich states are accumulating these debts.
Borrowing is not totally a bad idea. The problem is in what we use the borrowed funds to do. Do we borrow to fund recurrent expenditure or to expand the critical sectors that will generate more revenue for the state?
Nigeria’s economic managers had assured us that there was nothing to worry about. Former Finance Minister, Mrs. Zainab Ahmed, said earlier in the year that the debts were being invested in the development of infrastructure. According to her, the country has the capacity to repay its debt obligations. It is good to know this.
But what about servicing of these debts? Is it wise for the Federal Government to have allotted N2.26 trillion (about 25 per cent of the N8.83 trillion budget) to debt servicing alone in the 2019 fiscal year? In the first three months of this year, the Federal Government spent a total of $357.26 million to service external debts. To me, the amount is huge.
Granted that oil revenue has dwindled globally, but how have we managed what we already have? I believe we can achieve much as a nation if we curb fiscal indiscipline.
Mr. Peter Obi will bear me witness here. When he left as governor of Anambra State after eight years of meritorious service, Obi did not accumulate any debt for his successor. In fact, he left billions of naira worth of savings in cash and other investments. That was despite the fact that he built roads and other infrastructure, revolutionised education, health and many other sectors. Today, when it comes to foreign debts, Anambra is among the top seven. As at December 31, 2018, the state owed $107.04 million foreign debt and N33.4 billion domestic debt. What has gone wrong?
Last week, Governor Willie Obiano of Anambra State travelled to the City of Orange in New Jersey, United States. He went with some party and government officials. His wife later joined him there. The visit was for the signing of memorandum of understanding and investment drive. The governor said the visit also afforded him the opportunity to update Anambra indigenes in the US on what his government was doing real time, what it had done in the past five years and what it intended to do in the remaining three years. Brilliant idea! But this is hoping that the cost of the travel will not be higher than the presumed benefits that will accrue from it.
Lagos is another interesting state. The streets are currently littered with refuse. The roads are punctuated with craters and potholes. The other day, the governor of this most indebted state, Babajide Sanwo-Olu, found it expedient to donate N41 million to the Super Eagles for beating Cameroon in the ongoing Africa Cup of Nations (AFCON). The All Progressives Congress in Lagos defended the governor, claiming he had to play the politics of football. The publicity secretary of the APC in Lagos, Joe Igbokwe, gushed, “Please, do not forget that he has to play the politics when the need arises, and the mission to Egypt is part of his oversight functions as the governor of the richest state in Nigeria.” Wonderful!
Most of these state governors steal their states dry. When they leave office, they are rewarded with jumbo allowances and properties in choice locations in Abuja and elsewhere. The Economic and Financial Crimes Commission (EFCC) busies itself hunting for those who are not in the good books of the ruling cabal.
Former Gombe State Governor Danjuma Goje’s case remains a fantastic one. For eight years, the EFCC hunted and haunted him for alleged fraud amounting to N25 billion. Things started taking a new twist when he indicated his interest to contest for the Senate Presidency with Ahmed Lawan. The ruling party and the Presidency preferred Lawan. They invited the two men to Aso Rock for a meeting. Immediately after the meeting, Goje stepped down for Lawan.
As a prelude to canonising him, the Attorney-General of the Federation took over his case from the EFCC. Then, penultimate week, the Federal Government shamelessly withdrew all the charges against him. By implication, Goje is now a saint. Tomorrow, Gombe State may borrow more money to settle his pension and allowances and that of some other former state actors.
Nigeria is sick. She needs a consultant surgeon to do a surgical operation on every facet of her national life. If the rulers, for instance, prune the number of their aides, especially those who accompany them on unessential travels, things will get better. If they cut off the nebulous security votes that only secure their private pockets, there will be plenty of money to execute better projects. If they stop paying double salaries and allowances to ex-political office-holders, the rate of poverty will reduce.
If the governors stop checking into presidential suites in big hotels where they only need standard or executive suites, the states will have extra cash to dispense. If they stop chartering aircraft to some destinations that require booking commercial airlines, there will not be any need to borrow. If they stop wasting money on religious pilgrimages, there will be money to spend on capital projects. If they cut inflated costs of contracts, there will be some money in the coffers.
If the federal and state governments stop focusing solely on oil revenue, if they develop other sources of income, the urge to borrow will reduce. If they provide adequate security to farmers and deal decisively with kidnappers, killers and sundry criminals terrorising the citizens, there will be plenty of food and money in the country. If they stop diverting tax proceeds to some ignoble persons and ventures, Nigeria will be a better place. If they consider public-private partnership financing structure in execution of certain projects, there will not be much need to engage in long-term borrowing.
Above all, if the state and federal legislators do their oversight functions effectively, if they make laws to restrict unnecessary borrowing not tied to specific capital projects, the debt burden will reduce.
The tragedy, however, is that with the current characters who parade the corridors of power, there is no hope of singing a redemption song in the nearest future. It is sad.
Re: Buhari’s suspended Ruga war
Cas,your article on Ruga said it all. Remove lies, deceit and holier-than-thou pretences from Nigeria’s elders and the youth, this country will move fast in true progress. Again, it’s now obvious that the divide between the major religious and socio-political ideologies of Nigeria’s core North and the rest of the country is too much and may never be bridged in a century. This is a country where a section of the country feels no qualms imposing their culture, religion and practices on others, ready to spill blood. If you go into the federal services you’ll see more, the judiciary and some “juicy ministries” not left out. So, Ruga is the most recent act of imposition.
– Senior Citizen, +2348055121834
The pressure from many quarters over so-called proposed Ruga settlement project, which President Buhari suspended is welcome because nobody knows where the project will lead Nigeria. I believe any project Nigerians don’t welcome should be put to rest in order to allow peace to reign in Nigeria.
– Gordon Chika Nnorom, +2348062887535
- First published in the Daily Sun of Monday, July 15, 2019.