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 ireational borrowing patterns? Did the Nigerian
Customs Service not told us that in 2019 alone, it raked in N341
Trillion as revenues? Did the Federal Inland Revenue Services not
claiming to raking in billions from taxes? Where are these 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.com; www.emmanuelonwubikocom;
www.thenigerianinsidernews.com [1]; www.huriwa@blospot.com
Links:
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[1] http://www.thenigerianinsidernews.com/