By TIMEYIN EJOOR
A fortnight ago, it was stated in this column that the Federal government is broke and indeed the Nigerian economy is sliding into recession. The ominous signs are beginning to creep in and as usual everyone is looking the other way.

Or worse still, not many are bothered by an economy obviously lacking in direction. We are waiting for the eggheads who constitute the economic management team to come out with a blueprint on the way out of this seeming economic downturn.

Now it is confirmed that the present federal administration is going abroad, cap in hand, seeking for more money to spend. Last week President Goodluck Jonathan sent a letter to the National Assembly seeking approval to borrow eight billion dollars for the completion of projects and ‘for Pipeline Projects’.

Whatever the projects are, the government is keeping a lid on it so that we will not raise any eyebrow. The terms and repayment period are unknown. So we are left to work out the mathematics on our own. Even before securing the National Assembly approval, government officials are already in China to borrow about three billion dollars from that country to complete ‘priority projects’ as it were.

Newspaper reports say the money is to provide infrastructure. We will do well to note that that was the same purpose and intent for which past governments borrowed money from external sources. It is same reason why Greece has become the most indebted and impoverished nation in the European Union today.

It may be uncharitable comparing this administration with some of its predecessors. Try as much as I do, I keep having a throwback to some thirty years ago when like President Jonathan; we had an unprepared head of government in President Shehu Shagari.

Both of them have their background in the academia. One was a secondary school teacher while the other was a university lecturer. Both are products of the same political machinery that has held a stranglehold on the nation since independence; always transforming into one group or the other when a new vista opens for it.

Now my point is this, just as the ruling PDP government has no tangible manifesto other than to say they would better the lives of Nigerians, Second Republic President Shagari and the ruling NPN government had no clear cut direction as well.

All that mattered was to have money to spend and ensure a ‘landslide’ victory at the polls, even when it is clearly the most unpopular party. So the government went borrowing money from various external financial institutions.

In no time, the hen came home to roost and Nigeria found itself in the unenviable list of the world’s most indebted nations. Yet, the NPN government sent Adisa Akinloye, its chairman, to go on a worldwide tour to say all was well with the Nigerian economy.

This was in response to the alarm raised by Chief Obafemi Awolowo of the opposition UPN that with the way the Shagari government was managing the economy and its unrepentant profligacy; it was only a matter of time before the nation would find itself in economic dungeon.

The debt burden became an albatross that hung over the nation. It was said that many foreign investors would not want to have anything with a nation with such huge debt profile.

It took the commitment of former President Obasanjo to negotiate a debt relief for the country when in November 2005 Nigeria secured approval of the Paris Club of creditors for a debt relief of $18b of the total debt of about $37b after the nation made huge cash payment of $12b.

Credit must go to the Centre for Global Development, a non partisan research institution based in Washington which helped to reclassify Nigeria’s debt profile and eventual analysis led to the debt relief program.

Today, the euphoria of prosperous economic future that greeted the debt relief has evaporated. All the expectations of the economy having a better footing have become a mirage. But more worrisome is the decision of this administration to embark on a new regime of external borrowing.

This will increase the external debt profile of the country to $21.5billion. This is aside domestic debt which currently stands at $28billion. No mention has been made by government on how it would generate funds for repayment and interests as well as the likelihood of huge figures in penalties and late fees.

Let us hope and pray that Nigeria does not become another Greece. Over the last decade, that country began accumulating foreign debt that eventually came to a head in 2009.

That year, the government of George Papandreou, which had just won elections discovered, to its chagrin, that the previous administration had falsified budget figures and concealed huge foreign debts. This sparked an economic crisis from which the country is yet to recover.

Only last week, the euro zone, in a dilemma of what to do with one of its backwater countries, had to cough out another $110billion in bailout funds to avoid a collapse of the Greek economy.

Our own DMO say in one breath it is alright for the government to continue to borrow as long as it remains less than 20 per cent of GDP. In another breath it says it would take the country another 13 years for the country to continue to service the debts.

If this translates into a moratorium, it means the repayment has been placed on the shoulders of subsequent administrations long after the Jonathan regime which sought and spent the money would have long been thrust into the dustbin of history.

My suggestion is for the government not to take the easy way out of its predicament. Rather they should look inwards on ways to generate more revenue without direct negative impact on the lives of the people as well as plug the several leakages in the system.

For example, thereportedly daily loss of over 150,000 barrels of crude oil to unknown persons is a huge loss that the government can do without. With the current benchmark of 90 dollars per barrel of oil that translates into $4.9billion per annum.

The government should also look into improving revenue from federal taxes which accounts for a minimal figure in the revenue estimates annually.