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Who will save Nigeria from imminent debt bondage?

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Big trouble, as more Nigerians sink deeper into poverty
A map of Nigeria

By Dele Sobowale

Nigeria’s debt service to revenue ratio is unsustainable – NESG;  Sunday Telegraph, August 23, 2020, p, 15.

A visitor from another planet, versed in economics, on arriving in Nigeria and reading our newspapers must wonder if there are intelligent people governing us. Future historians might not be too wrong if they assume or conclude that in 2020 Nigeria still lived in the Dark Age. Everything – CAMA 2020, Magu Probe, P&ID’s $9.68billion judgment, bandits etc – touched by the administration has turned to dust.

Just as it is difficult to pin-point which of them will ruin us first, it is certain that the debt burden we are asked to bear is a prime candidate for the first major harbinger of disaster. History, bad history, might be about to repeat itself. Nigeria is gradually moving towards the brink of debt default once again.

The first occurred in 1984/85 when Buhari was the Military Head of State. It occurred at the same time we were in our first recession ever. We experienced the second recession in 2016 and the third is now quietly underway.

“It is the buyer’s fault if he fails to ask if the horse is blind.” – Vanguard’s Book of Quotations, VBQ, p. 24.

READ ALSO:Enugu Airport: Buhari deserves praises- Orji Uzo Kalu

Nigerians, including me, have no reason to blame Buhari for our woes. Twice, in 2015 and 2019, we overwhelmingly elected a candidate who presented to us no comprehensive economic programme. In 2015, we fell for the meaningless election campaign slogan –  Change. It never occurred to us that it could be a change for the worse.

For 2019, the campaign gimmick was  Next Level. Again, most Nigerians, apparently, could not remember that in a multiple storey building, the next level could actually be down. But, as good old Abraham Lincoln, 1809-1865, had said “You can fool some of the people all the time; you can fool all the people some of the time; but, you can’t fool all the people all the time.” (VBQ p 62).

As far back as 2019, I warned Nigerians about the  Next Level  and the false promise of hope it implied.

Next Level is pure anarchy

“The Katsina State Government has cancelled all activities lined up for the inauguration ceremony of the new administration in the state.”  –  Punch, May 24, 2019, p. 2.

The government gave its reasons. “The decision on a low-key celebration was taken following the unfortunate incessant attacks by bandits in some areas of the state which led to the death of many people and left several others injured or homeless.”

Katsina, it needs to be repeated, is Buhari’s own state. Unless charity no longer begins at home, we have the scary scenario of a leader who cannot defend his own home assuring the rest of us of our safety. Anarchy is here.

When Buhari was sworn in on May 29, 2019 for his second term (which cannot end soon enough for me) his state would have been on record for posterity as the first state to succumb to the dictates of hoodlums – now called bandits.

When, a few weeks ago, the article, “From Begging to Banditry: Revolt of the Almajirai”,  was published, a lot of things were deliberately omitted from the facts presented in order not to frighten too many Fellow Nigerians.

Today, the National Assembly, NASS, which the President and the Vice President had expected will rubber stamp all loan requests without asking questions is resisting the imminent push of Nigeria into a serious debt trap.

If anybody in this country still needs a reason for calling on Buhari and Osinbajo to stop their economic policy and dangerous management, the Nigerian Economic Summit Group, NESG, provided some of the evidence needed. But, before examining the facts, permit me to introduce the NESG. I attended the Summit unfailingly for the first eight years.

The NESG was the brain-child of Chief Ernest Shonekan, GCFR, Nigeria’s Head of Interim National Government, HING, for a few weeks in 1993. Prior to that Shonekan had been installed as civilian head of government services while Babangida was military President. Shonekan was the Chairman/Managing Director, UAC of Nigeria, UACN, when the company was the largest Nigerian company with over 30 divisions. When Shonekan spoke, governments, even military juntas, listened.

As the top civilian in government in 1992, he organised the first NESG which brought together the leaders of the Organised Private Sector, Banks, Insurance, Federal Ministries, Agencies, Labour etc. The objective was to get all sectors of the economy to work together to promote economic growth and development. The annual summit was the forum and the first was in 1992.

Don’t blame NESG if Nigeria has failed to grow as envisaged for 28 years since it was established as a Think Tank advising government. The patriotic and hardworking group of very sound economic and financial technocrats had been preaching to Nigerian governments with ears plugged.

NESG, despite its decline to a “billionaires’ club”, might as well have been talking to mules. Apart from a brief period with IBB and Shonekan, NESG has been trying in vain to steer Nigerian governments – Abacha, Abdulsalami, Obasanjo, Yar’Adua, Jonathan and now Buhari — in the right direction. None of the former governments had fielded a weaker Economic Management Team than we have had since 2015. And no leader has demonstrated the lack of capacity to understand basic economic issues as we have now. That explains why the only answer to fiscal deficit is borrowing.

The reader can imagine a situation in which a doctor prescribes the same treatment for every complaint. Nigeria is now, predictably, running into a debt trap with the possibility of default starring us in the face as in 1984/5. This is how the NESG explained the situation in which we now find ourselves: “The importance of dealing with the challenge of inadequate revenue is highlighted by the very high debt service-to-revenue ratio.

“While this ratio has improved to 72 per cent in May from 99 per cent recorded at the end of March 2020, it remains unsustainably high and undermines the ability of government to meet its non-debt obligations such as provision of infrastructure, human capital development and protecting our nation’s large population of vulnerable people.

“Limited revenues only entrench the government’s dependence on borrowing from the Central Bank of Nigeria with adverse consequences for our economy.”

I could not have summarised the threat to the economy better. The only thing to add to the aptly written warning of the NESG is that when, for six years, the actual revenue falls consistently short of the budgeted revenue, the tendency to engage in panic loan seeking increases. That is what has happened since 2015.

Common sense dictates that when an economic unit persistently falls short of its revenue estimates, it must either boost revenue or reduce expenditure drastically. That is the “cut-your-coat-according-to-your-cloth” policy. Nigeria’s case is made worse when “Know-Nothings” speak for government. The Vice President’s defender in his ridiculous rejoinder mentioned Lee Kuan Yew of Singapore to explain why it is acceptable to have economic illiterates running our economy.

Yew, in a BBC News interview, disclosed that he read over 40 books on economics and attended 12 top level seminars on various economic developments before making his decisions. Yew would never have contemplated spending N56.4 billion to create 774,000 bogus jobs that would last only three months!!! That can only happen in Nigeria.

Next Week: VP/EMT delivers predictable recession on schedule.

Vanguard

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