Nigeria’s high debt

By Aare Afe Babalola

PREVIOUSLY, I extensively considered the unfortunate repeat in the history of slavery – from the days of slavery by Europeans who forcefully carted away Africans abroad, to the recent spate of self-imposed slavery by Africans in Europe and the Americas.

As noted, many Africans consider that by selling themselves out abroad, they will break free from the rat race of poverty into financial freedom. Unfortunately, it is not always so. I rounded off the first edition by considering the recent news of the Ugandan government which obtained a loan from China and is on the brink of forfeiting its only international airport.

Debt slavery

Besides the most common forms of slavery being military slavery and domestic slavery, one subtle and perhaps the most lethal of them all is debt slavery. The peril of debt slavery is not due to the danger it personally poses to the obligor, but its huge effect on those who were not party to the said debt.

Often, the security for the said debt is usually something of shared interest and not necessarily the personal property of the debt obligor and sometimes, even the terms of the debt repayment may not be fully understandable by the obligor.

Debt slavery as a modern-day form of slavery is the most common method of enslavement with an estimated 8.1 million people bonded to labour having pledged their assets or services as security for the repayment of a debt or some other obligation.

The services required to repay the debt may be undefined, and the services’ duration may be undefined, thus allowing the person supposedly owed the debt to demand services indefinitely. Debt bondage can be passed on from generation to generation.

Individuals and institutions who are caught in the web of debt slavery rarely set out with such intent in mind but, oftentimes, realise the entrapment too late in the game.At the initial stage of pleasantries, the euphoria of receiving humongous sums of money, as well as its inherent potential to resolve certain pressing infrastructural and fiscal woes usually obscures any looming danger of non-payment.

Therefore, they hurriedly execute documents either without a full grasp of its implications, or against the misconceived belief that the indebtedness will be fully defrayed and would therefore not result in any negative implications, no matter what documents may be signed.

As we have seen in the case of Uganda, such is not always the situation. Regrettably realising the implication of the agreement which the country executed with the Chinese, albeit too late, the Ugandan Finance Minister reportedly informed the country’s parliament as follows: “I apologise that we shouldn’t have accepted some of the clauses”.

The Managing Director of the Ugandan Civil Aviation Authority equally noted that: “Some 13 clauses were deemed unfriendly and as good as mortgaging the airport and eroding the country’s sovereignty. The most troubling for the aviation bosses was a clause that gave Exim Bank the sole authority to approve withdrawal of funds from the UCAA accounts”.

The Ugandan situation is certainly a clear eye-opener to other African countries, particularly Nigeria, that is neck-deep in foreign indebtedness, including to China.

ALSO READ: Nigeria’s high debt: Invitation to recolonisation and slavery

Nigeria must learn from the following countries: Sri Lanka which forfeited its Hambantota Port to China over a $6bn debt; Malaysia that is being forced to rescind some of its largest national projects due to a $22bn indebtedness to China; the tiny, tourism-dependent country of Maldives which owes $3.1bn to China, and a host of other countries including Pakistan, Kenya, Sudan, and Ethiopia.

Self-imposed slavery

The United Nations High Commissioner for Refugees, UNHCR, which is the agency set up to aid, protect and monitor refugees estimated that the number of people who died or went missing when crossing the Mediterranean in 2018 is 2,275. In 2016, the unfortunate statistics was 3,740, while in 2015, it was 3,771. A commentator once remarked:

“The next time you eat a fish from the Mediterranean, just remember that it may well have eaten a corpse. As the Italian author Aldo Busi told the press just the other day: ‘I don’t buy fish from the Mediterranean any more for fear of eating Libyans, Somalis, Syrians and Iraqis. I’m not a cannibal and so now I stick with farmed fish, or else Atlantic cod”.

Notwithstanding, many remain undeterred of the very apparent risks in seeking greener pastures abroad through the often-unfortunate means of sea crossing. They are determined to reach Europe at all costs, even their lives.

Back in April 2021, it was reported that more than 100 migrants and refugees were feared dead after drowning in a rubber boat which capsized off the coast of Libya while trying to cross to Europe. Aljazeera reported the alarming statistics that since 2014, more than 20,000 migrants have died at sea while trying to reach Europe from Africa.

This then begs the question: despite the number of those who lose their lives in the unfortunate attempt to cross the African shores into the “promised land”, will self-imposed slavery in Europe and the Americas continue to be the remedy of the average Nigerian to the nation’s economic downfall? Why do Nigerians and other Africans risk death to reach the shores of Europe in pursuit of a dream which often turns into a nightmare?

Back to debt slavery, MSN Africa reported that as of December 31, 2019, Nigeria owed $3.18bn to the Exim Bank of China, $76.13m to France’s Agence Francaise Development, $361.75m to Japan International Cooperation Agency, $32.14m to the Exim Bank of India, and $202.27m to Germany’s Kreditanstalt Fur Wiederaufbua.

A total of $106.33m was paid as debt service for bilateral loans in Q1 2021, with China and India receiving $102.2m and $4.13m.The total debt owed to the five countries increased further to $4.25bn as of June 30, 2021, with China having $3.48bn; Japan, $74.77m; France, $482.15m; India, $34.59m; and Germany, $174.39m.

The Nigerian Minister of Finance reportedly noted in October that the Federal Government was uncomfortable with the fact that it exceeded the borrowing threshold in the Fiscal Responsibility Act. She further reportedly noted as follows:

“But we have made sure that we have planned over the next few years that the borrowing is scaled down, and also that we are able to borrow at levels that we can actually repay the debt service obligation”.

It is not only enough for the Federal Government to be uncomfortable about the country’s debt quagmire, but to take proactive measures in ensuring that the nation is totally debt-free within a stipulated timeframe. The statement of the Finance Minister that the country is aiming “to borrow at levels that we can actually repay the debt service obligation” is unfortunately reflective of the fact that the nation is not ready to be debt free.

Conclusion

No doubt, it is high time that African leaders began to make intentional efforts to adopt sound economic policies which will make a dangerous foray by Africans into self-imposed slavery less appealing.

If Africans, and especially Nigerians, are assured of good living conditions or even if they are assured that their governments are trying their best to bring about better standards of living, braving the Sahara, and crossing the Mediterranean in a dingy would definitely become less of an option.

In the coming years, the disastrous interplay between self-imposed slavery and debt profile  must, as a matter of necessity, be quelled if there is to be any hope for Nigeria from being recolonised or being enslaved again.

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