NIGERIA AS A PROFLIGATE DEBTOR

Borrowing is a universal phenomenon. It happens because the resources of the earth are not evenly distributed, neither is the capacity of individuals and nations the same. Some are rich and some are poor. Needs also vary. The richest may also need to borrow to meet exigencies that his extant resources are insufficient for and so, he borrows in the interim to meet the shortfall. One underlying principle in borrowing is that what is borrowed must be repaid under agreed terms. These terms, including timescales, can only be varied with the lender’s concurrence and not through threats by the borrower.

A lender has a stake in the success of his debtor because such success enhances the chances of repayment. It is therefore incumbent on the lender to watch closely the lifestyle and business performance of his debtor and to ensure that the funds borrowed are not deployed to purposes different from the agreed objective. An agricultural loan deployed by a borrower to marry a new wife is obviously unlikely to be repaid as the marriage would not yield the crops whose sales proceeds would aid repayment. A sincere borrower therefore meticulously deploys such borrowed funds towards a project that would yield enough profits to enable him to repay both principal and interest as well as make a profit for himself. Such a borrower also strives to live within his means without displaying unnecessary ostentation while the loan is yet to be repaid or when the need for further loans is imminent.

Nigeria was known for being very generous with her resources when the going was good. At the time the country was awash with petrodollars, did our head of state not pay the salaries of public servant sofa Caribbean country that was in financial distress? Did the same head of state who fought a 30-month civil war without borrowing not also say that Nigeria’s problem was not money but how to spend it? At the time we ran into debts starting from the Shagari era till Obasanjo’s second coming, at least Nigeria lived moderately as expected of the massive debtor that she was. Before then, as head of state, OBJ had, on realizing that Nigeria was not as wealthy as she used to be, instituted what he termed “low profile”. He cut down on wasteful spending and promulgated a policy on government vehicles making the Peugeot 504 the highest car government officials could use as an official vehicle. General Murtala Mohammed’s official vehicle was a Mercedes Benz in which he was shot by Buka Suka Dimka. General Obasanjo followed his new policy by using the same Peugeot 504 that other public officers used as head of state! This was before he handed over to President Shehu Shagari.

The massive display of opulence by public officials started during the quasi-miliary-civilian experimentation under General Ibrahim Badamasi Babangida popularly called IBB. I recall clearly that the very first elected state government official to buy and use an SUV as an official car was Edo State Governor who coined the sobrique “The Heartbeat of the Nation”. I still recall reading in a national newspaper how other governors of that era gathered to admire the car at a meeting at the State House. The craze caught on and has never ceased ever since. Prado is now considered too cheap for public officials and the latest Land Cruisers and Lexus are the official vehicles in vogue.

The current government came into office at a time when Nigeria had used the previous eight years for unbridled borrowing with a worse-thanrubber-stamp parliament that appeared to feel uneasy whenever a loan request was not under consideration. The speed with which loan approvals were given to the Executive gave the impression that loan processing was the primary objective of the National Assembly. Every new approval given appeared to increase the Senate President’s ranking so much so that he was eventually announced as the consensus presidential candidate of the ruling party before Jagaban and the El Rufai collective put sand in his garri.

Nigeria’s debt profile, according to the debt management office, was approximately 12.12 trillion naira as of June 2015 when the last government effectively took over from GEJ. By the time PMB’s government was handing over, it was projected by the DG of the Debt Management Office that the country’s debt would be 77 trillion naira, a whopping 535% increase. The current regime came into office with a suffocating debt albatross. One will therefore expect the elected and appointed officials, as well as the bureaucracy, to take this sobering state of affairs into consideration in the way they carry on. Nigeria cannot afford to annoy the lenders else they refuse likely requests for rescheduling and the inevitable loan requests in the near future. But the optics right now do not indicate that our public officials are conscious of this.

A key indication that the borrower is living above his means is the 70 billion naira allocated for the purchase of SUVs for members of the National Assembly and the eventual purchase of state-of-the-art SUVs at a whopping 170 million naira SUVs for each member. Just imagine if that money was deployed to a productive venture that would generate jobs or provide cheap food for the people! Those cars would be changed in the next four years! What if our government changes the write-off period to five years instead of four in the light of our current economic dire straits? There is the issue of insurance practice but that is a different matter entirely. Are some people not using cars that are seven years or even ten years old in their fleet? And must a government official use an SUV? What if you use an Innoson brand or Chinese SUV, if you must, especially the made in Lagos GAC brand? After all, you cannot use Chinese loans for everything else, get the Chinese to build your infrastructure but consider their locally assembled value-adding branded SUVs as inferior. Zambian President has changed this silly craze for highvalue cars for official use and heaven has not fallen. Here, does Governor Oti of Abia not titillate in his beautiful Innoson SUV official car?

The 45-member cabinet the first Federal Executive Council is unwieldy at a time when the country is struggling financially. Add to this the number of official aides and hangers-on appointed by governments at various levels and a lender would be aghast and start thinking he has lent money to the wrong borrower. At the time General Obasanjo decreed low profile during his military incarnation in the seventies, it was due to a realization that wastefulness would hurt the country in the long run and that the profligate days of unlimited petro-dollar inflows were numbered. The GEJ administration saw the need to cut the cost of governance and set up the Stephen Oronsaye Presidential Committee on Restructuring and Rationalisation of Federal Government Parastatals, Commissions and Agencies. The objective was to achieve a reduction in the cost of governance through possible mergers of MDAs and other parastatals of government, many of which had similar mandates. The committee submitted a report with far-reaching recommendations.

To demonstrate that it was serious to implement it, government set up another committee to write a “White Paper” on the report and that too was done. Reading through that white paper, you will shudder to see how many of the meaningful costreduction recommendations were “rejected” and many more merely “noted”! The government that took over in 2015 had neither the guts, cost-saving objective nor the altruistic bent to do the needful. The report has not seen the light of day and Oronsaye’s travails may have been engineered by powerful interests whose lucrative watering holes were recommended for merger or scraping. A topheavy government is the antithesis of the Oronsaye mindset. It is gratifying that the present government has the gumption to keep politics aside and take the bull by the horns and implement that report at long last. Patriot Oronsaye, the man who saw today many years back, may yet have the last laugh. A fitting tribute to his doggedness and patriotism would be his engagement to midwife the delivery of this fresh attempt at a lean government.

In the first article I wrote on social media on this subject, I stated as follows:

“The mobilization to attack Niger Republic in order to dislodge the Tijiani junta that kicked out President Bazoum on July 26 2023, looks like another costly gamble in the making. It has the hand of Nigeria but the voice of ECOWAS (CEDEAO in French). Pray, who is ECOWAS without the Nigerian muscle and economy. This is not to underrate the other countries which, as sovereign entities, have the same vote in the community of fifteen members.

Now, with Mali, Guinea, Burkina Faso and Niger out of the equation, ECOWAS is left with eleven members. Of these, I am wondering about the level of financial support and military contribution expected from the Gambia, Togo, Cape Verde, Benin Republic, Liberia and Sierra Leone. Even the Ghanaian economy is in an Akufo-ic comma at the moment. It therefore means our oil subsidy removal savings could be directed towards fighting Macron’s war in Niger. I wonder how our lenders would see such (mis)adventure.”

AUSTIN ISIKHUEMEN argues the need to trim the cost of governance