No to escalating Nigeria’s debt profile

As a result of our inability to cultivate financial discipline and prudent management of the economy, we have come to depend largely on internal and external borrowing to execute government projects with attendant domestic pressure and soaring external debts, thus aggravating the propensity of the outgoing civilian administration to mismanage our financial resources.

Nigeria was already been condemned with the twin problem of heavy budget deficits and weak balance of payments position, despite the prospect of building a virile and viable economy. However, in the case of Nigeria, the debt impact is aggravated by mismanagement. We believe the appropriate government agencies have good advice but the leadership disregarded their advice.

The situation could have been avoided if our legislators are alive to their constitutional responsibilities; as instead, the legislators are preoccupied with determining their salary scales, fringe benefits and unnecessary foreign travels, et al, which takes no account of the state of the economy and the welfare of the people they represent.

Nigeria’s debt has almost doubled since Buhari took over. Two months before Buhari took office on 29 May, the country owed a total of N12 trillion. At the end of June 2015, the country’s debt had risen slightly to N12.1 trillion. By the end of June 2018, total public debt had almost doubled to N22.4 trillion. Going by this frightening figures released by the Debt Management Office, the total debt stock stood at some humongous N24.047tn as of March 31, 2019. As it is now the debt has risen to N25 trillion (US$80 billion).

The recent request by President Buhari to the National Assembly to approve $30 billion of foreign borrowings, after a similar request three years ago was rejected, is scaring and Nigerians on the streets do not want it. Because poor Nigerians are worried over the country’s ever escalating debt profile. This scary economic situation throws up some salient questions, all begging for answers. Nigeria is using 50% of its revenue to service its debts! This is unsustainable. But this is just part of an economic malaise that has consigned millions of Nigerians to “multidimensional poverty” even as a few favoured ones continue to enjoy the nation’s wealth.

Surely Nigeria does not need comprehensive mathematics to understand that the country’s economic growth is undermined by the huge debt stock as well as other obvious factors including sheer profligacy in running government. But, the situation has only worsened over the years. Recall that in June 2017, experts, Prof. Pat Utomi and Mr. Bismarck Rewane, had expressed similar worry over the increasing debt burden at both the state and federal levels.

What is really surprising Nigerians is whether our lawmakers understand the gravity of their actions in causing more hardship because contemplating an increase in VAT rate now is bad timing and inconsistent with current economic reality: VAT increase will lead to higher inflation, interest rate hike, and more unemployment and generally make people poorer.

One’s current concern, however, is who will pay these huge debts? Will the burden being left by the reckless and frivolous political class not be too weighty for the lean shoulders of our jobless children? Will they not be turned to slaves and beggars in their own country by the creditor nations, just because they want to pay off the debts left by the locusts that have ravaged our common patrimony?

But that is not all. One is surprised too about the speed with which governors go for questionable bonds at the end of their tenures. What is the guarantee that the incoming administrations and the subsequent ones would have the capacity to repay without harming the security and welfare of the citizens which are their primary reasons of being in government?

The earlier we start having credible answers to these burning questions, the better for us all.

Abba Dukawa can be reach at abbahydukawa@gmail.com