Nigeria’s curious case of rising debt profile amid worsening poverty
Since 2015 when the Muhammadu Buhari administration came to power, Nigeria’s debt stock has been on the upward trajectory. Within this period, however, Nigeria has won the unenviable trophy as the world poverty capital. Every index of human development has been negative for the country.
Today, with the naira exchanging for over 560 for a dollar, many Nigerians are unable to feed themselves; access good healthcare; access portable water, pay their house rent, send their children to school or do other legitimate things as in a normal society.
Life has become so difficult that many citizens are relocating abroad, with some renouncing their citizenship.
Today in Nigeria, medical doctors who had graduated for many years are writing application and filing out to be interviewed by the Saudi Arabian authorities recruiting Nigerian medical personnel.
A lady who lamented the development in a viral video on the social media said she was shocked to the point of giving up on Nigeria when she met a lecturer that taught her over many years ago, seeking the Saudi Arabia job.
This is the sad story of Nigeria as Buhari sent a letter to the National Assembly seeking approval for another batch of humongous loans.
Last week, Buhari sought the approval of the National Assembly for external loans in the sum of $4,054,476,863.00, plus Euro €710m and grant component of $125m.
The loan request has been condemned across the country including leaders of the ruling All Progressives Congress (APC) and some federal lawmakers.
The new loan request followed last April’s approval of external loans of $1.5 billion and €995 million for the Federal Government.
Since assuming office in 2015 the borrowing profile of the Buhari’s administration has become increasingly worrisome to Nigerians.
Never in the economic history has Nigeria been so intoxicated by debt and borrowing not even during the military regimes.
In the last five years, the Nigerian federal lawmakers have controversially approved large amounts of money to the government as loans for infrastructural projects and for other purposes.
Meanwhile, observers say that the state of infrastructures and rising poverty among Nigerians are in sharp contrast to the huge borrowing of the Buhari’s administration.
Civil society organisations across the country have equally spoken against President Buhari’s penchant for borrowing.
Questions have been asked about the prudent management of such funds, while the citing of infrastructural projects executed in recent times has been said to be lopsided and in favour of a section of the country.
Borrowing for consumption dangerous – Obi
Speaking recently on Nigeria’s worrisome borrowing and its impact on Nigerians, Peter Obi, a former governor of Anambra State, said that Nigerians were becoming poorer, while the economy was stagnating because the current administration was borrowing for the wrong reasons.
The former governor said developing countries across the world borrow money to execute policies, noting that Nigeria was rather borrowing money for consumption than production which would have a direct impact on the lives of citizens.
“Are you borrowing for productivity or are you borrowing for consumption? My worry here is that we are borrowing for consumption.
“I am saying that the country is not productive and there is nothing wrong in borrowing; if you are borrowing, then it shouldn’t be for consumption and that’s why more and more people are getting poorer,” ObI said.
Chairman of the Senate Committee on Army, Ali Ndume, equally raised concerns about the new loan request by President Buhari, saying that the loan should be properly subjected to scrutiny.
The APC chieftain argued that a robust debate on the propriety of a new loan would address the concerns of Nigerians, who have since perceived the Senate as an appendage of the executive arm.
Similarly the main opposition, the People’s Democratic Party (PDP), said that with the new loan request, and the alarming N35 trillion debt, President Buhari had allegedly mortgaged the future of Nigeria.
But the President said the loan when granted would stimulate the economy and create jobs. He said the funds were meant for projects geared toward the realisation of Nigeria’s economy sustainability plan that cut across key sectors such as infrastructure, health, agriculture, food security, energy, and covid-19 among others.
Reacting also, a former Minister of Transportation and chieftain of the PDP, Ebenezer Babatope warned President Buhari to be careful with his borrowing because of the poor state of the economy and increasing poverty among Nigerians.
“Every government can borrow, if he is borrowing to run the country fine, but he should not borrow to add to the suffering of Nigerians. Nigerians are already suffering too much,” he said.
Also commenting, analyst and former publicity secretary of the Action Democratic Party (ADP), Adelaja Adeoye urged the National Assembly to turn down Buhari’s request, as it would further plug Nigeria into a difficult financial position.
According to him, “I want to encourage the National Assembly to turn down the fresh loan request from President Buhari, because it will further put Nigeria into financial danger, as the 98% Debt Service-to-Revenue ratio portend grave danger for the country.
“The existing loans are already putting massive pressure on the Economy, as our earnings to new loan ratio will lead to more budget deficit year in year out. Looking at the current public debt stock, you would realize that it is unsustainable despite the fact that our debt-to-Gross Domestic Product (GDP) ratio at 35% seems comfortable, but that is not the deal.
“National Assembly should look at the economic index and indices and heed experts’ advice, so that the country is not further plunged into generational debts.”
Speaking further, Adelaja however, seeks a review of the performance of all the loans pre and from 2015 since this administration came into power.
“What we need to do as a country is to assess the performance of all the loans pre and from 2015 since this administration came into power, let us look at their uses and performance, how it is impacting on an average citizen, and also determine if we have capacity to repay them and what year would they be liquidated and be free.
“Let us hope that one day, we won’t have to pay back these loans with our sovereignty, because the oil economy is becoming out of fashion around the world, with newer technologies, which is making the use of oil obsolete. Our major source of revenue is the oil economy.
“In my opinion, Buhari’s fresh loan request, in a letter to the National Assembly seeking the legislature’s approval of $4.179 billion ($4.054 billion and $125 million) and £710 million external loans should be halted”.
‘Everything has got worse’
In an exclusive interview with BusinessDay Sunday, Martin Onovo, a former presidential candidate of the National Conscience Party (NCP), said that the current administration has performed abysmally and has proven to be worst since 1999.
“If you use this insecurity everybody is talking about, as at the day Buhari took over power, Nigeria was number 4 on the world terrorism index, today Nigeria is number 3. So, it has got worse. If you look at the poverty data as at the day Buhari took over power, you would see that we were not the global capital of extreme poverty, but with Buhari we became the global capital of extreme poverty. If you look at our transparent international corruption perception index reading, as at the day Buhari took over, I think we were 136th, today we are 149th; so, corruption has become worse. So, everything got worse. If you look at the economy, it is the same data, forget the 5percent they are reporting, it is false; because today Naira is N550 to a dollar, and still climbing. When Buhari took over it was 197.
“Today, your total national debt is nearly 40 trillion naira and you are going to borrow more now; the request is before the Senate, but when he took over it was 12.1trillion naira. So, nothing can be more catastrophic than the kind of democracy we think we are practising now. This regime is the worst since the creation of Adam that has failed in all counts. It failed in national unity; the economy, security, anti-corruption, democracy; it failed in the rule of law, in the integrity of the ballot and everywhere. The indices are clear. I am using government indices. The figures I am giving you are from Debt Management Office; they are there on their web site,” Onovo said.
“So, I am using government data. I am not a member of the board of global terrorism index; I am not a member of the board of world poverty clock,” he further said.
Let my people go – Ighodalo
Recently, Ituah Ighodalo, senior pastor, The Trinity House Church, had lamented the precarious state of Nigeria and the style of leadership by political office holders.
He said: “We know the people that are holding this country by the jugular and I don’t think there are up to a thousand of them, but we need to go to each of them and speak to them to ‘let my people go’. All the gatekeepers of Nigeria holding on to the resources of this country not doing the things they should do; what they are expected to do.”
On the excessive borrowing amid numerous resources in the country, the cleric said: “Why do we have a law in Nigeria in 2021 that does not allow us develop our national resources, and they say the thing belong to the Federal Government. Why are we wasting each other’s time? There are all sorts or natural resources in the ground but the FG won’t change the laws. There’s more than enough to make Nigeria great. People are making gain with Anchor Borrowers scheme, even the vaccination; why are we doing this? We need to tell them and not just talking generally.”