Everywhere else in the world, leadership is about the people and the future. It is about satisfying the needs of today and planning for the future, believing that the gains of tomorrow derive from the painstaking efforts and sacrifice of today. But that is not the story in Nigeria.
Nigeria is a country where leadership is about self; about family, cronies and stooges. It is about us against them, and this ‘them’ includes the unborn children and their future. The country is one where leaders willfully and mindlessly mortgage the future of generations yet unborn.
With borrowing spree of the current government, which has left the country’s debt profile (domestic and external) at N32.9 trillion, it means the people and their future are being mortgaged.
When every single project of government is funded by borrowed money, it is not hard to see that the country lives in perpetual debt that current leaders will leave behind for generations unborn.
A few days ago, the government was talking about borrowing $1.5 billion from Chinese government. Today, Nigerians are aghast with the decision of the government to splurge exactly that same amount in the repair of the Port Harcourt Refinery which, in the opinion of many, is no better than a scarecrow in a village farmland.
Perhaps, Nigerians would not have been as miffed as they are if they saw good reason to believe the government in its intentions for the refinery.
But when government decides to stagger the repair into three phases with the first phase taking 22 months, the second, 24 months and the third, 44 months, they are quick to see a government that is hoodwinking its people.
Phasing the repair of the refinery means it will outlive the current administration which has less than one year of effective governance before campaigns for 2023 elections set in.
And in a country where government is not a continuum, this money will only go into private pockets and the refinery remains what it is—an empty, disused national monument.
This contrasts significantly with what the late Lee Kuan Yew of Singapore did in his country. Kuan Yew came to power with a determination to lift his country from the ashes of socio-economic and political hopelessness by halting the wrong leadership style in the country.
Here, leaders have remained short-sighted in service of community. There are fears that the adage, “the fathers have eaten sour grapes, and the children’s teeth are set on edge,” will manifest in Nigeria many years to come, given the leadership ineptitude of today.
Over the years, Nigerian leaders have not fared well in the area of dispensing quality leadership by way of planning and saving for the rainy day.
In his interview with Channels Television a few days ago, Chibuike Amaechi, minister of Transportation, said Nigeria had borrowed $2.5bn from China Exim Bank for the Lagos-Ibadan railway.
In that interview also, Amaechi said he begged Niger Republic to let Nigeria construct free railway for them.
In the last five years, the Nigerian federal lawmakers have controversially approved large amounts of money to the government as loans for infrastructural projects.
For example, in March last year, the Senate approved $22.7billion for infrastructural development; the approval came after a heated argument among the lawmakers.
Several lawmakers especially from the main opposition People’s Democratic Party (PDP) had kicked against the borrowing; they had also wanted a thorough debate on every item of the request.
The Minority Leader, Enyinnaya Abaribe (PDP-Abia) led the opposing team of senators.
A month later, in April, the Senate also approved President Buhari’s 850 billion naira ($2.36 billion) loan request.
President Buhari had said he needed to raise the loan from the domestic capital market in order to adequately finance projects in the 2020 budget.
Similarly, two months later in June 2020, the Senate also approved President Buhari’s $5.513 (Five Billion, Five Hundred and Thirteen Million United States Dollars) external borrowing request.
The Buhari administration has also been accused of obtaining overdrafts and loans from the Central Bank of Nigeria (CBN).
The borrowing spree of the Buhari government has left a huge debt profile and there is the perception that the future of the country and young population is being mortgaged.
Civil society groups and the major political parties in the country have consistently 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.
Last month, the Socio-Economic Rights and Accountability Project (SERAP) urged President Buhari to provide spending details of the overdrafts and loans obtained from the CBN by the Federal Government since May 2015.
SERAP had said the details should include the total overdrafts, the projects on which the overdrafts have been spent, repayment of all overdrafts to date, as well as clarity on whether the $25bn (N9.7trn) overdraft reportedly obtained from the CBN is within the five-percent limit of the actual revenue of the government for 2020.
According to SERAP, “The increasing level of public debt would threaten the ability of the government to invest in essential public goods and services, such as quality education, healthcare, and clean water. It is the primary responsibility of the government to ensure public access to these services in order to lift millions of Nigerians out of poverty and to achieve the Sustainable Development Goals by 2030.”
Pro-Democracy and leading civil rights advocacy group; Human Rights Writers Association of Nigeria (HURIWA) has consistently condemned the excessive borrowing of the Buhari’s government, while asking what the government has done with the loans from internal and external sources since 2015 when it assumed office.
The major concern to many Nigerians is that while Nigeria’s debt profile is increasing by the day, quality of life is depreciating.
Things are so bad in the country that most staple foods have gone beyond the affordability of many Nigerians. People are just struggling to live.
Recall that in June last year, Atiku Abubakar, a former vice president of Nigeria, had warned that Nigeria’s increasing debt profile, which stood at 99 percent of the nation’s revenue profile in the first quarter of 2020, would drive the country towards economic precipices.
He lamented that “We are not just robbing Peter to pay Paul, but robbing our children to pay for our greed.”
He had called on the Federal Government to take immediate steps to reduce its expenditure, especially those on wasteful projects such as the maintenance of the Presidential Air Fleet, unnecessary renovations of public buildings, the maintenance of limousine fleet for top government officials, overseas medical travels and the ₦4.6 billion Presidential Villa maintenance budget etc.
“Nothing has shocked me in my entire life in public service as the revelation from Nigeria’s First Quarter 2020 financial reports in the Medium Term Expenditure Framework and Fiscal Strategy from the Federal Ministry of Finance, Budget, and National Planning, which shows, alarmingly, that whereas Nigeria spent a total sum of ₦943.12 billion in debt servicing, the Federal Government’s retained revenue for the same period were only ₦950.56 billion.
“This means that Nigeria’s debt to revenue ratio is now 99 percent. This is a crisis! Debt servicing does not equate to debt repayment. The reality is that Nigeria is paying only the minimum payment to cover our interest charges. The principal remains untouched and is possibly growing,” he noted.
Abubakar, who was also the People’s Democratic Party (PDP) presidential candidate in 2019 elections, had also in his editorial opinion on December 17, 2019, titled ‘Endless Borrowing Will Lead Nigeria to Endless Sorrowing,’ counseled the Federal Government to desist from indiscriminate borrowing and suggested ways to increase revenue and reduce expenditure.
“Nigeria must sell those planes and channel the revenue to other vital areas of need, while taking additional steps to reduce the cost of running our government,” Abubakar said.
Other informed Nigerians have also sounded the warning that Nigerian government may be taking a dangerous step by its penchant for wanton borrowing that is not matched with the nation’s development.
They also deplored the “big brother” posturing of Nigeria, leading to begging another country to be allowed to use borrowed money to construct free railway for such a country.
While appearing before the Senate Committee on Local and Foreign Debts in November 2020, Zainab Ahmed, minister of Finance, Budget and National Planning, warned that Nigeria’s total public debt may hit N38.68 trillion by December 2021 based on existing approval, which she was privy to.
Of course, her comments came amidst growing concerns over Nigeria’s debt stock, as the country then, planned to fund the 2021 budget deficit with N4.28 trillion new borrowings; about one-third of the proposed budget.
Also, in February this year, the International Monetary Fund (IMF) warned against the plan by the Nigerian government to convert $25 billion CBN financing to 30-year debt.
According to the IMF, the financing is costly for the Federal Government at interest rates of the monetary policy rate plus 300 basis points, and for the CBN, with sterilisation done through issuance of open market operation bills.
Apart from the minister and the IMF, some notable Nigerian economists have been worried that the country’s debt stock has risen by over 158 percent in the last five years.
The bigger concern for them is the fact that there is nothing to show for the huge debt. As one aggrieved economist said, “Government is borrowing money and sharing it among its personnel”.
According to Beltus Onwuchuluba, an economist and researcher, debts make sense and give hope of repayment when they are judiciously used in executing infrastructure needs and developmental projects that create jobs, better the lives of people and give citizens reasons to be proud of their country.
“With more borrowing and nothing to show for it, we are mortgaging the future of this country. There should be evidence of what previous loans have achieved before approving more loans,” he said.
Citing Rwanda as an example of where debts are judiciously used, Eugene Omale, economics lecturer at Benue State University, Makurdi, noted that the world is seeing what Paul Kagame, president of Rwanda, is doing with the loans and his people are feeling the positive impact.
“Loans are not obtained for non-viable ventures because of the need for servicing and repayment. If you borrow money and use it to establish viable projects, you are sure of repayment from the returns on the investment.
But, it seems the government obtains loans for projects in the air, and forget meeting all the conditions needed to actualise the purpose of the loan,” he said.
He argued that Nigeria has been borrowing from domestic and foreign lenders since 1960, but nothing to show for the huge debt left behind.
“If Nigeria borrows to fix her power sector, or to build new refineries that will save her from importation of refined products, nobody will complain. But there is no electricity, no security, no refineries and yet the debts are rising. So, what is Nigeria doing with the money she keeps borrowing?” he asked.
Sadly, there are scores of abandoned projects across the country, which were financed by the loans, but allowed to rot away due to political, ethnic, and other reasons.
Onwuchuluba thinks that government should revisit its borrowing style, cut its appetite for loans, cut on its expenditure and also lead by example for others to follow.
Both economists are scared that China is beginning to take over certain sectors of some countries that have defaulted in repaying their loans, and Nigeria is heavily borrowing from China and may fall victim very soon.
Despite public outcry however, President Buhari has consistently justified the reason for the borrowing, saying that his administration must fund projects with aid of foreign loans.
Speaking during a meeting with members of the Presidential Economic Advisory Council (PEAC) some months back, Buhari had said: “We have so many challenges with infrastructure. We just have to take loans to do roads, rail and power, so that investors will find us attractive and come here to put their money.”
Jonathan Are, a public affairs analyst, questioned the sincerity of the Federal Government, saying that loans gotten by the Buhari administration in several instances do not commensurate with the projects on ground.
“It is worrisome to see some loans tied to capital projects having little or nothing to show for them while some cannot be traced to any executed or current projects. For instance, the $300 million Diaspora bond issued on March 29, 2017, was not tied to a specific project, though the government suggested that the loan was for capital projects in priority sectors. Which capital projects?
“Even when a loan is traced to a specific project, we often see at the completion of the project that the volume of the loans obtained does not commensurate with the money gotten,” Are said.
