Democracy is, indeed, “the worst form of government except for all the others”. If the current regime in Nigeria were a military one, some jackboots would have simply agreed to borrow $30billion during a Federal Executive Council, and that’s all. That’s how destructive military regimes accumulated over $30billion within 16 years until 2000.
To borrow $30billion to finance projects from now to 2018, however, President Muhammadu Buhari is seeking permission from the legislature. The Senate and the House of Representatives may not have the most patriotic Nigerians, but I’m sure the loan request won’t sail smoothly in either chamber. At least they will have to be convinced that there’s no alternative to borrowing.
It’s now clear that Nigeria is broke, and, for a long time to come, the majority of Nigerians would have a foretaste of hell on earth. Already 50% of the population is living in extreme poverty. In 10 years the figure may hit 90% as more and more jobs vanish. Borrowing can only provide temporary relief; $30billion (N10trillion) won’t lift Nigeria out of recession.
Are our leaders bereft of ideas? Or do they simply want to mortgage the future of generations yet to come? In 2006, Nigeria paid $18billion to the Paris Club of creditors in order to obtain “forgiveness” for its debt of $30billion. Ten years later, the same country wants to borrow $30billion from international creditors. That is apart from no less than $15billion owed already, and which is serviced with $2billion yearly. Local creditors (including shylock banks and phantom contractors) are owed at least $50billion.
Since the coming of this government 17 months ago, it’s been all motion but no movement – hot air filled with unredeemable promises. Finance minister Kemi Adeosun and President Buhari have always said that they want to borrow to finance capital projects. But they have not told the whole truth: like the predecessor government, this one has been borrowing to pay salaries; it made provision for $2.2billion loan in order to implement the 2016 budget. It has been servicing debts, local and foreign.
All we’ve heard are tales of billions and trillions which effect nobody has felt in Nigeria: the Treasury Single Account contains N4trillion; the pension fund, N5trillion; hundreds of billions in local and foreign currencies have been recovered from looters. Yet, millions of jobs have been lost. Hunger has invaded millions of homes as the prices of food items have doubled or tripled. The naira has become worthless, yet workers earn the same salaries they earned five years ago.
The Buhari regime inherited a foreign reserve of $32billion; the reserve is now down to $24billion. Apart from the $10million pledged by AfDB this year, the country has borrowed from known and unknown sources. If the request to borrow $30billion is granted, it means Nigeria would need at least $6billion (N3trillion) each year for foreign debt servicing alone.
How would the debts be paid? I read that Buhari’s hopes are firmly on oil now. But the prognosis for the product is grim. A barrel is not likely to exceed $60 in the next decade, and militancy is not likely to stop in the oil-producing states until Nigeria returns to fiscal federalism.
Therefore, it’s safe to conclude that if the requests are approved, Nigeria will return to a debt trap from which it may never be freed. There may be pressure from the IMF to further devalue the naira as a condition for borrowing more and more and more. My prediction: within five years we shall head toward Zimbabwe or Venezuela.
Are we even sure the loan will be granted? The West understands Nigeria better than Nigerians. They can only loan us $30billion with the intention of enslaving us, for they know we won’t be able to pay back. Even our ability to service our loans is suspect: N3trillion would be 50% of our annual budget. The projects to be financed with the loan might not be viable, for the imperialists know how to frustrate dreams. Ajaokuta, for example.
The United States is the world’s biggest debtor, but its economy is strong. Americans don’t have power problems and manufacturing is booming. America’s exports are huge – and will always remain huge – while its services are in high demand. There will always be looters from the impoverished continent willing to travel to America for education (whatever education) or health tourism.
But what do we have here? What do we produce? Not even the food we eat. And that’s why the naira will keep falling.
By the way, then finance minister Ngozi Okonjo-Iweala and President Obasanjo promised us, in 2005, that debt “forgiveness” would be Nigeria’s second independence. We have yet to reap their promises. Ten years later we’re asking to borrow exactly $30billion that was “forgiven” after we had paid $18billion.
A brawl between the executive and the legislature should be expected in the next few weeks. The legislature’s refusal to approve the loan would translate to the government’s inability to pay the salaries of its employees including the lawmakers’ salaries and allowances. The Nigerian economy would then officially go into depression. Activities of militants in oil-producing areas could lead to total collapse of the economy in 2017.
Left to me, Nigeria shouldn’t return to the debt trap. For too long, Nigerians have been left to die in instalments. The Buhari government should cancel the loan request and allow the country to swim or sink. This would entail placing an embargo on disbursement of foreign exchange. Anyone who wants dollars and pounds should buy them anywhere but the Central Bank.
The likely result? The naira would find its level – and our taste for foreign goods and services would find a balance. In the short term, the borders could be thrown open for those wishing to import anything while N1, 000 or N2, 000 exchanged with $1.
Within six months, no one would be told to stop importing anything, for warehouses would be bursting with unsold goods. Not even imported fuel would be sold easily at perhaps N500 per litre. Nigerians’ ingenuity would be unleashed: they would make things they needed and cultivate foods they would eat. “Illegal” refineries would cease to be “illegal”. Luxury items would disappear. Former necessities like phones, beers and cars would be restricted.
Certainly, the imperialists would advise against going that way. They know their own economies would be threatened without Nigerian imports. But the choice is ours: remain in slavery or take our destiny into our own hands.
— By ANIEBO NWAMU
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