Gbese (debt) is not a thing to be proud of in my neck of the wood. An onigbese (debtor) does not command much respect in any gathering. In fact, he goes through the inner way if he sees his creditor afar. But my country is so shameless when it comes to owing money that it has invariably lost substantial dignity.
Shortly before Major-General Muhammadu Buhari overthrew Alhaji Shehu Shagari in 1983, Chief Obafemi Awolowo profiled the profligacy of that administration in a speech he delivered at the Unity Party of Nigeria (UPN ) sixth annual congress in Abeokuta on 15th October, 1983.
Said Awo:
“Nigeria’s public foreign debt which Shagari inherited from Obasanjo was $3.744 billion…….But at the same time he had a surplus of $3.622 billion on our balance of payment account. In 1980 our foreign exchange reserves had fortuitously (that is due to no act of conscious management on the part of Shagari) gone up to $4.5 billion. In the same year our foreign debt rose to $5 billion. Again, by 1981, our total foreign indebtedness rose to over $6 billion and we were in deficit on our foreign exchange account to the tune of $4.5 billion.
“Since then, Shagari and his team just went wild in financial profligacy. In the year of grace 1983, our total external debt stands at between $16 billion and $20 billion. The Federal Government will not tell us the true state of our foreign accounts. However, it is indisputable that this year, for foreign debts, accrued due by the of 1987, we need the sum of $1.754 billion to service the same set of loans.
“A few months ago, we borrowed $.5 billion to pay our trade debts which accrued due by the end of April this year. We are now striving hard to procure some generous creditors who will give us sufficient loans to pay the principal and interests of the debts, which matured at the end of 1979. And the trade debts which accrued due since May remains, as far as I know unpaid.
“We can all see at a glance, therefore, the depth to which Nigeria has sunk in the slough of foreign indebtedness as a result of the thoughtlessness of the Shagari and his team in their four years of office.
“It is from $3.744 billion to $16 billion or $20 billion. Furthermore, to complicate our present grim foreign exchange position, we have not only run our foreign reserves down to NIL, but we have also, during January to May of the year, accumulated. A balance of payment deficit of N193.9 million.
“In 1981, the Fourth National Development Plan 1981-1885 was launched with fanfare. Under the plan, the Federal Government was to spend N40 billion on its capital programmes in five years. But within 15 months it had spent N15 billion-that is almost two-fifths of the total amount, within one-fourth of the life span of the plan. What financial profligacy?…
“By the end of May this year, the Federal Government is owing on Treasury Bllls and Treasury Certificates N11.162 billion. This amount compares very unfortunately with what it owed in the three preceding years as follows:
(1) N4.836 billion in 1980
(2) N7.839 billion in 1981, and
(3) N11.452 billion in 1982
I have no access to exactly how much it owes on Ways and Means Account, but I am told that it has far exceeded the conventional limit. Yet, Shagari continues, unrepentantly, to raise domestic loans through Treasury Bills and Treasury Certificates.
“The tragedy of it all is that as it behaves at home, so he does abroad. His scramble for foreign loans from any source whatsoever and at any interest-rate up to Libor’s 20 per cent per annum has no parallel anywhere except perhaps in a bankrupt country with a lazy and incompetent President like ours.”
It was a grievous moment for a man who managed the economy that even in a war time country did not borrow one kobo.
Exactly two and a half months after Awo’s lamentation, Shagari was overthrown in a coup led by Major-General Muhammadu Buhari. The country went wild in rejoicing.
In his inaugural address to the country on January 1, 1984; Buhari said of Shagari regime:
“It is true that there is a worldwide economic recession. However, in the case of Nigeria, its impact was 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 the legislators were alive to their constitutional responsibilities; Instead, the legislators were preoccupied with determining their salary scales, fringe benefit and unnecessary foreign travels, et al, which took no account of the state of the economy and the welfare of the people they represented. 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 condemned perpetually with the twin problem of heavy budget deficits and weak balance of payments position, with the prospect of building a virile and viable economy.”
By August 1985, Buhari himself was booted out of office only to return in 2015 as civilian President on the crest wave of “change.”
But four years down the line and on a second term like Shagari, Awo would only have to change figures of his 1983 assessment of Shagari if he were to score administration today.
With Awo no longer here, The Guardian on 16th October, 2019, reported National Merit Award winner, Professor Anya O. Anya as alerting the country that at the current over N25 trillion, Nigeria has borrowed more in the last three years than it did in previous 30 years.
Making reference to the Debt Management Office (DMO), Anya noted that the agency informed that Nigeria’s debt as of 2015 was a little over N12 trillion, but is now over N25 trillion.
“Much of the extra loans have been applied to recurrent expenditure given that most state governments could not even pay salaries. Indeed, it has been alleged that we spend 60-70 per cent of our total earnings in servicing debts that is paying interests (not re-paying loans),” he stated.
He said despite these, the normal metrics of economics continue southward, stressing that unemployment, inflation, productivity are not giving Nigerians any cheering news either. He pointed out that although the empanelling of an Economic Advisory Council is a step in the right direction, there is a need to face the gravity of the current situation.
Two days after Anya’s warning and despite hitting over N25 trillion in the first half of the year, the Federal Government in the order of Shagari has approached the World Bank for a fresh $3 billion loan, according to the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed.
The minister disclosed this on the sidelines of the World Bank/International Monetary Fund meetings in Washington DC, United States.
According to the minister, the new loan would be used to finance the Nigerian struggling power sector.
The new loans would most likely end in conspicuous consumption as we cannot see what the borrowings of the last four years have been applied for in terms of development.
It is apparent the country is now primed for total bankruptcy as we continue to consume what we don’t produce. There is no other way out for. Nigeria on death row except re-setting into federalism which would release the productive capacity of ALL sections of Nigeria.
Sadly our command and control minders don’t want to hear of it!
Credit: Yinka Odumakin, Nigerian Tribune