Two Years of Binge Borrowing

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Ring True

with Yemi Adebowale, yemi.adebowale@thisdaylive.com; 07013940521 (text only)

Binge borrowing is a monster the APC-led federal government and many of our state governors have been notorious for in the last two years. Just last week, Acting President Yemi Osinbajo asked the National Assembly to approve $1.5 billion loan for 12 states. The loan figures are scary, yet, this country has virtually nothing to show for all these borrowing. According to statistics from the Debt Management Office, Nigeria’s indebtedness to foreign/local creditors as at Q1 of 2017 stood at N19.16 trillion. Between the end of Q4 of 2016 and that of Q1 of 2017, there was an increase of N1.8 trillion, with the debt moving from N17.36 trillion to N19.16 trillion. This means that N1.8 trillion new loans were acquired in just three months.

For me, the biggest issue here from the DMO’s figures is that the Buhari administration and many state governors took loans amounting to N7.1 trillion in just two years from foreign and local creditors. As of March 31, 2015, the country’s total debt stood at N12.06 trillion.

By Q4 of this year, it is N19.16 trillion indicating that the debt level increased by N7.1 trillion within two years. The Buhari-led federal government took the bulk of the loans. Within a period of two years, the federal government borrowed N3.46 trillion from domestic creditors, thereby increasing the domestic debt of the federal government by 40.71 per cent. External debt for the federal and state governments rose from $9.46 billion to $13.81 billion. This means that within the two years, Nigeria’s external debt rose by $4.35 billion or 45.98 per cent.
The federal government and many states are increasingly depending on borrowing, even for the implementation of routine responsibilities. Genuine patriots should be worried about this. The country’s current indebtedness is expected to reach 23.3 per cent of its Gross Domestic Product by the end of 2017. The International Monetary Fund has projected that Nigeria’s indebtedness would further climb to 24.1 per cent of the nation’s GDP by 2018.

What I find most ludicrous is that the N7.1 trillion borrowing within two years has failed to impact on the nation’s infrastructure and economy. Just look around you and you will see massive decaying infrastructure in all sectors – health, education, roads, housing and the rest. Visit Apapa, home to Nigeria’s key sea ports and you will weep for this country. Visit any of our teaching/general hospitals and you will return home depressed. For example, workers of the Lagos University Teaching Hospital have been on strike for weeks over decaying infrastructure. Virtually all our public schools are in tatters. Visit any one around you. Federal and state governments have failed to translate this massive borrowing to better life for the people. What they have given hapless Nigerians in return are hunger, disease, poverty, unemployment and malnutrition.
This slithering economy amidst massive borrowing is clearly reflected in the unemployment crisis in the country. Let’s look at the statistics. According to the NBS, the unemployment rate in the country rose to 14.2 per cent in the fourth quarter of 2016 from the 13.9 per cent recorded at the preceding quarter. This is 4.2 per cent higher than the rate recorded during the fourth quarter of 2015. While the number of unemployed people in the economy is growing, the number of underemployed people is also rising.

The NBS report also disclosed that underemployment rate rose to 21.0 per cent in the fourth quarter of 2016 from 19.7 per cent recorded in the third quarter of the year. The rise in the unemployment/underemployment was because Nigeria recorded negative economic growth in 2016, forcing many employers of labour to retrench staff. Nigerians who lost their jobs in 2016 rose by 2.1 million to 11.55 million from 9.48 million at the beginning of the year. Everywhere you turn in this country, you will find so many jobless youths and adults. This is upsetting.
A huge part of the revenue that governments at all levels ought to be using for poverty alleviation and infrastructural development has been going into debt servicing; yet, we are sustaining the binge borrowing. The IMF estimates that Nigeria spends 66 per cent of its tax revenues on servicing debts. This country is spending such a huge part of its revenues to pay interests on debts. Today, I am leaving with a quote from Emir Muhammed Sanusi II on binge borrowing. He said: “Borrowing has reached its limit and government should therefore look for ways to attract investments. Growth can only come from investments. It cannot come from consumption.  It cannot come from government balance sheet. It cannot come from borrowing because you cannot borrow unsustainably.” I hope this administration will reflect on these words of wisdom.

Governor Ortom Should Respond to Sleaze Allegations
I am earnestly waiting for Governor Samuel Ortom of Benue State to respond to frightening sleaze allegations against him by Abubakar Tsav, a former police commissioner and current Federal Public Complaints Commissioner overseeing the state. As at press time, Ortom was still shilly-shallying. For those who have not been following the story, Tsav, in a 10-page petition to all anti-graft agencies accused Ortom of “corruptive nepotism and executive recklessness by placing his family business (Oracle Business Limited) above the state.” For example, he alleged that Ortom gave a contract to the said family business for the supply of 30 Toyota Prado Jeeps at N540 million without following due process.
Tsav also accused the governor of using his office to hijack a humanitarian project, “Feed Mill Factory” meant for the state and incorporating the mill into his family’s company. Funds were allegedly provided for the mill by international donors. I sincerely hope that our anti-graft agencies will look into these allegations and take appropriate action.

The Wisdom of Paul Unongo
A number of eminent northerners have continued to reprimand the thoughtless ‘Arewa Youths’ who asked Igbo in the North to leave. Professor Ango Abdullahi who backed them is also getting knocks. The position of Paul Unongo, the Deputy Leader of the Northern Elders Forum on the issue is instructive. He stated: “Professor Abdullahi is on his own in backing the Arewa Youths. The NEF could not have adopted the position of ignorant youths who were not there when Nigeria lost three million of its citizens to the civil war they fought to keep the country as one united nation.
“I am the Deputy Leader of the Northern Elders Forum and Ambassador Yusuf Maitama Sule is the leader. So, only the two of us can speak for the forum on sensitive matters like this. Therefore, if Professor Abdullahi is backing those ignorant youths, then he is speaking for himself. We cannot support the nonsense those boys said. We fought civil war with our blood to keep Nigeria one. So, any Nigerian can live in any part of the country he feels like.  The Igbo are welcome in the North; they are welcome in Yoruba land and my own village in Tiv land and they have right to pursue their daily bread and own property.

“We couldn’t have killed three million people to keep Nigeria one and come back and allow these kids to insult our intelligence. We knew why we fought the war, we knew why we killed the people we loved. So, if the young men cannot build a nation, they should not destroy the one we put our lives on the line to build for them. We cannot allow young men who did not fight the civil war with us to destroy our country, because Nigeria cannot afford another civil war.”
Of course, the trifling youths who signed the quit notice are clearly not true representatives of broad-minded Arewa youths, who are in the majority in the region. For me, signatories to the quit notice are just a bunch of attention-seeking riff-raffs who should be in jail.

Tanko Al-Makura’s Cruelty to Breeze FM
Governor Tanko Al-Makura of Nasarawa State appears extremely intolerant of criticism. They say he’s ever-ready to destroy anybody that points to his failings. This was exactly what Al-Makura did to Breeze 99.9 FM, a private radio station based in Lafia. The building housing the radio station was demolished with a rickety excuse. This station has been very critical of Al-Makura’s activities. The Nasarawa Urban Development Board demolished the building on May 20, citing alleged violation of land approval laws. It also claimed that its action became necessary because the station’s facilities posed a health hazard to residents living close to it. Haba! This is preposterous and reprehensible. This story was obviously made up. The station’s Executive Director, Dr. Nawani Aboki, noted that the demolition was swiftly carried without requesting for approval documents from the owners. He added that Al-Makura was angry because the station consistently gave voices to all shades of opinions, especially oppressed civil servants. Clearly, the demolition did not follow due process as stipulated by the laws of our land. Human rights groups must rise up for Breeze FM. This injustice must not stand.

Kayode Fayemi, Please, Nobly Honour Ekiti Probe Panel
The Minister of Steel and Mineral Resources, Kayode Fayemi has been doing everything possible to frustrate the Judicial Commission of Enquiry set up by his successor, Ayodele Fayose to probe his tenure as governor of Ekiti State. The latest is the suit he filed, asking a court to restrain the panel from investigating him over allegations of fraud and diversion of public funds. Honestly, Fayemi has not impressed me one bit with his response to the challenge. All his talk about witch hunt by Fayose is twaddle.  A man who has nothing to hide should be prepared to appear before any panel. The good thing is that the panel will be sitting in public. Besides, it is headed by highly distinguished retired Justice Bamidele Oyewole. I have gone through the terms of reference of the panel; I don’t think Fayose is asking for too much.
Fayose wants the panel to ascertain how much Ekiti State received as statutory allocations during Fayemi’s tenure and how same were disbursed; look into the financial transactions of the state between 2010 and 2014; ascertain the amount received on behalf of the state from the Universal Basic Education Commission; investigate the allegations of fraud/loss of funds, including the diversion and conversion of the UBEC funds; ascertain the amount the state took as loans during the period and how they were utilised; including all other issues relating to the finances of the state within the period under review, and to make appropriate recommendations to the Ekiti State Government.

Fayemi, as the governor during the period under review, should be happy to appear before the panel and shed light on these grey areas. Many will be shocked to know that the Ekiti State Commission of Inquiry Law, under which the panel to investigate Fayemi’s tenure was set up, was made and signed into law by Fayemi himself while he was governor. This former governor should show some respect for the law he signed. He should emulate former Osun State governor, Olagunsoye Oyinlola who presented himself before a panel set up by his successor to probe him. Fayemi should do same in the full glare of the media and let the good people of Ekiti State judge him for his alleged financial misconduct while he was in office. I am particularly worried that Fayemi allegedly diverted N852 billion Universal Basic Education Board’s fund during his tenure. His refusal to appear before the Ekiti State lawmakers to shed light on the issue is also embarrassing. It is even more embarrassing that the police refused to implement a valid warrant issued by the lawmakers for Fayemi’s arrest. Now, he is trying to use the court to frustrate the enquiry panel. This minister should toe the path of honour by honouring the panel and the good people of Ekiti State. This is my unflustered message to Fayemi this morning.