Debt overhang: Time to call Buhari, Finance Minister to order on reckless borrowing

By Ifeanyi Izeze

Aside partisan political affiliations and/or tribal lineation, anyone who still thinks it’s not time to call this government to order over its reckless borrowing binge obviously does not mean well for this country.

Is it not absurd that for the first time in the recent history of this nation, everything we make as revenue goes into servicing of debts? We also borrow to service the ones we earlier borrowed. Haba! How can we run like this and survive as a country?

Those who think they love this government more than every other person even though the government is for all of us, would not want to hear the naked truth before our face as a nation that the continued piling of debt will sooner than expected produce an overhang that may drown not only what is left of our economy but everything about the welfare and wellbeing of the country and its people.

Let’s look at it: In 2021 Nigeria made ₦970.3 Billion from oil, ₦1.6 Trillion from non-oil taxes (More revenue from this than oil).

Cumulative of other sources generated ₦2.8 Trillion bringing the total brought in to ₦5.5 Trillion in revenue.

Out of that ₦5.5 Trillion revenue, ₦4.2 Trillion was spent on servicing debts (not repayment). That is Nigeria spent over 76.3 percent of everything it made to service debt from January to November. When we say service debt, it sound very colourful but what it actually means is paying interests on the debts we owe not even paying back part of the main debt. So the debt is standing kampe, we are just paying interests on it. You see where the real issue lies!

Pathetically, what was left after paying the interests on the debts in the last fiscal year was ₦1.3 Trillion, which, as a matter of fact; means that what was left after servicing what we owe was not enough to run the country as the  2021 national budget was syndicated to expend a total of ₦13.57 Trillion to run the country.

So since we only had ₦1.3 trillion left, an extra ₦12.27 trillion was needed. Where did we get it? As said by an expert analyst, “Yes, you guessed right – we went ahead to borrow more.”

A widely published breakdown of the seriousness of the nation’s debt crisis got the apt picture of the current Nigeria’s situation. As said, “So if Nigeria was a man who makes ₦100k a month, he borrows ₦5 million every month to pay for light bill, and running of the house.” This is exactly where we are as a nation.

As of December 2021, Nigeria still owes World Bank and China $12.38bn and $3.63bn respectively.

Nigeria spent $598.59m on servicing the debts owed to the World Bank and the Exim Bank of China in 2021, according to an analysis of data on actual external debt service payments from the Debt Management Office.

The country paid the World Bank a total of $390.92m, which included $384.28m to the International Development Association and $6.46m to the International Bank for Reconstruction and Development.

A total of $207.67m was paid to the Exim Bank of China, for different projects for which loans were taken.

Anyways, the Finance Minister, Zainab Ahmed, thinks we are doing well, and as she said, what we have is a revenue problem – and not a debt problem and if we make more money we will be alright (this is why they are taxing everything).

Yes, the Finance Minister may be right that Nigeria might not be heavily indebted by the global debt ranking, but she would have done well by checking the Human Development Index (HDI) and Per Capita Income (PCI), Gross Domestic Product (GDP), Ease of Doing Business (EoDB), Unemployment rate, etc., of the nations she used to buttress her case.

These parameters are where you would realize how dreadful Nigeria’s situation is. Using only one parameter (indebtedness) in the comparison oftentimes would not give you the big picture.

The Finance Minister should be informed if she is not aware that as a rule, no nation should ever borrow more than 40 percent of its GDP. Now we are already at 36.9 percent, all we need do is borrowing just a mere 3.1 percent more and all the alarm bell goes off.

According to experts, “Now – imagine if our revenue keeps dropping, and the debt keeps increasing as it has continued to. And at the rate this finance minister and her president are going, sooner than we expect, we will just wake up one morning and – voom – the remaining 3.1 percent crossed!”

Since we currently borrow to pay even salaries, when the alarm goes off, further borrowing means the Government will struggle to pay salary which is scary considering that the Government is the biggest employer of labour in Nigeria.

More Taxes will be imposed to raise money, including tax on Goods which will increase the prices you pay on such basic goods we need for everyday living.

Annoyingly, all you hear in and from this government are just absurdities! In a country borrowing to pay salaries of civil servants, how do you rationalise that an administrator of a government agency could come out openly to say N223billion was spent for feeding school children meant to be fed by their parents at home and we say this is fine?

NNPC came out to tell us few weeks ago that it needed N201 billion to treat methanol –laced toxic fuel the same NNPC korokoro brought into the country from refineries abroad. And those who know can bet that the managers of the organisation must have taken that money since they spend whatever they want and pay whatever is left into the Federation Account  (that’s when they are magnanimous enough to even pay something at all). This is our country Nigeria!

How many absurdities can we count? This same country that has continued to borrow to survive is spending N1.4trillion intervention in already privatized power projects; $400million for rail road from Nigeria to Maradi in Niger Republic.

The fuel subsidy bill which Mai gaskiya said was a scam conjured by the Jonathan administration to steal/siphon money from the NNPC has jumped from few hundreds of billions of naira (when corrupt Jonathan government managed our oil resources) now to N4 trillion a year when ‘Mr or rather saint integrity’ and his team of saints are in charge of our commonwealth.

The excess Crude oil account, which is like our savings is almost empty. So not only does this government and its Finance Minister borrow like there is no tomorrow, the government has no savings for emergencies. And the worst part of this all is that they always have brainless explanations for their incompetence and maladministration of our common future.

The current National Assembly particularly the Senate of baboons is the worst tragedy that has befallen Nigeria. As if they are all under a spell, they just agree to every request coming from the president even the dumbest of such presentations so long as it’s coming from the Presidency. We will hear what they have to tell us after their tenure expires next year!

Walahi, this breakdown is very necessary as wake up call to all of us because the rate this government is going with borrowing money, it won’t be long before we hit the red light which will spell doom to not only what is left as the economy but even to the citizens’ welfare and wellbeing.

This same China that has been eyeing most of our remaining functional and lucrative infrastructures will move in to begin to seize them under the guise of recovering their debt. They did it Zambia and some other places in east and central Africa. Don’t deceive yourself thinking it cannot happen in this country, the Chinese already have a military outpost in the Gulf of Guinea (our backyard). They will tell you the post is to keep a tab on America’s AFRICOM in the same gulf, na lie o. God help Nigeria!

• Mr. Izeze is a Columnist with National Daily Newspaper and can be reached via: email: [email protected]; 234-8033043009