Nigeria's Intriguing Borrowing Tradition

NIGERIA AND HER INTRIGUING BORROWING TRADITION

    Last time I checked, the 2016 appropriation bill that was tendered to a joint session of the National Assembly few months ago, precisely on Tuesday December 22, 2015 by the Federal Executive Council (FEC) ably led by President Mohammadu Buhari had been duly passed unanimously by the law makers. As regards the content of the bill, #6.06 trillion was reportedly passed as the country’s 2016 budget contrary to the proposed #6.08 trillion, which implies that about #20 billion was tagged as frivolous by the legislators.

    It’s noteworthy that the said approved bill has it that the projects to be executed in Nigeria in the ongoing fiscal year would be financed by the foreseen assistance of both local and international loans yet to be sought, albeit mainly local borrowing, having estimated the expected oil benchmark for the year among other sources of the finance.

    It’s pertinent to acknowledge that governments in rich as well as poor nations borrow money from such domestic and international markets as the World Bank, the International Monetary Fund (IMF), and commercial banks. In rich nations, government borrowing obviously stimulates the private economy; it creates jobs and raises incomes of the majority of the population of the affected nation thereby improving their standard of living.

    However, in poor or developing nations, government borrowing does not generally produce the same results or the required effect. In Nigeria, for instance, for decades now, the government incessantly enjoys domestic and international borrowing but pathetically such gesture hasn’t stimulated the private economy as anticipated. To say the least, the role of Foreign Direct Investment (FDI) in the country’s economy has not been significant.

    Between 2009 and 2015 alone, the government engaged tremendously in international borrowing. This gesture was reflected in the country’s balance of payments deficits. In spite of the enormous borrowing by the government, grants received out of benevolence, and debts rescheduled as well as forgiven, the nominal income per capita hasn’t shown any significant improvement. The country average income per capita on a monthly basis for the recent years was about USD130 dollars or thereabouts which was far below the $500 average income for the poorest African countries. And presently, pitiably, the country cannot boast of up to USD80 dollars as its monthly average income per capita.

    Conspicuously, Nigeria has recently faced an unprecedented population growth. Although the population is increasing at an alarming pace, its purchasing power is not. Such phenomenon has two cogent and inevitable effects on the economy. The first is that the rapid increase in population impoverishes the country as a whole, hence making the accumulation of capital very difficult. Secondly, the low purchasing power limits the internal market.

    The major economic plight in a country like ours remains that the government has not been accountable to the people. Thus, it can borrow as it pleases, and the unsuspecting electorate would still foot the bills. We must acknowledge that the government will continue to borrow as long as there are interested lenders provided the fiscal policies of the country remain docile; this is why suchlike policies are seriously yearning for restructuring.

    Besides, there’s enormous politics involved in international lending. Though the Nigeria’s government can invariably find its way as regards assessing loans from either official or unofficial sources via the use of its international connections or immunity, but for how long shall we continue to depend on external borrowing? This, among other paramount questions, is required to be raised by any one or analyst who truly thinks good of this country.

    It would be recalled that during 1966-1974, or thereabouts, developing nations were growing at a high rate simply because they were yet to be involved in external borrowing or importation of goods and services. In view of this, their annual average growth rate stood at 7%. But in order to meet their subsequent population growth needs, many of them began to import heavily, particularly capital goods, oil and foods; funnily enough, they are mostly involved in export-oriented strategy as it’s presently witnessed in Nigeria in the oil sector.

    It’s not anymore news that the borrowing, especially external borrowing, that is captured in the 2016 budget, which is not unusual in the Nigeria’s budgeting pattern, has been generating a lot of ripples and mixed feelings in various quarters thereby making several Nigerian analysts as well as social commentators, both home and abroad, to be involved in series of fallacious arguments, probably owing to partisanship, incompetence, quackery, unpatriotism, ignorance, or what have you, as the case may be.

    It’s amusing and perhaps very awful to realize that sometimes most Nigerians play politics with issues of national interest, particularly very sensitive economic matters. We are not unaware that borrowing is necessary, but it ought not to be seen or adopted as a measure that needs to be taken if a country must survive or grow. Such economic approach becomes consequential only in certain circumstances, and not in all, as being presumed in various quarters. Even as an individual, if you dare take borrowing as a tradition or norm, you will surely live to regret it. We, either as individual or group, need to borrow sometimes but not always.

    Of course, many are of the view that provided you are borrowing for a tangible project, it’s a welcome development. No doubt, borrowing becomes paramount and necessary only when the prospective borrower intends to use it for feasible projects such as capital expenditure. Ab initio, Nigeria has been borrowing for tangible reasons, but as a result of corruption, rather than doing the needful or investing the borrowed funds meaningfully, she invariably ends up doing otherwise. So, if we fail to address such lapse, the nauseous phenomenon would continue to repeat itself thereby making us indulge in borrowing perpetually.

    On a yearly basis, Nigeria’s international debt increases colossally, thus affecting negatively her current account balance which is expected to rise steadily. Survey indicates that external debt in Nigeria averaged USD6.38 billion from 2008 till 2015 when it reached an all time high of USD56.74 billion in the fourth or last quarter of the said fiscal year which was about 10.9% of her GDP for that very year, though it recorded a low of about USD3.63 billion in the first quarter of 2009. Worse still, a large portion of these debts are owed to private lenders at variable interest rates.

    Rather than being preoccupied with how to repay the backlog of debts, the government keeps borrowing at the expense of our dearest economy. Nigeria has apparently absorbed incessant borrowing as a tradition. Having acknowledged that it isn’t a wholesome belief, there’s a compelling need to put up stiff measures towards addressing the monumental anomaly. Against this backdrop, let’s briefly take a tour to the history book; the IMF then imposed its Structural Adjustment Programme (SAP) conditionality on the deficit countries, which Nigeria was inclusive, to force them to take necessary steps toward reducing their payments deficits and consequently earn sufficient foreign exchange to enable them pay back their loans.

    Hence, they had to devalue their official exchange rates, abolish or liberalize foreign exchange controls, introduce anti-inflationary programmes as well as adopt a free trade policy. Notwithstanding, the ‘almighty’ SAP didn’t produce any successful result, rather it ended up constituting more problems, perhaps still due to corruption. Now, the question is: how can Nigeria escape from this lingering debt trap as well as desist from her unending borrowing tradition?

    The answer is simple. We need to embark on an economic lobotomy; the Mohammadu Buhari led administration has to shift course from an internationally-dependent growth to domestically-based economic development plan. To this end, it has to strengthen most of the country’s fiscal policies, participate in frugal expenditure, initiate deflationary economic measures, detest construction of white-elephant projects, and most importantly tackle the unbridled corruption as well as security challenges with the last drop of its blood.

    We must understand that growth can be self-generated by focusing on products commonly consumed by the low-income citizens. Even a little improvement in the productivity and income in such quarter will capture a sizeable market and assist in sustaining development of other products and markets. Therefore, instead of embarking on massive infrastructural projects, the government ought to start with improving such capital-oriented projects that make production cost-effective as road cum railway network, power cum water supply, and refineries.

    So, acknowledging that borrowing is only regarded as a healthy practice when the borrowed funds are utilized judiciously and selflessly, it’s needless to reiterate that we must invest meaningfully and wisely to reap heavily and successfully. Think about it!

 

Comr Fred Doc Nwaozor

(TheMediaAmbassador)

-Researcher, Blogger, Public Affairs analyst & Civil Rights activist-

Chief Executive Director, Centre for Counselling, Research

& Career Development - Owerri

_____________________________________

frednwaozor@gmail.com

+2348028608056

Twitter: @mediambassador 

     

Memo to Govt Functionaries

MEMO TO NIGERIA’S GOVERNMENT FUNCTIONARIES

    Last time I thoroughly checked, various unguided and ungracious lifestyles were peculiar to most Nigerian government functionaries that it required only realists towards its holistic eradication. Of course, it’s only a realist that would unequivocally tell a fellow that what he or she did was uncalled for.

    It’s obvious that in several quarters across the federation, you would easily notice a government public office holder showcasing a lifestyle related to ego, deceit, hypocrisy, sycophancy, and what have you. If those we look up to invariably hide under the aforementioned nauseous idiosyncrasies, then it significantly implies that ushering in the awaited good governance would remain far-fetched.

    Give me one tangible reason someone who seems not to possess a conscience wouldn’t make attainment to governance seem not unlike a mere mirage, rather than reality. Frankly, it’s high time we started acknowledging that some factors remain a hindrance towards attaining a certain anticipated height.

    Taking a painstaking study of the contemporary Nigeria’s political arena, one needn’t be told that some, if not most, of our so-called government functionaries aren’t living up to the expectation, both socially and otherwise. For instance, one would invite you over for a meeting and consequently on the scheduled meeting day, you being the invitee would spend the whole day in the intended host’s office without enjoying even a second attention from him/her.

     And subsequently, the supposed host wouldn’t even care to tender an unalloyed apology for the inconvenience caused you, let alone making out time to reschedule the appointment for a future date with a view to making it up to you. Isn’t it humiliating? Most worrisomely, it could be that you left a different state for that very state where the proposed meeting was meant to take place, all to no avail; suffice it to say that, in spite of the enormous sacrifice put in place toward the said appointment, everything ended up a shambles.

    This, among other pertinent issues, is a common feature observed in several public officers, particularly government functionaries, in Nigeria. We are not unaware of contingencies; we’re also aware of ‘man proposes, God disposes’, but what we need to note is that there’s need for us to be extremely conscious and mindful of our actions towards others.

    I keep reiterating that ‘I’m sorry’ doesn’t mean that you were wrong; rather, it simply means you cherish or adore the relationship far more than your ego. It’s very amusing to observe that most persons are of the opinion that if one says ‘I’m sorry’, it automatically ridicules or diminishes his/her status. That’s indeed a fallacious notion.

    People ought to learn to lead well. We’re no doubt deeply expected to lead by example. Never you take your subjects, followers, relatives, friends, or fans, as the case may be, for granted. It isn’t all about being an institutional leader or occupying a leadership position; if you are a public figure or a well respected individual in the society, definitely thousands of people are following or looking up to you, hence you are automatically a leader.

    Let’s endeavour to do the right thing at all times even when we are sleeping or deeply snoring. Don’t promise people ‘A’ but at the long run you end up doing ‘B’. Mind you; if you dare renege on your promise or pledge, the consequences await your person come rain come shine. There are no two ways about it. Thus, the choice is yours.

    I’ve noticed that some of these officers act out of influence. The moment they secure the position either via appointment or election, they would allow themselves to be negatively influenced by their colleagues who come from mediocre backgrounds. It’s really quite appalling and pathetic. We should learn to be ourselves; don’t change because you noticed that others have changed. It’s indisputable that change is constant or that human beings are naturally dynamic, but that doesn’t imply we ought to change to anything.

    Inter alia, don’t deceive yourself. I’ve equally observed that we often deceive ourselves, perhaps owing to ignorance, lack of courage, fear of the unknown, and myopia, among others. Yes, many of us are myopic in nature; we’re unable to see beyond the crossed line or our immediate surroundings. To this end, I implore us to always employ a panoramic view in whatever we do or anywhere we find ourselves. Self-deceit has been proven to be one of the greatest shortcomings any man would possess or parade.

    In other words, we must endeavour to tell ourselves nothing but the truth at all times and at all cost. Detest ego because it destroys one so easily just as an earthquake would. Desist from deceit because it maims, and kills too. Above all, kick against hypocrisy and sycophancy with the last drop of your blood because they remain unthinkable societal monsters regardless of the circumstance.

    Beloved, be wise. Do not allow power, affluence, or a certain position you find yourself to becloud your sense of reasoning. One day, the position will surely depart leaving you behind; and at that stage or moment, you may not be able to cope with what life entails. Think about it!  

 

Comr Fred Doc Nwaozor

Twitter: @mediambassador 

  

Quit Politics, Face Governance

QUIT POLITICS, FACE GOVERNANCE

     Last time I checked, it was the chapter three of the Ecclesiastes’s book in the Holy Bible that said “There’s time for everything under the Sun.” needless to reiterate that whatever one intends to do or embark on here on earth, he or she must acknowledge that there is a specific time such intending action is meant to be taken.

    The above assertion implies that every activity, either proposed or ongoing, is highly and strictly depended on time. In other words, every thought, action or inaction abides by the supremacy of time. Just as there’s an apt time for cultivation, propagation as well as harvest of a crop, so do we have time for birth, growth and death of a human being or any creator.

     I have come to realize that the reason we often fail in so many projects we embarked on is simply because we usually do the right thing at the wrong time; and that is the basis or rudiments of this piece. Unequivocally, we invariably tend to fail in our various endeavours owing to the fact that we take the aforementioned biblical or divine assertion for granted.

    It’s not anymore news that in several facets across the federation, various politicians have already commenced politicking against the next Nigeria’s interregnum come 2019, thereby making the entire polity seem nauseous and unreasonable when it is meant to be loveable. How do you reconcile this? Frankly, it’s really pathetic that most Nigerian politicians are still yet to contrast between politics and governance.

    In Imo State, for instance, in several quarters, people including government functionaries have started debating or agitating for who would emerge as the next governor of the ancient state. It’s even more pitiable to observe that the electorate who are expected to be the main solicitors of governance happen to be the major actors in the said ongoing melodrama.

     To say the least, we seriously need to reexamine ourselves, both mentally and otherwise. Undoubtedly, there’s an urgent need for proper diagnosis toward ascertaining our actual plight. We need to ascertain what prompted the proclivity for such lifestyle; we need to find out if it is an inborn anomaly or self-indulgence, because we can’t continue like this. Honestly, failure to diagnose this lingering societal endemic might cause us a monumental self-inflicted injury.

     Right now, rather than constituting uncalled political agitations, what’s required in every quarter, be it a state or national issue, is a viable and proactive opposition. A viable opposition would strongly help to ensure that the ruling party maintains a participatory democracy in all ramifications irrespective of the circumstance. It’s only a participatory democratic setting that can yield a wholesome administration.

     On the contrary; instead of working assiduously towards forming a formidable opposition, the politicians are only concerned with how and when to defect to the ruling party with a view to ensuring that the ‘national cake’ does not pass them by. On a daily basis, what we hear among the political class remains nothing but outright defection. It’s no doubt an ignominy that an average Nigerian politician invariably wants to be a member of the ruling party.

     A certain political party cannot rule at all times or forever; leadership is about ‘soldier go, soldier come’. Besides, if everyone rules, who would serve or stand in as the opposition? We really need to note that without a sound and firm opposition trailing a certain leadership, the administration of the leaders in question would definitely be porous. There are no two ways about it. It’s indeed needles to state that we seriously need to learn more about leadership prospects, challenges and crisis.

     It’s the opposition and other concerned bodies that are meant to motivate the followers toward ushering in the desired change. Suffice it to say that good governance is a product of adequate cum reliable opposition and genuine followership. The followers would continue to be docile or marred by apathy unless they are thoroughly informed, educated as well as duly activated; and such role is the function of the opposition, analysts, civil society, religious groups and what have you.

    Due to lack of active participation by the citizenry, presently you would notice that implementation of good governance is usually a mirage. The citizens need to fully comprehend that the leaders are answerable to them; they must note that leadership and followership are inevitably interwoven. We can’t sit on the fence and expect miracles or wonders to take place; the leaders are human, so there’s need for reminder, criticism, and so on, when necessary. Thus, we must be ready and willing to call them to order whenever they err or go astray.

    The church or mosque, or as the case may be, isn’t supposed to participate in politics, but governance. It’s obvious that the former begets the latter; but we need to comprehend that both factors, which are conspicuously two needed societal recipes, are just like two parallel lines that have no meeting point. Politics ends at the polls, whilst governance begins at the polls; hence, where politics ends, governance takes over. But it’s apparent that in the contemporary Nigerian society, we tend to mix both tools, thus not unlike an aberration.

     Nigerians must understand that this is the time for governance, and not politics as it’s being observed in most quarters. Thus, everyone ought to live up to the expectation towards ushering in the awaited change if we are truly ready to see a changed Nigeria in its entirety. Surely, this is the right time for the change mantra to be practicalized. Think about it!

 

Comr Fred Doc Nwaozor

Twitter: @mediambassador