It doesn’t make any sense when you say ,in one breath, that you are “committed to lifting 10 million Nigerians out of poverty”, and in another, to actually commit their future to perpetual penury . Nigeria’s government is about doing exactly that.
Mohammadu Buhari, Nigeria’s president, Thursday, re-introduced a bill to the senate in which he seeks $ 40 Bilion in external borrowing. In September, 2016, Bukola Saraki, head of the senate at the time, threw the bill away as it had no “borrowing plan”. The Senate didn’t think it was necessary to saddle the nation with loans far exceeding its foreign reserves. It also didn’t ( still doesn’t) have the potential for repaying the loans.
But with Mr Saraki firmy removed from the senate and Ahmad Lawan, a rubber stamp, according to his critics, in charge, Mr Buhari doesn’t seem to think that the bill will stall this time.
“The letter, which was dated November 26, 2019, was read on the floor by the President of the Senate, Ahmad Lawan, during a plenary ” reports Vanguard, a newpaper.
In the letter, Mr Buhari blamed the last Senate for his inability to build “some critical infrastructure “.There are a lot of anomalies in the latest development.
First,the fact that the last Senate leadership ( Lawan was even leader) rejected the bill meant that Nigerians didn’t like it. It was going to put them in financial prisons forever. What has changed beyond the absence of Mr Saraki? Nothing except that Nigeria is in far worse situation to undertake such loans more than it was in 2016. Its debt is a mindnumbing 26.7 Trillion Naira( $86 Billion). So, even without borrowing, Nigeria is already waist deep in debts. What’s more, the government has nothing to show why it had to borrow so much.
Finance minister ,Zainab Ahmed, admitted in New York that “not all of our debts have been captured”. In other words, that figure is just a guess. But in real terms, Nigeria spends about 50% of whatever it earns just servicing those debts.
It is wrong to take on any forms of loans today. The citizens are groaning from the raft of unwise economic policies of the past 4 and half years. It is pointless to add to their pains.
Between July 17 and November 16 ,this year, the hapless government has spent 11% of its foreign reserves ( $ 5.1bilion) as its decision to close its borders to trade is crippling an economy that is really in a condition worse than a recession. The government will deep more hands into the reserves until it gets so depleted that nobody will risk doing business with Nigeria. As a matter of fact, there were two consecutive quarterly declines in GDP this year alone but the government didn’t classify that as a recession.
Already, investors are cashing out and leaving. Shell and Total, oil giants are looking elsewhere in Africa. The reason the oil companies are fleeing is “tax policies introduced” in 2018.
Mr Lawan was quoted as saying that Mr Buhari was the pal of the senate and thus he will get approval for whatever he wants. The Senate president is confirming what eveyone else knows, that is, the National Assembly is a rubber stamp.
Nigeria’s economic woes can only get worse if the loans are approved. As oil prices go South daily and the US becomes the world’s biggest oil and gas exporter, it means less earnings for nations like Nigeria. And so, at some point, in will have to default in the servicing of the loans. It will mean more unemployment, deaths, crimes and sundry other aliments that assail a failed government.
Incidentally, in Mr Buhari’s last engagement with Mr Saraki’s national assembly, the president said that “they were not patriotic” and he hoped that the next one will be. Mr Buhari’s idea of patriotism is when he is able to act unchallenged.
Mr Lawan will help Nigeria and himself by rejecting that bill. Nigeria doesn’t need the pains of such a careless borrowing spree.