By Vivian Bellonwu
Nigeria’s hitherto precarious economic state appears to be in for an unmitigated meltdown as the present Coronavirus pandemic has exposed and is bringing to the fore, both the weak nature of the nation’s economic fundamentals as well as the deficient capacity of its managers and management.
Following the COVID-19 pandemic outbreak and the hit it is giving to the economy, government’s first and seemingly singular response, has been simply – to borrow. From ₦850 Billion Naira credit approved by the country’s Senate to a staggering $3.4 Billion loan from the International Monetary Fund, IMF, both the Central Bank of Nigeria and the Ministry of Finance, have talked of plans to embark on a borrowing spree, from local and foreign sources to fund the nation’s budget. The Minister of Finance only last week, hinted that the World Bank would be borrowing Nigeria (and some other African countries), $510 Billion between 2021 to 2023.
The Nigerian Government’s rapacious appetite for loans and borrowing is well known, and the COVID-19 pandemic appears to present it with plausible pedestal to ventilate this proclivity. It is on record, that even with a weighty debt overhang of $84 Billion as at December, 2019, the government earlier this year, sent a request to the National Assembly to borrow a cocktail of loans amounting to a stunning $22.7 Billion mainly from China and the World bank. Nigeria currently struggles with its national budget and this is largely because, debt servicing consumes a huge percentage of the resources earmarked for national development.
Part of the worry, stems from the fact that Nigeria’s history with loans, both with its judicious use as well as conditionality has been appalling; while endemic corruption has rendered all loans borrowed for infrastructure and development purposes ineffectual, the country has had to both live with and bear the brunt of the many harsh conditionality that come with the loans. Already, with the latest loan of $3.4 Billion advanced to the country by IMF, the body has hinted at devaluation of the Naira. This is tragic, even as it is very much in the nature and manner of IMF loans (and its conditionality), which largely strangulate, wane and in some cases kill economies of developing countries, while overseeing the hoisting of neo-liberal policies that promote unmitigated inflation, job losses, mass poverty and unbridled dependency. Some African countries with smart governments such as Tanzania, rightly recognize the booby trap these loans represent and only recently, its President roundly rejected a $10 Billion Chinese loan offer, outrightly calling the conditions attached to it “madness”.
Nigerian government must refrain from this proclivity with quick-money, in the forms of loans, credits, etc, for beneath it is carefully tucked away tragic conditions, usually, effectively hidden from the citizens cum public.
The Speaker of the House of Representatives, Femi Gbajabiamila, rightly pointed out at the resumption of House plenary from the COVID-19 break, that this is the time for the country to re-invent itself by doing things differently, and taking those steps and actions that will re-set the country onto the trajectory of real development. This call is germane.
The Nigerian Government has received robust support systems since the outbreak of the pandemic to warrant a total withdrawal from such sordid borrowings. Nigeria has been granted debt relief by the G-20 nations and the World Bank, it has also received huge sums of money from home and abroad running into trillions of Naira, to support the country in mitigating the impact of the pandemic, that if properly planned, channelled and utilised, would meet the country’s needs. Anything to the contrary, can unarguably be seen to be propelled by corruption, greed and an appetite to embezzle public funds. The debt relief should free up the needed revenue to fund the budget and invest in developmental projects and programs, while the donated funds will provide resources to further address the COVID-19 impacts.
The present administration must do all it can to refrain from leaving behind a legacy of debt and plunging Nigerians into generational debt-enslavement and repayment, enslavement to foreign elements, poverty and unmitigated hardship.