Madam Minister, Please Don’t Borrow $30 Billion For Our Unborn Children!

January 24, 2017by Tope Fasua0

This government is daring us. Each day, they stuff their entire arm and body down our throats and push us to break our silence or else! Or how does one explain Madam Finance Minister’s claim that “Nigeria has no choice but to borrow $30 billion.” If that was how past governments borrowed $30 billion because they had no choice, I bet she will not have any ministry to preside over today. In fact, listening to her confuse everyone with her good looks and British accent and get away with it, one begins to wonder if she has other allegiances. For these things happen. This $30 billion borrowing business started like a joke, and many people have said that with our current national balance sheet, we cannot leverage such an amount. But the government of the day seems hell-bent, and as they’ve just said, this is ‘their last hope’. The point is; last hope to do what?

Mrs Adeosun had this to say at the recently concluded Trust Dialogue:

“Where are we today and what’s the problem? This is my requirement every month: salaries, statutory transfers every month, I need N210 billion every month. Debt, not the debt that we are planning to take, but the inherited debt; I need N120 billion just to service it. So, every month, I need N330 billion… Just to give you an idea of where we are today, last month’s FAAC allocation was N310 billion. So, the Federal Government got about N140 billion; but I must cover N330 billion a month before we can do a single capital project… So, when we start the argument, should we borrow, should we not? The truth is that we have no choice. If you are waiting for the oil price to recover, the prognosis is that it’s not going to go back to $110 per barrel any time soon… So, to get the economy growing, we have no choice but to look for low-cost funds and put that infrastructure in place, because it is the infrastructure that will unlock the economy… It is the infrastructure that will allow us to, rather than importing powdered milk, have the cows in Taraba State with huge potential.”

I will hereby itemise the problems with her thinking, to make it simple. Let us discard the personalisation of everything; “I need N21O billion, I must cover N330 billion” and so on. I reckon it comes with the territory, sitting atop a nation’s finances. But in this period of great distress to families around the country, one would expect her to be a little more emotionally intelligent. This is not the time for bragging at all. Or perhaps that is just a British way of expressing these things. But I know the Brits; they are the most self-effacing people in the world. My Masters’ supervisor’s first warning to me while studying in the UK was to avoid the use of ‘I’ and ‘me’, otherwise I will lose marks. That is why I’m a bit taken aback at the manner of speaking by Madam Kemi, being a thoroughbred Brit herself.

Now to the nitty-gritty.

  1. The Finance Ministry needs N330 billion monthly to sort out two things; salaries and wait for this… debt servicing… and what we need is more debt? This is counterintuitive, because with this gargantuan debt of which volume we have never contracted in Nigeria’s history, our debt servicing figure will easily climb to N800 billion monthly in a few year’s time, low interest or not. Madam Kemi would have finished her tenure and been granted some favour by some international body. Who will pick the tab? Our unborn children? Nigeria has never borrowed more than $3 billion at once and we constantly get into trouble. How can we manage 10 times that? What has got into us now? Why is she seeking this jumbo loan with so much confidence? What has happened to the civil society and other right-thinking Nigerians? Why are we sleepwalking into slavery?
  2. Madam Adeosun stated on December 27 last year, through no less than Garba Shehu – presidential spokesman – that she has caught and removed 50,000 ghost workers from government payroll and thus saved N143 billion annually. Is the payroll still growing? Is government employing more when it should be trimming down? Why has government not deemed it fit to name those who have been benefiting from this ghost-worker syndrome from time immemorial. Somewhere in Shehu’s statement on this great achievement, he quickly and ‘cleverly’ breezed through a statement that 11 people in the payroll office have been arrested and referred to EFCC. Are these the only 11 people who share N143 billion yearly? Shehu even reduced the figure to five yesterday January 22, 2017 in another statement, and went on to narrate fantastic stories of four people whose total haul was less than N50 million even though we are looking for beneficiaries of N143 million annually, for perhaps several decades! Are there big men behind this who are being protected because they are political bigwigs? This is just too fantastic. Why is Mrs Adeosun keeping mum about the consequence of her own work? Why is Shehu suddenly the vuvuzela of the Ministry of Finance? Was she asked to keep quiet? Or as my fellow accountant, she believes that this event is not material enough to warrant open declaration and elucidation for the sake of Nigeria?
  3. Will the refusal to out as many people as benefited from that ghost worker fraud not embolden others to get back into the business and thus add back the figure they claim to have removed in a short while? I refuse to believe that only 11 or five people in the payroll office benefited from that monumental fraud. Even if they are, WHAT ARE THEIR NAMES? Garba and Auntie Kemi why are you guys doing this? Do we really want to solve a problem or paper over it by plunging the country into the biggest debt ever? What are the names of those who have benefited from this heists over time? Why is a government that rode in on the platform of anti-corruption suddenly so afraid to name and shame corrupt people but will always wriggle out of tight corners? Why?
  4. Madam Kemi railroaded the argument into the issue of crude oil prices. Why did she assume that anyone was thinking about crude oil, much less waiting for crude oil to recover to $110? It is only they in government who think that way. Proper thinkers have since moved on and agreed that we are meant to be in a post oil era. It is Kachikwu – who is her colleague – that often says ‘oil got us here, oil will get us out of it’. Well, he’s an oil man and can be excused. After all they say that for someone whose only implement is a hammer, every problem looks like a nail. Madam Kemi should not assume that we think like that. And that thinking is thoroughly flawed. Oil cannot get Nigeria out of here. Not anymore. Oil has only ever sunk us in a hole. And for as long as we depend on oil, we shall keep sinking. We have built illusions and debts as a result of this reliance on crude oil. The money generated therefrom could never be enough for the tastes that we’ve developed anyhow. How much is the crude oil? We drill about two million barrels a day. We don’t have the technology. Those with the technology take half of the proceeds. That is on a good day. With our own half, we embark on a binge, buying everything luxurious in sight. Those ‘lucky’ to be in government first take care of themselves and all else can go to blazes. We have never planned sustainably with this resource. We never think about the future. Crude oil has only ever put us in trouble please.
  5. Then she said the only way is to borrow and put infrastructure in place. Halt! Infrastructure, even to build it, takes time. Someone said the government just needs the liquidity any which way, and for whatever purpose – perhaps for the next elections. But for anyone to say that borrowing for infrastructure is the immediate to long term solution, that person is patently wrong. Dangote is building a refinery in Lagos. How long has he been on it? He’s a private sector guy. He works with speed. But there’ll be learning curves. The same Dangote abandoned his tomato processing company in Kano. Is it that our government people have never run businesses before and so make all these crazy assumptions? What is going on? To put in infrastructure, start producing and get the economy to work again, we need at least five years ma. So why are we not thinking deeper into finding immediate workable solutions? I have a few ideas about how this can be done. I have offered them to the Buhari team before. No need to repeat them here.
  6. I want to restate here that this fixation on infrastructure is a shallow idea and will not take this country anywhere. As a matter of fact, we should have in this country MAINTENANCE BUDGETS for the next four years that will focus us on getting value from what we had built in the past. We can then free up money and concentrate on making life easier for the people, who have been entirely dehumanised by our perennial brainless policies. In other words, we needn’t be looking for money all over the world to build infrastructure. We are presently sub-optimising the infrastructure we have because of ego-tripping and indiscipline. How many states that cannot pay workers’ salaries built airports solely for the use of their governors in the last few years? Our leaders and elites are just simply being wicked. I read somewhere recently about the indoor wing of Abuja Stadium where reptiles and scorpions have chased the staff away – including the minister – simply because no one had plans for clearing the surrounding environment. Okey Ndibe just wrote an article about how ugly Nigeria looked in its length and breadth and our romance with pure water sachets and other items that are non-biodegradable. Simon Kolawole wrote too about “Tell-tale Signs of Underdevelopment”. I have agonised over the issues they raised for too long. I just cannot understand how deaf, dumb and blind we are to the real issues. If we borrow that money it will be one of the last things Nigeria does before its breakup. Our big men will line up and clean out and walk away, leaving the people to carry the coffin.
  7. I recently drove past a government parastatal and because of the Harmattan, one could see how many cars they had in their car-park which hadn’t been used and so were unwashed for weeks. Without exaggerating, one will easily see up to 100. This parastatal has another budget for new cars in this year’s budget, just as they had last year. The budget for cars and maintenance this year for all the MDAs is close to N30 billion. Why can we not use what we have for another two years. Yes, stretch it. If they break down on the road, let them break down. Why have we become slaves to drivers who deliberately screw up the cars that we buy for public officers such that they have to buy new ones every other year? Can we not free up this monies for what really matters? Must we borrow? Many newspapers have called the attention of this government to the low quality of the 2017 budget. Eze Onyekpere of Centre for Social Justice is running a series on the wasteful items. Madam, before your borrow, let us first overhaul the way we budget. Our civil servants and appointees – especially those at the top – have always budgeted for their own convenience and comfort. 50 percent of our budget is inefficient!
  8. Recall what happened years ago. Nigeria managed to exit its major borrowings in 2006. We paid $12billion at an equivalent of N120, having to cough out N1.44 trillion. When we contracted the loans in the 70s, 80s and 90s, the naira was mostly at par with the dollar. Please what kind of advise are we giving to Buhari, a man who rode into government on the back of so much love and trust? Why is he turning out to be the undertaker of this country, turning us over to the vultures? If we suffered that much under a regime where 120 naira exchanged for a dollar, what will happen now that naira is nudging N500 to the dollar? Even at 305 or whatever rate the government alludes to, things are dicey, and in terms of price discovery, any market player will tell you that the black market rate is indicative of the future. In other words, the naira will still officially devalue, after all we are all over the place looking for loans. A country looking for loans MUST devalue its currency. That is a key condition. Even the UK was forced to do that by the USA after the second World War. No mercy.
  9. All sorts of shady deals are still going on in this country. We are looking for dollars, but are unable to tame our Bureaux de Change. Over 3,200 of them still exist, collecting dollars from government every week; hard won dollars, and round-tripping for huge spreads while the common man cannot get the currency for legitimate needs. We are suffering and Buhari feigns unconcern. These smart and connected guys are ripping the innards off Nigeria’s finances right under a so-called Mr. Integrity. Many big men are moving around trying to obtain their own multiple licenses. Madam, a reform of this will save us the borrowing. Don’t do this to us please. I know that the CBN tried to stop this, but got no support from the president. It is back to free-for-all. The entire UK has only 125 Bureaux de change or Currency Exchanges. The entire New York has 45. But here, it is as common as mama put. Nigerians are destroying their own country. And government looks away.
  10. Madam, who says that we must get dollars before we issue naira? Naira is a sovereign currency. If only we had done a honest job with the ghost workers and we could ensure that people who are employed by government actually earn their keep, there would be nothing wrong with printing naira to pay. We could have done that from Day One and suffered inflation while ensuring our people had effective demand, and the economy could be reflated. Buhari prevaricated. And we ended up devaluing instead, and importing the inflation from abroad. Rather than only inflation, which we could have targeted, now we have Stagflation, because your policies killed and is still killing industries. Yes, if you print to pay local contractors we will only suffer inflation, but banks will not be tottering on life support as they are presently. This government has played a wicked brand of economics, and now it wants to borrow!
  11. What about progressive taxes? What happened to the luxury tax that Okonjo-Iweala proposed? Of course because it pertained to big men nothing has been heard anymore. Nigerian big men protect themselves no matter what. Are the big men ready to pay taxes on the big cars they drive? No way. Auntie Kemi, you’re a Londoner. You know how they raise money there to fund the government each year. Does the UK go around shopping for loans? The crude oil in the North Sea is not even as significant as ours. The UK feeds off the City and Canary Wharf, plus taxes which organise society. You know this more than I do. Where are the Inheritance Taxes? How come Capital Gains Taxes have been rubbished in Nigeria? The FIRS is under your purview ma. Why are we doing this to ourselves?
  12. Hear what presidential candidate Muhammadu Buhari said in London in February 2015 and see whether there is anyway we could have reordered our priorities today and spent less on frivolities:

“One of the major killers of our economy, apart from corruption, is waste… Let me give an instance: presently, there are more than 6 aircrafts in the presidential fleet. What do you call that? Billions of naira is budgeted every year for the maintenance of these aircrafts, not to talk of operational costs and other expenses. You may want to ask what a Nigerian president is doing with so many aircrafts when the Prime Minister of Britain flies around using the same public aircraft like an ordinary Briton. Go and check and compare with that of any developed country in the world: the office of the Nigerian president is a very expensive one in spite of our high level of poverty, lack, and joblessness. Despite all this, you still find a Nigerian minister spending about N10 billion to charter an aircraft for just one year. Now, for me, when we come into office, all this waste will be blocked and properly channelled into our economy. We intend, for instance, to bring back our national carrier, the Nigerian Airways. We shall do this by bringing all the aircraft in the presidential fleet into the Nigerian Airways and within a year increase the fleet to about 20. What is the difference between me and those who elected us to represent them? Absolutely nothing! Why should Nigerian president not fly with other Nigerian public? Why do I need to embark on a foreign trip as a president with a huge crowd with public funds? Why do I need to go for foreign medical trip if we can make our hospitals functional? Why do we need to send our children to school abroad if we can develop our universities to compete with the foreign ones? This is not my struggle. It is our collective efforts to save Nigeria from those who have failed us for 16 years.”

Like Nigeria, Like Pakistan

In case you don’t know, this country mirrors Pakistan in almost everything, including jagajaganess. You see, the Brits colonised India and through their East India Company, they made a huge success of it (for themselves). From India they came to Africa. India then was so large, such that after independence they had to break into smaller countries; Pakistan, Bangladesh, Sri Lanka. India today is still large; the second largest in the world by population. But today, India is the fastest growing country on earth by GDP. Narenda Modi came in with what is simply a relatively more honest leadership. He leads by example. Cleanup India is one of his initiatives. He means business. We are a tenth their size in population.

But somehow, it is Pakistan that we are mirrored after. Somehow a lot of our military men in the colonial days got trained in Pakistan. It is as if Nigeria’s umbilical chord is buried in Pakistan. We have made all the mistakes Pakistan has made – including terrorism and religious crises.

Just last week, this is what came out in the Economist magazine about Pakistan. The article is titled “Pakistan’s Misguided Obsession with Infrastructure”. It chronicles the endgame for you; that building infrastructure can be a wild goose chase, and often delivers suboptimal results. In Pakistan, huge spending, over the decades, on infrastructure has not delivered the promised economic growth. That is even where they get things right. They are corrupt in Pakistan, but not sickly corrupt like we here. In this country, more than half of your $30 billion anticipated loan will disappear down private pockets. You want to bet on it? Since you will not even name the ghost workers, I don’t see you fighting corrupt powerful men who are already eyeing your $30 billion. Just take pity on us. What we need in Nigeria is infrastructure that will deliver knowledge transfer; stuff we can truly own and replicate. What we are doing here for now, at best, is importing stuff for a short while and creating the illusion of progress. Everytime I pass by a power generating set, it occurs to me that it is a temporary solution. In a year or two, all of these generators will break down and we have to import new ones. The budget for generators for all MDAs this year is anything like N5 billion. The infrastructure you want to import for the cows of Taraba are going to be exactly that way; we just buy stuff from the world. We create absolutely nothing!

Anyway, please learn from Pakistan, let me quote some parts of the Economist article which came out on January 20, 2017. Hopefully for people who shout infrastructure, they may have a rethink. There are better ways to think, simple;

“Pakistan’s infrastructure is underused because the economic boom it was meant to trigger has never arrived. Over the past three years the government has successfully staved off a balance-of-payments crisis, achieving some measure of macroeconomic stability. It has trimmed the budget deficit, partly by broadening the tax take and partly by cutting energy subsidies. That, along with lower oil prices, has narrowed Pakistan’s trade deficit and allowed it to begin rebuilding its foreign-exchange reserves. The stockmarket has risen by 50% since the end of 2015.

But terrorism and insurgency have put off investors, both foreign and domestic. The country is also held back by inefficient and often cartelised industries, which have fallen behind rivals in India and Bangladesh. Exports, 60% of which are textiles, have been shrinking for years. Much more needs to be done to create an educated workforce. Almost half of all those aged five to 16 are out of school—25m children. Health, like education, is woefully underfunded, in part because successive governments shy away from taxing the wealthy. Only 0.6% of the population pays income tax. As the World Bank puts it, Pakistan’s long-term development depends on “better nutrition, health and education”.

Madam Kemi Adeosun, from the bottom of my heart I beg you, please drop this idea of a $30 billion loan. Don’t be the tool that will destroy Nigeria. Thank you.

by Tope Fasua

Tope Kolade Fasua is a Nigerian ex-banker, entrepreneur, economist and writer with 28 years of work, business and policy analysis experience. He is the founder and CEO of Global Analytics Consulting Limited, an international consulting firm with its headquarters in Abuja, Nigeria, and footprints in the United Kingdom, USA and United Arab Emirates. Fasua has authored numerous columns on newspapers and six books. He currently keeps regular columns on policy analysis issues with Premium Times and Daily Trust newspapers.

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