Nigerians have lost faith in the National Assembly; the members of the two legislative chambers are seen as just a bunch of people feeding fat on the nation but the Senate seems to have wakened from its slumber by with-holding approval for President Muhammadu Buhari’s $30 billion external loan plan.
About 10 years ago, under the former President Olusegun Obassanjo’s administration, we were regaled with countless rhetoric on the benefits of the payment of $20 billion to the Paris Club and London Club of Creditors to settle our foreign debts. This transfer of wealth by a relatively poor Nigeria contradicts the entire prudent financial judgment and rudimentary economic disposition preached by the rich donor nations that babbles about the ills of capital flight in developing nations.
We made the payment and got a phantom $18billion debt relief for Nigeria from the Paris Club of Creditors, which became the inducement for the country to pay off her $36 billion foreign debt. Nigeria’s total foreign debt stood at $35.916billion as of June 2005. The largest chunk of the debt $31billion was owed to 15 of the 19 creditor-countries of the Paris Club.
On the global financial scale and rating, there is no doubt that Nigerian payment of her debts makes her a credit worthy nation with – BB- rating from Standard & Poor’s. But for a country with enormous internal economic problems; with 70% of the population mired in penury poverty with increasingly educational and health challenges to repatriate such a wealth to the west is not a prudent decision. Without doubt, Nigeria was compelled to do so by those nations that supposedly are the partners in fighting poverty in Africa.
In 1985, Nigeria owned $8 billion to Paris club creditors, out of $19 billion of its foreign debt. By the end of 2004, Nigeria owned Paris club $31 billion out of $36 billion of its foreign debt. Since 1992, Nigeria has not received any loan from Paris club. So, where is the justification for the increase of the debt? Blame it on the malleable interest rate, interest arrears and interest charged on the arrears. Maybe the political and monetary instability did contribute to the debt increase, but it is beyond the control of poor Nigerians who bear the brunt of poverty. The Paris Club would have cancelled the total debt, rather than requiring for the debt buy back of the 40% of the remaining debt.
The billions of dollars that Nigeria paid was larger than the donations the rich nations will be providing to poor countries in a period of ten years. The money paid to the rich nations of Paris Club and London Club of Creditors would have found its best use in Africa, if not in Nigeria.
The celebrated China deals has turned out to be another mirage. This notion that we can depend on foreign nations to solve our economic problems must be jettisoned as the terms will always favour them. We never get anything right, the good intended idea of sovereign wealth funds was bungled by unnecessary politicking, other nations with pragmatic leaders have sovereign wealth funds which can be used to offset situations as the such we are in. China has $1.5 trillion, UAE $1.2 trillion, Norway $885 billion, Saudi Arabia $750 billion and Kuwait $590 billion as the top 5 countries in the world with the highest sovereign funds.
Now, here we go on another voyage of external borrowing-$30 billion. The leadership of the country has continued to mortgage our future. We will gladly sell us into slavery for eons. Subsequent governments have failed to plan for the future. It is a jungle of self enrichment and corruption all in the name of servicing the people.
One begins to wonder if Buhari’s much touted socialist disposition is not just a façade. This administration seems to be bereaved of ideas on out to turn the economy around, its vibes is filled with cacophony of conflicting signals. The shoddy handle of the naira has rendered it valueless.
The rejection of the $30 billion external borrowing should not just be a bluff by the Senate. It should be a standing position of the National Assembly. Profligacy and waste in government is still as rampant as yesterday, and the Senate is inclusive going by the show of shame and shenanigan exhibited in Switzerland few days ago.
The justification that the loan request was rejected due to what they called “lack of documents supporting the request as referenced in the letter”, was too flimsy. They should reject the request because it will spell doom for Nigeria. The fact that we are in recession and things are pretty difficult is obvious to all. Let’s weather the storm, keep our heads up and be ingenious in the way we address the problems facing the country. The loan path is the easiest route we must all reject. Suffering can only make us wiser.
