NIGERIA’S RISING DEBT BURDEN
NIGERIA’S RISING DEBT BURDEN
By Eko John Nicholas
The recent $1.5bn loan collected by the Nigerian National Petroleum Corporation from both local and foreign banks, has again underscored the nation’s penchant for borrowing. The NNPC, an agency of the Federal Government under the Ministry of Petroleum, is saddled with the responsibility of managing the nation’s stupendous oil wealth. However, over the years, it has become a cesspit for corruption and mismanagement where the nation has been fleeced of several billions of dollars from the huge earnings, accruable from the sales of crude oil.
However, this is coming weeks after the National Assembly has given the federal government the go-ahead to increase the foreign debts by a questionable $7.109bn, under so-called 2012-2014 Medium Term External Borrowing Plan. By this, the federal government was granted approval to secure $4.846bn external loans, and 23 state governments were also given the nod to secure $2.263bn external debt. This despite the fact that, as at September 30, 2012, the domestic indebtedness of the federal government, according to the Debt Management Office was already N6.34tn while its external debt profile was still being determined. The external indebtedness of the 36 states of the federation and the Federal Capital Territory was put at $2.21bn (344.96bn) as of June 30, 2012, their domestic debt burden was still being ascertained.
This unbridled greed for loan acquisitions by federal and state governments at the slightest opportunity is gradually reaching a level, if nothing urgent done to mitigate it, is capable of ensnaring and mortgaging the interests of future generations in Nigeria. It was just in 2005 former president Olusegun Obasanjo excuse in 2005 to give away a whopping sum of $12.4bn to the Paris Club of Creditors in exchange for bogus debt write-off of $18bn. At a time the economy and infrastructure development in the country, were in abysmal state, and in dire need of massive investments. This resulted in cuts in social services like education and health care, with adverse effects on the already worsened living conditions of the vast majority of the people.
The spokespersons for both federal and state governments are regurgitating the stale arguments that the loan would be use for specific projects in; education, health, water supply, transport, agriculture, power generation, things that will help turnaround the economy. Sadly, past loans supposedly expended over the years on these same “specific projects” have left them in worse conditions, to the detriment of the masses. Agriculture which engages about 70 percent of the population has largely remained subsistence; education is grossly underfunded; roads/railway networks and air traffic still remain unsafe, with huge casualties being recorded every other day; health care delivery system remain poor, with government officials and their allies travelling abroad for the slightest ailments; electricity supply is epileptic; pipe borne water a luxury; and the economy is comatose, unable to absolve the huge army of unemployed youths littered everywhere across the country. These loans have largely remained a conduit for official corruption and embezzlements, the recent ones will not be exceptions.
Rather than invest the monies directly in the projects through the use of public works with the active participation of the working people to check mismanagement, they are contracted to individuals connected to the government, who either do bad job or do nothing at all. In the events, they amass billions of naira at the expense of the working people and the economy. This is predicated upon IMF/World Bank neo-liberal policies, that governments should have no business in business. Hence, the need to privatize public utilities like NITEL, PHCH, refineries etc; deregulate petroleum sector; commercialize education; down size government work force; and devalue the nation’s currency. This has meant that public properties are effectively handed over to a few hawks thereby making to wallow in affluence, while the masses live in abject poverty in the midst of huge natural resources in the country.
Labour and pro-masses organizations must vehemently condemn the plunging of the economy to another round of debt burden, and begin to mobilize workers, youths and all the sections of the working people for a consistent campaign including mass protests to stop this malady of borrowing in the midst of huge resources.
Socialists argue for nationalization of the commanding heights of the economy, with democratic management and control by the working people. This is to ensure proper harnessing of the nation’s resources, which will in turn release funds held up by corrupt individuals and big corporation for financing developmental projects and thereby guarantee basic needs for all, while making it unnecessary for government to borrow, with attendant corruption and wastage. But expecting the Jonathan/PDP government or any pro-establishment party (ACN, CPC, LP, APGA, etc) to carry out a working people program will amount to wishful thinking, as they are committed to the anti-poor, profit-first philosophy of capitalism. Therefore, workers, youths, farmers, market men and women, and poor people must come together to form their own party built on socialist program to contest and win political power in order to build a society where the needs of all form the basis of governance and economy.