A Jumbo loan is a bad option

 Nigeria is inching towards the path it abandoned only a few years ago when the Obasanjo administration successfully negotiated the forgiveness of part of its debts from the Paris Club. We thought we would never trudge that road again. Wrong. President Buhari is taking us back. His letter is before the Senate, asking it to […]

 Nigeria is inching towards the path it abandoned only a few years ago when the Obasanjo administration successfully negotiated the forgiveness of part of its debts from the Paris Club. We thought we would never trudge that road again. Wrong. President Buhari is taking us back. His letter is before the Senate, asking it to permit him to borrow $30 billion to fund infrastructural development projects. That is a fanciful name for roads, water, railways, energy, once christened dividends of democracy. We must have overdrawn our account in the bank of democracy for its dividends to have become so scarce as to need a jumbo loan to make us enjoy them again.

This is the real jumbo loan. When a country is in dire straights, as Nigeria is, borrowing offers itself deceptively as the only option available to it to survive. Ask Brazil. In a way, it is difficult to fault the president’s decision to borrow against the advice of Shakespeare: neither a lender nor a borrower be.

Yes, poor or stagnant infrastructural projects helped to deny our country the crown of economic leadership on the African continent. A few years ago, we watched with shock as one major manufacturing company after another followed Michelin to close shop here. They moved to Ghana and other African countries. They could take it no more. It was a national shame to see the giant of Africa left at the starting block of infrastructural development by smaller and relatively poorer African countries. They had got their acts together; we are still struggling. We would like to see Buhari commit his administration to building a solid infrastructure without which all our economic development plans would merely blow in the wind. But with a $30 loan? It makes you shudder.

We do not have details of the said loan yet. We do not quite know who is or are loaning us the money. However, last week the minister of national planning, Senator Udo Udoma, hinted that we would borrow from the IMF and the World Bank because they give out loans on “concessionary terms.” Oh yeah? By the way, I would not know if Udoma was speaking about the same jumbo package.

Surely, our leaders do not have a short memory. Surely they cannot have forgotten that in 1983, or so, the Shagari administration initiated negotiations with the IMF/World Bank for a bridging loan of $2.5 billion. Jumbo loan, we called it then; chicken feed, we call it now compared to the $30 billion. When the Shagari administration fell, its seeking the loan was held out as evidence, that it was as a consequence of its poor and mismanagement of the economy that Nigeria, an oil rich nation, suddenly became a borrower. The IMF/World Bank lends to countries under certain stringent conditions known as conditionalities. Experts among us warned us that taking the loan under those conditions would be tantamount to mortgaging the future of our country. We were frightened. 

President Babangida, who succeeded Buhari in 1985, always ahead of everyone around him, saw the mileage in ostensibly asking Nigerians to decide the fate of the loan through a national debate. The rest is history.

So, what concessionary term is the minister talking about? Has the IMF softened its conditionalities so as to make its loans more attractive?  I doubt it. I find it surprising that this jumbo loan has received a jumbo silence so far from the public. It does not seem to have excited Nigerians. I believe it merits a huge national debate. We are not just talking of Nigeria of today. We re talking of Nigeria and its future generations. A loan such as this, no matter under whatever favourable conditions it is given, is a crushing future burden on a nation and its people. Ask Brazil. 

I think the government should subject it to informed public debate. We should know and be satisfied that it has explored all the options available to it before dragging us back to the road we had abandoned. No lender loans money without imposing conditions favourable to him. Ask Shylock. Future generations would be forced to repay the loan with interest. In a year or two, the loan would balloon to one and half times the original principle. And every year, its burden gets heavier. Again, ask Brazil.

The Buhari administration means well. All borrowers do. I do not think the path to our infrastructural development necessarily lies through this loan. Given our recent history, it is clearly a no no. I waited to hear the economists wade in. So, far silence. Only the irrepressible Emir Muhammadu Sanusi of Kano, the man who loves to speak truth to power, has broken his silence over it. His criticism, as usual, was blunt and trenchant. I could also detect his veiled contempt for the economic management competence of the Buhari administration. He said he was waiting to see who would loan us the money given the poor performance of the economy. The administration might surprise him. China, the new economic imperialist on the continent, has deep pockets and a willing heart.

The emir knew he was putting his head in a hornet’s nest. The reactions from the defenders of the administration came fast and furious. An obscure group calling itself The Buhari Support Group, led by Muhammed Labbo, made a fool of itself by advising the emir to be seen, not heard. Nonsense, we are all involved in this and must be allowed to air opinions. We did not elect Buhari because we thought he was omniscient. We elected him because we believe he had the courage to do right by us by a) recovering what the late President Kennedy called the years the locusts ate and b) make this country live the true meaning of democracy.

The government should explore a home-grown alternative to this future burden it wants to impose on our children and grandchildren. The restiveness in the Niger Delta is the immediate cause of the massive short fall in the country’s revenue. Buhari should instead seek ways and means of ending the crisis there so that our crude oil can flow unhindered once again and the petrol-dollar would fill federal and state treasuries. As I see it, this does not mortgage our future. I believe Buhari has the courage to take on this sad task and rescue our country from recession and enveloping poverty.