Reckless foreign borrowing is a crime against humanity (II)

So I tried to dig around to see what our states are borrowing for. Leave Lagos out for a minute, but even their borrowing is problematic. Why would states like Gombe be borrowing from abroad in Dollars, to build primary health care hospitals? Why would Osun borrow from abroad, purportedly to build schools?  Why would […]

So I tried to dig around to see what our states are borrowing for. Leave Lagos out for a minute, but even their borrowing is problematic. Why would states like Gombe be borrowing from abroad in Dollars, to build primary health care hospitals? Why would Osun borrow from abroad, purportedly to build schools?  Why would Ebonyi borrow from abroad, ostensibly to build roads? 

How much sense do these make? Are these basic infrastructure not supposed to be funded from their internally-generated revenue in an organic manner? How does a road between two villages pay itself back? How much taxes can you collect from villages to convert to Dollars to pay these unforgiving lenders on judgement day? Why borrow in foreign currency to build schools, even if the borrowing is at zero per cent? How about reordering our priorities? Is it even true that these amenities are what we are borrowing for? If a governor uses the real liquidity of his state to buy exotic cars and private jets worth billions, those are really what he has borrowed for, not the infrastructure he now claims to be building.  The infrastructure seem to be afterthoughts, the real spending is in the profligacies – it’s all in the ordering.

Our current borrowings just don’t make sense. Given our past experiences and the difficulties that past loans have put us into, we should be extremely scared of contracting new ones. I am not sure the Finance Minister has been told these stories by those who know.  If these borrowings do not totally transform the lives of our people, if they don’t unlock wealth in a substantially measureable manner, if they don’t take those millions of boys and girls off the streets immediately, if they don’t transform our out-of-school-children problem, if they don’t make Nigerians suddenly a lot more productive, if these borrowings don’t transform our landscapes, if they don’t reorder even the way we think, if these loans don’t create new Nigerians, then they cannot be worth it. They say history doesn’t repeat itself, but people do. They also say those who fail to learn from their failures in the past are condemned to keep going round in circles. I think I can make a call, that we are back in the past… only worse.

We cannot afford to be taking loans on a hit-or-miss basis at this auspicious time in our history. We cannot leave things to chance. We cannot assume things would work themselves out. We have to be keen-minded and be in control of every dime. It is criminal, irresponsible and a crime against humanity to load our unborn children with a debt burden that will turn them into slaves to the rest of the world.  What is more? The fact is that most of Nigeria’s commonwealth – including these loans – always end up abroad.  Value-for-money for government projects here is about 30 per cent. The rest is stolen and sent back to the countries from which we borrowed. A lot of the loans of the Second Republic went straight back and were lost in Switzerland. I thought that was what the first coming of Buhari was about. How come he too is contracting his own at a worse time indeed?

I would advise instead, that we should concentrate for now, on driving government revenues and minimising waste. We spent recklessly through a recession in the last two years. Our politicians and top civil servants still get all their expensive perquisites because they have the powers to control the wealth and they control it to favour themselves. Our Senate says it is ‘rude’ for the taxpayers who pay their salaries to demand to know how much they collect for themselves!  And so, for as long as we haven’t solved this problem of profligacy and the overbearing influence of politics on our economics, we should not be borrowing this recklessly. If the Federal Government should even do some borrowing from aboard, states should be cautioned. And for the FG, you cannot be borrowing for some infrastrautre from abroad, when the presidency is spending close to N2 billion on new luxury cars each year, replacing cutleries yearly and splurging N67 million on internet, according to the details of the 2018 budget just trickling out. 

I also did some research and found out there has been no country that truly developed based on foreign borrowing for infrastructure. I couldn’t find any such countries in Europe or the Americas. I check South Africa and that wasn’t the case. Every country that has achieved development did so on their own dime; with money generated out of a process of organising themselves, entrenching financial discipline, and ensuring that every citizen conforms to the rule of law.  None has been as reckless as Nigeria with its finances. None has kowtowed to political bigwigs who drained its finances only to run to foreign countries in search of loans. And whether for individuals, companies or countries, the experience is the same; always easier to borrow, but grief comes when it’s time to repay.

But someone just whispered to me that those infrastructure deals are where the money is for these politicians. No wonder everyone seems to be rushing to borrow from abroad these days. It just brings back very awful memories of the Second Republic. Only that now, we are on steroids.

 Concluded.