Wasted: The London Paris loan refund windfall

Even at the height of endemic profligacy which unfortunately is increasingly becoming the hallmark of much of governance in Nigeria, the release under any circumstance of billions of naira to state governors to spend as pocket money, is difficult to justify. Yet that is exactly what the entire drama of the London Paris Club Loan […]

Even at the height of endemic profligacy which unfortunately is increasingly becoming the hallmark of much of governance in Nigeria, the release under any circumstance of billions of naira to state governors to spend as pocket money, is difficult to justify. Yet that is exactly what the entire drama of the London Paris Club Loan refund to Nigeria has eventually translated into, with the last act of the show taking place last Monday at a meeting between President Muhammadu Buhari and state governors at the Presidential Villa Abuja.  Adopting less than subtle arm twisting tactics on the President, the governors succeeded in securing his approval for their collection of the balance of the London Paris Loan Refund largesse, as he directed the Minister of Finance Kemi Adeosun, Minister of Budget and Planning Udoma Udoma and Governor of the Central Bank Godwin Emefiele to fast track and complete the exercise before the end of the year.

Ostensibly, the primary reason that may have swayed the President into conceding the release is the expectation is that the gesture would enable the governors clear the arrears of salaries and pension benefits of public sector workers as well as retirees in their respective states. By such gesture the President acted in consideration of the welfare of Nigeria workers that are caught in the vortex of crass mis-governance of states by respective governors. After all, it was the same reason of clearing such liabilities that the governors used to obtain earlier releases from the refund. However reports on the pattern of deployment of the funds after release by the various state governors fell far short of resolving the public sector wage bill in their states. Reports of massive diversion of the fund were rife as many of them treated such funds as mere pocket money for their private use.

The funds under consideration are refunds made to Nigeria by the Paris Club of international creditors following the discovery that the country was over billed with respect to its debt service obligation to the body. Avid players of the popular board game of ‘Monopoly’ as well as real life bank debtors will easily appreciate the relief associated with a bank not only writing off a loan but actually refunding the debtor some money, on any grounds. Such a dispensation is simply a windfall, an act of benevolence from nature, manifesting as financial relief for the country. In that context therefore wise counsel dictates that such a dispensation should not be frittered away on frivolous ventures, but be directed into tangible ventures with durable dividends. 

This had been the argument of many well-meaning Nigerians at the inception of the refund exercise, but as is apparent, wise counsel hardly applies to the handling of public funds in Nigeria, so the refund largesse also suffered the same fate. However if Nigerians were uncomfortable that all that the governors were targeting the funds for was just to pay arrears of salaries and pension benefits without consideration for longer lasting ends, the new reality that even the last portion of the largesse will also be designated for the payment of wages, qualifies for deeper concern. With the release of this last tranche which many have dubbed Buhari’s Christmas bonanza to the state governors, it is clear that whatever lasting dividend that should have accrued to the country from the refund dispensation has gone down the drain forever.  

This however does not mean that the last word on the matter has also gone. This is because what is being frittered away by the governors is actually the common patrimony of all Nigerians – just as is portrayed in one of the popular ‘John Ploughman’s’ parables which says that “what their fathers gathered with the rake they throw away with the shovel’.

Expectedly the situation has launched a new wave of sharp reactions, with the labour movement priming for a showdown with the state governors over utilization of the windfall for payment of outstanding salaries as well as pensions of workers and pensioners. Labour’s case is built on the fact that earlier tranches of the funds that were supposedly intended for clearing such arrears were diverted by the state governors. Against such a backdrop and the freewheeling style of the governors there is no guarantee that the fresh tranche may fare better. Hence the furor over the refund exercise is more with the utilization of the funds than ownership and the rights of the states to accessing such. This even as the former seems to dominate much of public discourse on the matter. 

To make matters worse is the cloak of secrecy with which the disbursement of the refund largesse by the state governors is exercise is shrouded with especially with some officials of the federal government seemingly acting in cahoots with the states to deny the citizenry access to information with respect to the matter.  A case in point is the reported submission before a High Court of competent jurisdiction by the Attorney General of the Federation and Minister of Justice Abubakar Malami that public disclosure of information on the disbursement by states of refund largesse was statute bound. 

Placing this scenario in context with the rapid decline of accountability by public officers in the country presents a gloomy picture of a meltdown of the core value of accountability in the public, and an upsurge in impunity by any officer powerful enough to act accordingly. For instance the Auditor General of the Federation told a House of Representatives Committee recently that the all-important Treasury Single Account (TSA) which was touted as the magic wand to streamline public finance operations in the country, has not been audited since its inception. Soon after that President Buhari inaugurated a special committee to audit the recovered stolen loot since as he put it “there were gaps” in the available records with respect to such assets. Now we have the saga of the Paris loan refund. So where is the country going with respect to the sanctity that should be accorded public resources and the common weal?

 This is where the National Assembly needs to wade in as the final ombudsman of the Nigerian people. By the provisions of the Constitution the National Assembly is equipped to investigate the issue as it is about the national debt question which falls under its legitimate purview.