Presidential Aspirant:  Nigeria’s Back to another Debt Trap

*Faults disbursement of recovered $322m loot

By Ndubuisi Francis and Udora Orizu in Abuja

A presidential aspirant on the platform of the Abundant Nigeria Renewal Party (ANRP), Mr. Tope Fasua, at the weekend expressed concern that Nigeria has slipped back into another debt trap after it successfully exited the Paris and London Clubs of creditors in 2006.

According to figures made available by the Debt Management Office (DMO), Nigeria’s total public debt stock stood at N22.38 trillion as at June 30, 2018.

In an interview with THISDAY, Fasua, who is also an economist noted that although the federal government’s new preference for more foreign loans as against domestic borrowing might seem plausible, the country’s debt profile could balloon to unimaginable levels should Nigeria face another economic pressure that leads to the devaluation of the local currency.

He pointed out that in such a scenario, the foreign component of the loans will shoot up astronomically.

“Clearly, we are back in another debt trap. Now, there are some aspects that you have to consider. The strategy of the present government under the minister of finance is to move our debt from domestic to foreign. She believes that domestic debt is expensive which is true, but the risk of foreign debt is also worth the current exchange risk because part of the reason why our debt ballooned is because they devalued from the N177 or so to the dollar under Jonathan.

“This government devalued to N305 so the foreign component of the debt went up by more than 70 per cent. So, if we continue with this risk, you need to ask yourself: do you know what you are doing, because if this economy comes under another pressure that causes us to devalue again, we will be owing over $100 billion or more which we have never done before.

“So, you see, it’s down to the incidence of thinking, where the Minister of Finance, Kemi Adeosun, was saying rhetorically that if we introduce taxes, you guys know what will happen and I’m wondering that if it is legal and in the law books of this country that we should have taxes, who is she to say we will not have it?

According to him, the role of the minister “is to introduce the taxes, enforce the taxes no matter what anyone says,” adding that the legitimate taxes, the fees, rates, duties, fines and every other revenue that is due to government,” Fasua who is also the Founder and Chairman of ANRP said.

He recommended that all ministries, departments and agencies (MDAs) should publish comprehensive annual financial reports (CAFR) in newspapers, noting that if this was done, “We can actually run away from this idea of living on debt.”

He argued that at the national level, the government is confusing the ability to borrow with that of earning.

“Borrowing is not a first line of revenue of a government. You don’t finance any sort of infrastructure; infrastructure that you should be financing is the one that can at least pay themselves back to a large extent. If you are financing an infrastructure that you can’t tell where the cash load is, then you are in trouble.

“I will say let us get our acts together, let’s get our acts right. Borrowing is not for every kind of infrastructure. It should be for infrastructure that has cash flow attached to it,” the presidential aspirant said.

On the recovered $322 million Abacha loot, which the federal government claimed to have disbursed to the poor, only to go and take a loan of  about the same amount, Fasua stated that  government has not been doing things that make sense.

“I questioned their attempts or whether they are already implementing it but I think they are being fraudulent about it that’s just the truth. Being fraudulent in telling us that they have been disbursing money under the table to some people who are poor, who we don’t even know the criteria used to determine who is poor and I have not seen anybody collecting.

“We should let Buhari know that the fact that they are in government today doesn’t mean that they own Nigeria forever. That fund was stolen from the whole of Nigeria and he denied it. He believes that Abacha was his boss; Abacha was never wrong, Abacha didn’t even steal money. So, if he believes that’s the case and they now dropped the money which is still Abacha’s money and you say you want to use it to go and pay people.

“Even if the people abroad (because I heard that the Swiss people or whoever it was) told them that’s how they must spend it and that’s what they agreed. Those people (of course they don’t even like us). They don’t have respect for us because our leaders stole money and came and kept it there. Who tells you that they are interested in us making real progress. I can’t imagine that you say you will give it to people so that they can eat for no work done.

“You give people money, nobody can verify, nobody’s knows how you arrived at that decision and just for them to feed. I mean, after feeding, what next when there’s work to be done?