THE BOASTFUL PROFLIGATE DEBTOR
Austin Isikhuemen harps on the need to cut the costs of governance
Borrowing is a universal phenomenon. It happens because the resources of the earth are not evenly distributed, neither is the capacity of individuals and nations the same. Some are rich and some are poor. Needs also vary. The richest may also need to borrow to meet exigencies that his extant resources are insufficient for and so, he borrows in the interim to meet the shortfall. One underlying principle in borrowing is that what is borrowed must be repaid under agreed terms. These terms, including timescales, can only be varied with the lender’s concurrence and through threats by the borrower.
A lender has a stake in the success of his debtor because such success enhances the chances of repayment. It is therefore incumbent on the lender to watch closely the lifestyle and business performance of his debtor and to ensure the funds borrowed are not deployed to purposes different from the agreed objective. An agricultural loan deployed by a borrower to marry a new wife is obviously unlikely to be repaid as the marriage does not yield the crops whose sales proceeds would have aid repayment. A sincere borrower therefore meticulously deploys such borrowed funds towards a project that would yield enough profits to enable him to repay both principal and interest as well as make a profit for himself. Such a borrower also strives to live within his means without displaying unnecessary ostentation while the loan is yet to be repaid or the need for further loans is imminent.
Nigeria was known for being very generous with her resources when the going was good. At the time the country was awash with petrodollars, did our head of state not pay the salaries of public servants of a Caribbean country that was in financial distress? Did the same head of state who fought a 30-month civil war without borrowing not also say that Nigeria’s problem was not money but how to spend it? At the time we ran into debts starting from the Shagari era till Obasanjo’s second coming, at least Nigeria lived moderately as expected of the massive debtor that she was. Before then, as head of state, OBJ had, on realizing that Nigeria was not as wealthy as she used to be, instituted what he termed “low profile”. He cut down on wasteful spending and promulgated a policy on government vehicles making the Peugeot 504 the highest car government officials could use as an official vehicle. General Murtala Mohammed’s official vehicle was a Mercedes Benz in which he was shot by Buka Suka Dimka. General Obasanjo followed the same policy by using the same Peugeot 504 that others used as head of state! This was before he handed over to President Shehu Shagari.
The massive display of opulence by public officials started during the quasi-miliary-civilian experimentation under General Ibrahim Badamasi Babangida popularly called IBB. I recall clearly that the very first Governor to buy and use an SUV as an official car was Chief John Oyegun, the first elected Governor of Edo State. I still recall reading in a national newspaper how other governors of that era gathered to admire the car at a meeting at the State House. The craze caught on and has never ceased ever since. Prado is now considered too cheap for public officials and the latest Land Cruisers and Lexus are the official vehicles in vogue.
The current government came into office at a time when Nigeria has used the previous eight years for unbridled borrowing with a worse-than-rubber-stamp parliament that appeared to feel uneasy whenever a loan request was not under consideration. The speed with which loan approvals were given to the Executive gave the impression that loan processing was the primary objective of the National Assembly. Every new approval given appeared to increase the Senate President’s ranking so much so that he was eventually announced as the consensus presidential candidate of the ruling party before Jagaban and the El Rufai collective put sand in his garri.
Nigeria’s debt profile, according to the debt management office, was approximately N12.12 trillion as of June 2015 when the last government effectively took over from GEJ. By the time PMB’s government was handing over, it was projected by the DG of the Debt Management Office that the country’s debt would be 77 trillion naira, a whopping 66% increase. The current regime therefore came into office with a suffocating debt albatross. One will therefore expect the elected and appointed officials, as well as the bureaucracy, to take this sobering state of affairs into consideration in the way they carry on. Nigeria cannot afford to annoy the lenders else they refuse likely requests for rescheduling and the inevitable loan requests in the near future. But the optics right now do not indicate that our public officials are conscious of this.
A key indication that the borrower is living above his means is the N70 billion allocated for the purchase of SUVs for members of the National Assembly. Just imagine if that money was deployed to a productive venture that would generate jobs or provide cheap food for the people! And they those cars would be changed in the next four years! What if our government changes the write-off period to five years instead of four in light of our current economic dire straits? There is the issue of insurance practice but that is a different matter entirely. Are some people not using cars that are seven years old in their fleet? And must a government official use an SUV? What if you use a Chinese SUV, if you must? After all, you cannot use Chinese loans for everything else, get the Chinese to build your infrastructure but consider their SUVs inferior. There is an African country that has changed this silly craze about high-value cars for official use and heaven has not fallen.
The 45 ministers just sworn in who had their first Federal Executive Council meeting last week are unwieldy at a time when the country is struggling financially. Add to this the number of official aides and hangers-on appointed of recently and a lender would be aghast and start thinking he has lent money to the wrong borrower. At the time General Obasanjo decreed low profile, it was due to a realization that wastefulness would hurt the country in the long run and that the profligate days of unlimited petro-dollar inflows were numbered. The GEJ administration saw the need to cut the cost of governance and set up the Presidential Committee on Restructuring and Rationalisation of Federal Government Parastatals, Commissions and Agencies under Mr. Stephen Oronsaye. The objective was to achieve a reduction in the cost of governance through possible mergers of MDAs and other parastatals of government, many of which had similar mandates. The committee submitted a report with far-reaching recommendations. The report has not seen the light of day and Oronsaye’s travails may have been engineered by powerful interests whose watering holes were recommended for merger or scarping. This top-heavy government is the antithesis of the Oronsaye mindset. Jobs for the boys have trumped the need for cost reduction and the lenders must be watching with mouths agape.
The mobilization to attack Niger Republic in order to dislodge the Tijiani junta that kicked out President Bazoum on July 26 2023, looks like another costly gamble in the making. It has the hand of Nigeria but the voice of ECOWAS (CDEAO in French). Pray, who is ECOWAS without the Nigerian muscle and economy. This is not to underrate the other countries which, as sovereign entities, have the same vote in the community of 15 members. Now, with Mali, Guinea, Burkina Faso and Niger out of the equation, ECOWAS is left with 11 members. Of these, I am wondering about the level of financial support and military contribution expected from the Gambia, Togo, Cape Verde, Benin Republic, Liberia and Sierra Leone. Even the Ghanaian economy is in an Akufo-ic comma at the moment. It therefore means our oil subsidy removal savings could be directed towards fighting Macron’s war in Niger. I wonder how our lenders would see such (mis)adventure at a time when the judiciary is still awaited to pronounce on the health and genuineness of our democracy and the processes of the last choice-making.
There has been only a minor practical sign so far that indicates that the government may be aware of the need to cut costs and that it needs to lead the charge by displaying exemplary commitment to such a critical imperative. This is the news that the President has given a directive to reduce the size of the entourage going to New York for the United Nations General Assembly. Such travels have been, in the main, to provide an opportunity for estacode for favoured officials and hangers-on. Only very few officials have real work to do yonder. Others go to shop and see the Trump Tower in Manhattan. Every estacode dollar received now equates to about eight hundred naira! I wish it was possible to get all attendees to write reports on their achievements at the jamboree for publication for Nigerians to read! So, this general order by the President, welcome as it is, would be scrutinized by the public at the execution level.
Can we repair our horrible roads and stop using their poor state to justify the purchase of SUVs by every government official? Are government officials conscious of the cost of fueling those fuel-guzzling V8s and would they fuel those cars for long journeys at their own expense at this post-subsidy time? An SUV of 90 litres capacity for a journey from Lagos to Akure now costs N51,000 naira to fill at N568 a litre. Pre-Tinubu, it was a mere N16,650. If you, or your aides, merely collect and process fueling receipts for such journeys, you are unlikely to know and feel that a smaller car would cut that cost by 50%. If you forgo the purchase of such a fuel-guzzling expensive V8 Landcruiser for a smaller Camry or Innoson car, you are likely to save your ministry, and Nigeria or your state, two-thirds of the running cost of such wasteful behemoths. And do not forget that those our officials go to negotiate loan agreements with or put bluntly, those we go to borrow from, more often than not, drive smaller cars and may even ride on the public train to get to their meeting venue. The last time around, we were told that if do not kill corruption, corruption will kill us. This time my admonition is: If the government does not cut costs, costs and corruption will cut its throat. The citizens’ throats are already too parched as it is.
auxtynisi@yahoo.com
