June 13, (THEWILL)- Nigeria marked another Democracy Day on Saturday, June 12 to celebrate the nation’s burgeoning democratic experience. Without any iota of doubt, the democratic journey for the country has not only been tortuous but frustrating at the same time. More disappointing for most Nigerians is the fact that 22 years into the democratic journey, the most populous black nation in the world is walking a tight rope as its economy is on life support. Aside from the glaring infrastructure deficit, the aching spot is the acute revenue shortage. Yet, the country sinks deeper in the miry clay of debt. At the same time, the culture of waste, kleptomania and corruption persists. This demands urgent action to save the economy from possible implosion as the volatility associated with oil price in the international market is real.
Nigeria’s debt profile is mounting precariously with little revenue cushioning effect. Latest data by the Debt Management Office (DMO) shows that the country’s total public debt portfolio (for states and federal government) as at December 31, 2020 is N32.91 trillion. This is N20.31 or 161 per cent higher than N12.6 trillion in 2015 when the Muhammadu Buhari-led government was first inaugurated.
Government officials use any opportunity to convince Nigerians that the nation’s fiscal challenge is not debt but revenue. This argument is considered corrugated by many. How can you borrow above your revenue capacity? Why invest on huge infrastructure projects that would not generate the revenue to pay back the debt? What is the rationale in borrowing for recurrent expenditure, especially payment of salaries? Most worrisome: Why is your recurrent expenditure window increasing and widening amid revenue challenges?
Since 2016, the Nigerian government has not achieved its revenue budgets, while recurrent expenditure is fully executed as a matter of ritual. Based on the 2017 Budget Implementation Report by the Budget Office, for instance, out of N5.084 trillion projection of Federal Government retained revenue, only N2.37 trillion was realised, representing 46.75 percent performance.
On the expenditure side, the combined executed personnel and debt servicing budgets amounting to N3.50 trillion exceeds the overall realised revenue by a whopping N844.88 billion. This implies that Nigeria used borrowed funds amounting to N844.88 billion to pay salaries and service debts. This is part of the overall N2.5 trillion borrowed to fund the 2017 budget (made up of N1.3 trillion from domestic and N1.2 trillion from external markets, respectively).
Further analysis revealed that the overall borrowed sum of N2.5 trillion was more than the net increase in lending to the private sector in 2017 by the deposit money banks. In the final analysis, the government carried a debt burden of N1.3 trillion it could not resolve in 2017. The quagmire arose from the fact that the N2.5 trillion it borrowed from banks to finance the budget was short of clearing the N3.8 trillion arising from expenditure that overshot revenue.
This is an example of Nigeria’s fiscal challenge that has dovetailed into a high debt profile which now consumes about 80 percent of revenue annually for debt servicing. The consequence is that the capital expenditure which should drive the economy through viable infrastructure development is abandoned. This creates negative macroeconomic circumstances such as rise in unemployment, inflation, misery index, insecurity and drop in standard of living.
Former Governor of Anambra State, Peter Obi, at a recent webinar organised by the Association of Securities Houses of Nigeria (ASHON), stressed that the government’s borrowings should be targeted at development of the productive base of the economy, rather than supporting or supplementing consumptive tendency.
The limited economic linkage of the huge project compared to the benefit of investing the resources in power generating plants, for instance, can be imagined. A shock in oil price in the international market will result in economic upheaval that will trigger disruption in productive activities, job losses, drop in tax revenue and high inflation; but debt obligations must be met.
The DMO has blamed COVID-19 for the recent rise in government borrowings. Government recently disclosed that it would convert the N10 trillion loans it owes the Central Bank of Nigeria (CBN) into a 30-year bond. The ‘indebtedness’ to the CBN was largely by Ways and Means advances.
In many cases, the much-touted infrastructure ends up an expensive, wasteful and corrupt-ridden social project. For instance, the Abuja-Kaduna train, for a long time , reportedly consumed fuel worth three times the ticket revenue realised in a month. Interestingly, e-ticketing has been introduced to correct the anomaly. Little is known about the cost-benefit or return-on-investment outcome of the Kano-Maradi (Niger Republic) $1.9 billion railway project flagged off by President Buhari in February 2021 being executed with public debt.
Recent report by the National Bureau of Statistics showed a 60 per cent drop in capital inflow in 2020 from $24 billion in 2019 to $9.7 billion in 2020. The country’s foreign trade also dropped by 10 per cent to N32.42 trillion in 2020 from N36.15 trillion in 2019. Total exports dropped by 34.8 per cent from N19.19 trillion in 2019 to N12.522 trillion in 2020.
Unemployment rate climbed from 27.1 percent in Q2 2020, to 33.3 per cent in 2020 – the highest in over 13 years. Inflation soared to 17.33 percent in February – the highest in four years, as against 16.47 percent in January 2020. The economy needs to be re-tuned to avoid the damage that a huge debt profile with inadequate revenue stream will create.
The President of the African Development Bank (AfDB), Dr. Akinwunmi Adesina, in January 2021 cautioned Nigeria on its ballooning debt profile, noting that the country’s debt servicing obligations posed the greatest risk to the economy. Akinwunmi spoke at the First Annual National Tax Dialogue organised by the Federal Inland Revenue Service (FIRS) in Abuja.
While passing the 2021-2023 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF-FSP) in October 2020, Senate President, Ahmed Lawan, bemoaned the Federal Government’s unbridled appetite for debt to finance projects.
“There are projects that I feel we should ensure we don’t borrow to fund. We should explore other opportunities in sourcing funds such as the Build-Operate-Transfer (BOT), Public Private Partnerships and so many other options. I think we should explore those so that we minimize the borrowing,” Lawan counselled.
The International Monetary Fund (IMF), in March 2018, warned that Nigeria and other Sub-Saharan African nations were at growing risk of debt distress because of heavy borrowing and gaping deficits. The resident representative of the Islamic Development Bank (IDB) in Nigeria, Abdallah Kiliaki, at a meeting with then Senate Committee Chairman on Foreign and Local Debts, Shehu Sani, in 2016, observed that although Nigeria’s debt-to-GDP ratio was low at 17 percent, resources being used to pay the debts were enormous going by percentages taken on a yearly basis. He added that Nigeria spent 80 percent of her revenue on debt servicing, cautioning the country against getting herself suffocated by such huge debt servicing with limited resources.
However, the Federal Government thinks otherwise.
Nonetheless, Nigerians have been reacting to the much-flaunted democratic journey of Nigeria, saying it is not yet Uhuru for the country. With the Buhari Administration in the mid-term of its second tenure, after spending a cumulative six years in power, there is so much despair and frustration in the land. The general insecurity, kidnappings and banditry across the nooks and crannies of the country have exposed the helplessness of the government thus compounding the woes of Nigerians.
IT’S A HUGE JOKE – BODE GEORGE
For the former Deputy National Chairman of the Peoples Democratic Party, Chief Olabode George, the celebration of Democracy Day is simply a ‘huge joke’.
He maintained that those elected into various offices in Nigeria have emerged through a rotten process, saying if they have emerged through a rotten process , what comes out of that?
“There has not been a thorough election. Those people in INEC can also see that their families too are suffering now. The people you claim you elected , somebody selected them and paid you. We are deceiving ourselves, that is why there is nothing impactful in the so-called democracy here. We say we are celebrating democracy day. It is a joke,” he told THEWILL, adding, “I have been saying it and I have been happy to hear that the INEC is now saying that we want to go digital to modernise our electoral process. Until we do that, we are deceiving ourselves.”
NOTHING TO CELEBRATE – STEVE ALUKO
Steve Aluko of the Civil Societies Organisation, Jos, Plateau State, affirmed that “There is nothing to celebrate.”
Aluko said, “Everything that June 12 stands for has been compromised by the same people that are calling on us to celebrate it. The same people in government now have never believed in June 12, which they are promoting now for political reasons. They can’t be celebrating June 12 when there is no local government autonomy; local government elections are not held when due; elected councils are dissolved at will with executive impunity; and there is no security of lives and property. June 12 is rather a moment for sober reflection, especially now that things have gone so bad, and government and governance have failed to guarantee the welfare of the people.”
ALL THE GAINS HAVE BEEN RUBBISHED
– ADAMU MADAIKI
A lecturer at the Faculty of Law, University of Jos, Adamu Madaiki, also maintained that there is little to celebrate, especially from 2015 to the present day.
“All the gains of 1999-2015 have unfortunately been rubbished by the present dispensation. The rule of law as a hallmark of democracy is no longer there and the electoral process is so badly flawed that elections no longer give the people hope and opportunity to determine their affairs by actually choosing who presides over them. So, I think there is very little to celebrate on June 12 as it is idleness,” Madaki told THEWILL.
NIGERIA’S DEMOCRACY STILL AT TEETHING STAGE – SULE YAU SULE
Dr. Sule Yau Sule, a senior lecturer at the Mass Communication Department of the Bayero University, Kano, thinks democracy is still in its teething stage in Nigeria. Sule, who is a former media adviser to former Governor Rabiu Kwakwanso, says, “We should be talking about Democracy Day with mixed feelings because it has provided us an opportunity to progress and have infrastructural development. But at the same time, it is giving people the opportunity to engage in activities that are inimical to national unity. Anyway, it is a learning process for many because up till now most Nigerians do not understand what democracy means, including our leaders. Why for instance should state governors corner allocations meant for local government areas? That is where the dividends of democracy mean more to the people.”
FRUSTRATING TIMES FOR ENTERTAINERS – BOB MANUEL- UDOKWU
Actor-cum-politician, Bob Manuel-Udokwu, believes that President Muhammadu Buhari’s tenure has not impacted anything positive in the entertainment industry.
“Things are now more difficult than before and this has to a large extent affected the industry, which is now comatose thus leading to unimaginable frustration and despair for entertainers.
“People are no longer working. If you check the pages of newspapers, you will see that practitioners are dying. The situation is really bad. This administration has not favoured the industry. It is really terrible for the entertainment industry,” he said, in an interview with THEWILL.
So, I think there is very little in celebrating June 12 as it
INSECURITY, KIDNAPPING NOT HELPING MOVIE MAKERS – NWABUEZE
But Chinyere Nwabueze, an actress/movie producer, says most movie producers now rely more on digital marketing, especially for movies shot in Asaba, Delta State as the second coming of the Muhammadu Buhari administration has caused piracy to die a natural death.
“Industry practitioners no longer have to grapple with the menace, unlike before when at the stakeholders lost millions of naira to piracy. Also, the increasing spate of insecurity and kidnappings has greatly hindered movie-making as this requires a lot of travelling from one location to another.
“Nobody wants to be caught in a cross-fire or kidnapped on the highway while travelling to different towns to shoot movies. And so, most movie producers in the South-East now prefer to bring their productions down to Asaba to shoot, but the number of movies they shoot is few and far between, unlike what was obtainable in the past,” she said.
REMARKABLE RESILIENCE FROM WRITERS, ARTISTS
Most African governments are notorious for not caring much about the arts, literature and culture though they claim to be only when a writer wins some international recognition. It has been so with Nigeria. It is on record, for instance, that former President Olusegun Obasanjo presented former French President Jacques Chirac with some art works during a state visit to France.
Despite all that, artists, writers and those in related professions have done well for themselves individually. More books have been written by Nigerians home and abroad, such as Helon Habila’s ‘Travelers’, to cite one example. Exhibitions have taken place, too, despite the COVID-19 restrictions. What it all means is that, despite lack of government encouragement and patronage, Nigerian writers, artists and culture workers have shown remarkable resilience against all odds.
Most impressive of all is the imminent return of looted art works from Benin during the massacre in 1897 when the British invaded and stole many works of art from the ancient kingdom. Those in the know say they will be returned in batches from both private collections and public galleries and museums where they have been for centuries. It is something to be cheerful about.
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