BY JEROME-MARIO UTOMI
As a nation, Nigeria and most of its federated states are currently facing serious socio-economic issues / survival dilemmas. Although, in my opinion, it has been done overtime as a nation that plays politics with everything, we live in denial. But as it stands, it has reached the brink and the nation / states are faced with options of confession or collapse.
According to media reports on September 16, 2021, the country’s public debt stock stood at N35.465 billion as of June 30. Total public debt is made up of the domestic and foreign debt of the federal government, the 36 state governments, and the federal capital. territory (FCT). Nigeria’s total stock of public debt was 33.107 trillion naira or $ 87.239 billion as of March 31, 2021.
Basically, in my opinion, it is not a bad idea to borrow, especially when such borrowing is targeted / development oriented. However, mindless borrowing, as we have seen recently, can only deplete the borrower’s economic creation prowess, decrease the propensity to become self-reliant, and expose the entity to increased socio-economic vulnerability. As a nation, we seem to have forgotten that one of the negative attributes of borrowing is that once you start it becomes your character. This habit of borrowing which is ours has succeeded in weakening our states to a lamentable level.
The consequences of such a development (reckless borrowing) become worrisome when one recalls a similar report that the federal government achieved a total of 3.2 trillion naira in 2020, and on which it spent a total of 2,340 billion naira for debt service within the year. This means that 72 percent of government revenues have been spent on debt service. It also places the debt service to government revenue ratio at 72%.
Over the course of the year, debt servicing devoured 2.11 trillion naira. This puts the federal government’s debt service-to-revenue ratio in 2019 at 54.66%. This means that between 2019 and 2020, the federal government’s debt service-to-revenue ratio fell from 54.66% to 72%.
Now this room will keep the problems where they are.
First, there are reasons why state governors are notorious for not looking within their own countries how to make their state financially independent / self-sufficient. The most basic of the reasons is the feeling of some that Abuja is there to provide the necessary financial assistance. This has made most of our governors lazy and indifferent to self-introspection on how to improve their state’s Internally Generated Income (IGR). Instead, they prefer to borrow, regardless of the fact that every opportunity to borrow as planned comes with imminent risk.
With the exception of Lagos, Delta, Rivers and a few others who are still active in sustaining their states through internally generated income, the others share one common denominator: Abuja dependents. It also underscores the fact that our problem as a nation is more one of leadership, for “the strength of every state is a direct result of the strength of the rulers.”
To further substantiate the above point as made, it is factual that our pre-independence colonial overlords devised very transparent means of generating income. These methods include, but are not limited to, penetrating every nook and cranny of the country’s geography to ensure that everyone has paid their taxes.
So, if this could be done by outsiders years ago and in an era devoid of improved information technology, the question can be asked; what is wrong / happening with our current crop of leaders? Why can’t they replicate the same or devise more creative ways to make the state / nation financially viable? What is appealing about borrowing that they (leaders) see as the only credible / effective alternative?
Without a doubt, our leaders know how to mop up our community for their personal aggrandizement while abandoning the poor masses to mop up their tears. They (public office holders) are specialists in finding foreign loans.
In doing so, they forget to remember that no one takes seriously a government that governs with a beggar approach and that no nation becomes strong or great by living on borrowed funds.
On a related note, they (leaders) should also remember that people keep a close watch, especially young people. They should remember that in a time like this people are watching with special attention, noting every move they make, learning what they really believe as opposed to what they are saying. Likewise, most of our retirees have given up hope and resigned themselves to fate by banking on their age-old religious teaching that their reward is in Heaven.
As an incentive to change this state of affairs, it should be noted that Nigeria may have openly shown remarkable improvement in its culture and civilization. Despite this, the fact that after nearly 60 years of independence, the country is not only indebted to many institutions, nations and organizations, but is continually turning to others for help, secretly tells the story of a nation that does not have the capacity to take responsibility for its actions and initiatives for values.
In response to the above realities, I am of the opinion that it is necessary for our leaders to imbue themselves with a culture of savings because this attitude of eating with our ten fingers does not in any way support our economic growth or our sustainability.
Finally, state governors should remember and take into account that the shortest path to the bright future that we seek is in a creative approach. Therefore, let the governors focus on Abuja and focus on increasing the revenue generated internally by their state by working collaboratively with development-minded Nigerians. This process, who knows, can provide a lasting solution to the nation’s nagging financial challenge.
Utomi, the Media and Public Policy Program Coordinator at Social and Economic Justice Advocacy (SEJA), writes from Lagos. It can be via [emailÂ protected] or 08032725374