“Nigeria’s Debt hits N21.7tn” – DAILY INDEPENDENT.
The terrifying news was released by the National Bureau of Statistics, NBS, last week. According to the NBS, the nation’s debt which stood at N12.12tn on June 30, 2015, a month after President Buhari was sworn in, has escalated by N9.61tn, under Buhari in just thirty (30) months.
Nigerians and the global community need to be reminded that it had taken this country one hundred and thirty two (132) months since we exited from the debt trap in 2004, to accumulate the N12.12tn. In other words, under Buhari, this country has been accumulating debts at almost three and a half times the rate we experienced under hid three previous predecessors. At the rate we are being driven into debt, the nation will by the end of this year exceed the debt stock Buhari inherited in under four years.
As usual, each time Buhari raises the debt ceiling and concerns are expressed by the World Bank, the International Monetary Fund (IMF), the African Development Bank, ADB and knowledgeable Nigerians, the officials at the Debt Management Office, who apparently have forgotten all the economics they learnt at their various universities offer the same rejoinder.
According to them, the total debt as at December 2017 represents only 18.2 per cent of Nigeria’s Gross Domestic Product, GDP for that year and that is within the threshold for countries in our peer group. That is a dangerous half-truth which had been told before in the 1990s as Nigeria gradually was sliding into the debt trap from, thanks to rising crude oil prices, which Dr Ngozi Okonjo-Iweala and Obasanjo had rescue us at a great price in 2004.
To begin with, one must remind those who want to politicize a simple economic problem with false claims. No country repays its debts from its GDP for the time-tested reason that no two nations in the same category nevertheless differ in the composition of the economic variables which enter into their GDP. Nigeria, still a pre-industrial nation has factored into its GDP a lot of elements which are not traded. Out large pool of subsistence farmers produce and consume trillions of naira worth of produce at source. They swell the GDP but are not available to yield revenue to help repay the national debt. That was the lesson we learnt from 1984 to 2004; but which DMO is forgetting in the attempt to lull us to sleep by assuring us of sustainability. Debt as a percentage of GDP never crossed 30 per cent in our worst years under the debt burden.
Furthermore, there is no single country among our peer group which has been so badly managed as to allow its Value Added Tax, VAT, to remain at less than 7.5 per cent as opposed to our own. Among the consequences of this had been the need to continue to borrow instead of looking inwards for revenue.
Similarly, Nigeria must have the longest stretch of highways without a single toll gate to ensure cost recovery. That bit of fiscal folly was the legacy President Obasanjo left us when he dismantled the toll gates that were installed from the time the Lagos-Ibadan Expressway was built. Only God knows how many trillions of naira go uncollected as a result of this administrative foolishness alone.
When the mind turns to taxes, the heart bleeds. Everybody in governments since the 1970s had known that the wealthy and the rich don’t pay taxes. They have all turned blind eyes to the massive robbery of the national treasury for almost fifty eight years. Even now, the government is still vaguely threatening the 130,000 richest Nigerians known to be tax evaders. It could be understood if these are absolute illiterates who are also first time offenders. But, that is not the case. Many of them have been committing tax offences for as long as they and government can verify. No other nation, even African nations, in our peer group would have allowed a situation under which its richest one per cent, who control close to seventy percent of the assets, don’t pay taxes and have to be given a long time to comply instead of being slapped with severe penalties as we are doing now.
Finally, anybody who cares to look at the allocation of Duty Waivers in Nigeria will discover that some of the wealthiest Nigerians feed fat on that collusion between them and the every Federal Government since the 1980s. Every promise to ensure self-sufficiency in rice, tomato puree, cement and sugar production has invariably resulted in the same set of people enjoying billions of naira worth of Duty Waivers which are invariably abused and the self-sufficiency almost always remains a mirage till today. The scams cost Nigeria trillions of naira every year which lazy, corrupt and incompetent government officials cover up by going out to borrow.
Just remember this. In 2015 every Nigerian alive was owing N68,000 as his/her own share of the national debt. By December 2017, the debt burden per capita had risen to N117,000.
The question is: what has Buhari done with the N9.6tn he borrowed? Can anybody tell us? Never mind if it is sustainable; but, can the DMO show us what was done with N9.6tn? That is what matters to us now.