Has the Federal Government finally become addicted to borrowing and subsidy payments? Every thought in government circles these days revolves around where to get the next loan to buy equipment for water production and where to get money to finance the next shipment of fuel into Nigeria. Wikipedia, using the medical prism, explained that addiction is a neuropsychological disorder characterised by persistence and intense urge to use a drug despite substantial harm and other negative consequences…, and in another related but not strictly medical parlance, addiction is defined as the inability to control doing, taking or using something to the point where it could be harmful to you.
The element of addiction in our borrowing activities can be observed from some statements of the Minister of Finance, Zainab Ahmed. In one breath she would complain of serious shortfall in revenue and the government’s inability to cover debt servicing and repayment, or that servicing debts is preventing the government from investing in development projects. In another breath, she would be elated that another loan has been approved by institutional and private entities for the country. Also, at one point, some government actors would be complaining about high cost of subsidising fuel importation and the same government actors would be recommending huge financial allocations in the budget for subsidy payments rather than investing in projects that will eliminate such subsidy. So, the government knows both borrowing and subsidy are injurious to the economy but they cannot help moving away from them. You can fathom the symptom.
For emphasis, this was a country that fought the civil war for almost three years without borrowing from domestic or international markets, even when there was no oil money but reliance on agricultural incomes from Northern and Western Nigeria. This was a country that set aside some of its earnings from oil for onward lending to less endowed African countries, tagged Nigerian Trust Fund under the management of the African Development Bank. At that time, the country’s budget would also contain expenditure on capital projects. Such projects like constructing of river basins to enhance agricultural production; building and constructing refineries to refine Nigeria’s crude oil, at least for domestic use; establishing vehicle assembly plants to assemble locally made vehicles—Peugeot and Volkswagen—and many other employment and income-generating activities. It was all about production and employment generation.
It was the time the Federal Government was establishing and funding universities of technology with a view to promoting technological advancement. It was the period that in the annual budget, priority was given to capital projects or expenditure as against recurrent expenditure. The reverse is the case today. It was the period that the items in the annual budgets were derived from the long-term national plans. When, even under military regimes, the Head of State cannot just wake up and command that a road should be constructed to Cameroon or Niger Republic at the expense of development at home. The period the gatekeepers of the economy like the Accountant General of the Federation, security chiefs, law officers like the Attorney General of the Federation and other strategic national resources managers were conscious of the enormity of the responsibility entrusted on their shoulders and carried out the task with integrity and dexterity.
Things have changed for the worse with state apparatus being used for promoting corruption, indolence, insolence, insolvency, inappropriate rule of law, destroying rather than building institutions and promoting consumption over production. There is no doubt that the major item of expenditure in 2023 budget over and above social infrastructure like education and health will be debt servicing and subsidy. The two could take as much as 40 per cent of the budget while spending on administration (Executive and Legislature) will take another 30 per cent leaving 30 per cent for other sectors to share. A major source of financing for the budget will be debt instruments not revenue from production.
During her appearance before the House of Representative Ad Hoc Committee investigating petroleum products subsidy regime, the minister of finance indicated what to expect from the 2023 budget. The government had already planned for payment of subsidy for only half of 2023 so that a new government will then decide on what to do with subsidy. She said that the fuel subsidy content, not production subsidy, will cost N6.4 trillion for the year. She also confessed that they would have to borrow more to take care of the subsidy! For 2022, the government is expected to spend N4 trillion on subsidy. As a sign of addiction, the minister said, “This situation is not desirable and it is not sustainable. It is putting the country in a very serious, dire financial situation and we do hope that we will be able to exit the subsidy regime in the shortest possible time”. She did not tell us about any concrete production plan being taken to exit the subsidy regime. What a pity!
Head or tail, the country loses in the borrowing and subsidy quagmire. Those who negotiate the loans would get their commission; those who receive part of the loans that come in as transfers into federation accounts like the Accountant General could steal the money through underreporting of revenue and transfers to their personal accounts while the other workers who effect the transfers would help themselves by also crediting their personal accounts. At the fuel importation end, some of the fuel produced in our local refineries, transported by sea to Lagos port are paid for as imports, some empty ships on their way to steal crude oil offshore first berth at the Lagos port as fuel-laden ships for their owners and collaborators to collect their shares of the subsidy before moving offshore for the original stealing business and finally ships with imported fuel worth N500 billion also discharge and submit bills for N1 trillion. Investigative journalism will confirm some of these activities but a Yoruba adage literarily says, “the person whose head is used to break coconut will not partake in the eating.” Mr. journalist, please take note. I have not sent you on suicide mission.
Nigeria is a special case study for corruption in high places and restitution for corruption in such places. Every naira stolen or mismanaged has negative implications for some members of society. We can infer, for example, that the directive by the President, Major General Muhammadu Buhari (retd.), that rail and roads be constructed to Niger Republic as well as the purchase of vehicles for use in that country, without budget provision or supplementary budget, is responsible for government’s inability to meet Academic Staff Union of Universities demand for funding the universities. The same government is now saying that it cannot make supplementary budget to implement the agreement.
Stealing state money by former governors Joshua Dariye and Jolly Nyame as well as others must have led to the death of some of their subjects due to their inability to get money to fund health care, education, some social projects or pay minimum wage in their respective states. Those affected one way or another by the acts of these ex-governors are the losers because the thieves have been pardoned and allowed to go and spend the money. In fact, shamelessly, if it is true, one of them is already planning to context election again and under Labour Party for that matter! Who owns the party? One hopes it is not the Nigerian Labour Congress. It is a waste of state resources to have prosecuted them in the first instance and insulting to allow them to roam the streets. That is corruption institutionalised.
Some officials will steal blatantly and arrogantly. They know that they have been protected by law and lawyers through the introduction of plea bargaining. A bargain applicable to big-time thieves but excludes small-scale stealing. A law that allows people of trust, who turn out to be pen robbers, to go and spend any part of their loots but sends someone, who steals a tuber of yam to six months imprisonment, suffers equity and justice. Nigeria imported that law from somewhere and I am not sure that is the way the law is applied in that country. It is and will be a shame if someone or anyone accepts stealing our loans (since we now live on loans) or our oil (or oil subsidy) and we negotiate to share the money instead of confiscating the total wealth and give him or her life sentence. Nigerian government needs help with addictions. Let us pray.
