Bailouts in Greece and Nigeria: Public debt and accountability By Tabia Princewill

Two women look at the display window of a shop in Thessaloniki on July 13, 2015. Greece reached a desperately-needed bailout deal with the eurozone after marathon overnight talks, in a historic agreement to prevent the country crashing out of the European single currency. AFP PHOTO

The debate over the possibility of Greece leaving the Eurozone due to its inability to repay its debts, led me to think about the usefulness and purpose of the African Union, AU.

Beyond defending war criminals (a most unfortunate reputation), I wonder if anyone could argue that the AU has truly helped develop Africa. An institution that is so dependent on the whims and funds of international donor agencies, cannot have the capacity to effect any sort of meaningful change.

The European Union, EU, was conceived to stabilise Europe both politically and economically, in reaction to historical events (the Second World War, for instance) which divided and destroyed the continent.

The AU does not enable Africans to move around freely or to do business with ease (even travelling inside of ECOWAS can be a hassle) and quite frankly, one is better treated as a foreigner than as a citizen, or national, in most of Africa. African countries have few common economic policies or agreements to support each other, beyond calling Western governments racist for pointing out their inefficiencies or for coming after them for corrupt dealings.

The equivalent of a Eurozone in Africa, or of a single currency is nothing but a far-fetched dream when most countries in Africa cannot boast of stable, diversified economies surviving on exports beyond natural resources.

The average African still doesn’t hold a bank account and cannot trust the banking system to keep his money safe, and who can blame him? The Nigerian banking system for one is constantly rocked with scandal after scandal and it is possible in Nigeria to get away with the theft of N500 million but to go to jail and face inhumane, degrading treatments or even to be beaten to death by one’s own community, for stealing pepper or a loaf of bread. Yet, in other climes, both governments and citizens are able to stand together to face up to perceived oppression.

The Greeks’ refusal of the first debt management plans and proposals made by the EU made me wonder if it would have been possible for African governments to refuse Structural Adjustment.

Many of our economies are yet to fully recover from the lack of social spending which SAPs popularised. African governments typically spend less than 3% of their GDP on education and health. Many Nigerians on social media tweeted their support and solidarity with Greek pensioners crying beside empty ATM machines where one could not withdraw so much as 20 euros in the past few weeks.

Yet, every month all over Nigeria pensioners queue, faint and perish under the scorching sun, waiting to collect their gratuities which many never get. Unlike many countries in Europe, where citizens live off benefits and are somewhat work shy, Africans, despite what the elite will tell you, do want to work. The average African is a work horse: we are so used to the state doing nothing for us that most of us hold down several jobs and that’s without even going into the hardships rural Africans face.

Yet, Nigeria, for example, had periods of incredible oil windfalls (Nigeria’s current indebtedness and inability to pay salaries is a strange, confusing fact given our earnings under the Jonathan administration) and one often wonders if the credentials, as I have often said, of some of our past finance ministers were merely party tricks.The Greeks have called the bailout deal which Prime Minister Alexis Tsipras was forced to accept a form of ‘humiliation and slavery’. However, the truth is that Greece has operated in the past with the lightheartedness and frivolity of an African government at its best.

Nigeria has little to no mechanisms in place to curb spending or recurring waste and even less policies to create wealth: too many businesses are either fronts for government officials or exist solely to do business with government. Our housing and property market is a bubble waiting to burst as many properties across the country are often owned by a handful of politically connected individuals.The average Nigerian has little to no disposable income or purchasing power, and our manufacturing industry­ ­ ­  is comatose because we don’t have electricity. Few companies make enough after taxes to have advertising budgets to support our media industry, so our press is taken over by politicians.

Members of the EU are accountable to each other and as the Greeks learnt, dragging down the Euro means surrendering economic sovereignty to creditors who enforce austerity in the offending country. For me, the only difference between Nigeria and a failing economy such as Greece is the level of media interest in the state of our own affairs. We would much rather discuss political intrigues than the policies said politicians actually effect. Who is in power matters much more than what they do whilst in power in Africa. State and federal government budgets grow every year, yet we have little to show for it. Where does all the money go? That is a rhetorical question. Now state governments must be helped to pay their workers’ salaries: I’m baffled or more so than usual should I say.

The details of the states’ bailouts are sketchy: no one can agree where the money comes from. Nigeria’s external debt profile reads like the script from a horror film and already some states are being accused of diverting the funds meant to pay workers. I’m not surprised. The conditions relating to the Greek bailout are strict, obviously to discourage future governments from engaging in reckless financial activities.

But what is to stop this class of governors from either looting the bailout funds or engaging in the same wayward actions as their predecessors? Governor Oshiomhole and former Minister of Finance, Ngozi Okonjo-Iweala have been arguing recently over one billion US dollars which was allegedly withdrawn from the Excess Crude Account to fund former President Goodluck Jonathan’s campaign.

The process for the approval of expenditure in Nigeria is not transparent, not monitored by Nigerians who are yet to use the Freedom of Information Act to ask our government relevant questions. What happened to the aviation intervention fund, or to the textile, agriculture and power funds? Our parasitic ruling class has been the beneficiary of all government interventions and the process is about to repeat itself.

The Greeks avoided leaving the Eurozone (the consequences would have been disastrous) by begrudgingly accepting financial austerity. Are the elite in Nigeria ready to fend for themselves and work rather than live off government largess? Are the poor and middle class responsible for unseating an incumbent ready to stop mentally ‘checking out’ and give Nigeria’s survival a chance, by monitoring government actions?We cared enough about our country to vote for change and a new course, we must be concerned with what happens next, namely what happens to the bailout funds and all future amounts disbursed and recorded by government agencies.

Kayode Fayemi

One of the rare Nigerian politicians with a background in public policy, Kayode Fayemi, the former governor of Ekiti State, brings a lot to the table. APC and PDP are currently bickering over the alleged plot to stop his arrest for would-be misappropriation of government resources.

Perhaps it would be more logical for the public and the parties to concern themselves with the governors the EFCC is actually questioning, such as Sule Lamido. It’s not about being partial, it’s just we commonly put the cart before the horse in Nigeria and it’s often a politically-motivated practice.

Hillary Clinton

She recently gave a speech on stagnant middle class wages and US economic policy. How I long to hear Nigerian politicians discuss fairer, inclusive growth rather than their own salaries. Everything in Nigeria is rigged against the common man and no one seems to care. Our short-sightedness cannot let us see that lifting the mass of Nigerians out of poverty will, in the long run, create a bigger pie, more wealth, for us all to enjoy.

VANGUARD