Nigeria’s debt stock increased by three per cent from the N21.68tn recorded in December 2017 to N22.4tn recorded in December 2017 and to N22.2tn ($73.21bn) at the end of June 2018. The Director-General, Debt Management Office, Patience Oniha, made this known at a media briefing in Abuja on Tuesday, August 14, 2018.
She said the nation’s debt stock decreased by 1.44 per cent from N22.7tn recorded in March 2018 to N22.38tn in June 2018. The decrease was largely due to a 3.38% decline in Nigeria’s domestic debt stock between March and June 2018. There was also a marginal increase of 0.07% in the external debt stock and 2.75% in the domestic debt of states.
But speaking on October 28 at the 9th public lecture of Sigma Club at the International Conference Centre, University of Ibadan, Vice President Yemi Osinbajo said the nation’s debt was $73bn, a $10bn increment from $63bn the present administration inherited in 2015.
“In 2010, our debt was $35bn, $41bn in 2011, $48bn in 2012, $64bn in 2013, $67.7bn in 2014, $63.8bn, $70bn in 2017 and N73bn in 2018.
“The nation’s debt as of today is $73bn, an increment of $10bn from the $63bn inherited in 2015”, he said.
There is nothing wrong in securing a debt. But there is everything wrong if you cannot justify what you have done with the debt either as an individual or a company or as a nation.
And the sad thing is that the money that Nigeria has borrowed now as foreign debt has been relooted back to Europe, America and Asia by our leaders making us, our children and grandchildren to face the future as perpetual captives. We are talking about a country where especially in the rural areas there is no government presence—a clear indication of a failed state.
We are talking about a country that survived a civil war between 1968 and 1970 without borrowing a single kobo! Available records show that Nigeria did not borrow during the era of Gen. Yakubu Gowon from 1966 to 1975. In fact, record shows that the country did not borrow a kobo during the short era of Gen. Murtala Mohammed from July 1975 to February 13, 1976.
We are talking about a country which the British Prime Minister, Theresa May, on August 28, said, “Much of Nigeria is thriving with many individuals enjoying the fruits of a resurgent economy, yet 87 million Nigerians live below one dollar and 90 cents a day making it home to more poor people than any nation in the world.” We are talking of a nation which a former Minister of Finance, Mrs. Ngozi Okonjo-Iweala, said earned $61.7bn between 2011 and 2014.
Nigeria’s foreign indebtedness started during the military regime of Gen. Olusegun Obasanjo in 1977. The government first borrowed N600m ($1bn) which was followed with another huge borrowing of N734m ($1.456bn) in 1978. Thereafter, there was borrowing by both the federal and state governments which later aggravated the Nigerian debt problem.
Presenting his first budget to the National Assembly on July 1, 1980, President Shehu Shagari said, “As of September 30, 1979, the last day of the military regime, the overall financial position of the Federal Government showed a deficit of N1.4bn (N1,403,621,928). The Federal Government was not alone in this dilemma. The state governments were in the same predicament and were likewise unable to meet their contractual obligations and, naturally, this affected the performances of the economy generally both in the public and private sectors. On the external front, our debt rose to N364m in 1978/79”.
On Thursday, December 29, 1983, a few hours before he was toppled from office, President Shagari presented the 1984 budget at the National Assembly, Race Course, Lagos. He said, “An objective of government policy during 1984 will, as earlier indicated, be the improvement in the balance of payments and reserves position. Accordingly, out of the estimated foreign exchange earnings of N8.562bn during 1984, N562m will be set aside in order to raise the level of external reserves from its present level of less than a billion naira to N1,464 billion as of the end of 1984. The balance of N8.0bn will, therefore, be available to meet the country’s projected foreign exchange commitments during the year. Of this amount, N3.0bn will be utilised in servicing external loan commitments while N5.0bn will be applied to pay for the importation of raw materials, machinery and spare parts, essential commodities and other items in the current account section of the balance of payments”.
A few days after taking over power, Maj.-Gen. Muhammadu Buhari addressed the world press on January 5, 1984 at the Dodan Barracks, then the seat of government. I covered the event. He declared on that day: “With respect to state governments, available data for 1980-82 showed that their combined budgetary deficits rose from N3,295.6m in 1980 to N4,882.6m in 1981 and N5,373.1m in 1982. In relation to the nation’s total input, the budgetary deficits of the Federal Government increased from 3.7% of the non-oil G.D.P. at current prices in 1977 to 9.3% in 1978. The recorded total deficits of all governments increased from 16.6% in 1980 to 31.9% in 1982. The budgetary deficits were financed by either internal or external borrowings or both. Invariably, this led to a rapid accumulation of public debt whose internal component increased from N4, 635.9m to N15,010.5m from 1977-1982 and to N22,221.44m for 1983. The indiscipline in the former governments’ spending pattern was even more pronounced in the external sector of the economy. The seriousness of this country’s propensity to import is reflected by the fact that out of every N1 of new money created, about 68 kobo is spent on imports. At N12,565.5m in 1982, imports were N5,471.8m and N3,469.9m higher than the levels in 1977 and 1980. External debt outstanding thus increased from N1,137.0m in 1977 to N5,341.2m in 1982 and to N7,689.44m for 1983. The debt service ratio has also increased steadily at less than one per cent in 1977 to 8.9 per cent in 1982 and to about 30.5 per cent in 1983”.
Again on April 7, 1984, Buhari told the nation in a broadcast to mark his 100 days in the office that, “negotiations are in progression to re-finance Nigeria’s short term trade arrears estimated at N3.64bn ($4.5bn). Export credit agencies with insured arrears in the USA, the UK, France, Western Germany, Italy and Japan have been generally receptive to a request for a review and rescheduling of Nigeria’s foreign commitments provided negotiations for an IMF programme, including a devaluation of the naira are successful. Uninsured creditors with arrears totalling over the US $2bn have accepted re-financing proposals in principle, negotiations for an IMF programme continue”. On May 7, 1984, while presenting the 1984 budget, Buhari declared “our total external indebtedness as of 31st March, 1984 stood at N8.30bn approximately. The total commitment is N17.46bn, out of which N9.80bn has been drawn down. Repayments total N1.50bn. The Federal Government’s total of drawing less repayments is N5.31bn. The figure for the state governments is N2.98bn”.
In spite of the draconian measures through decrees and policies, our debt burden kept increasing. There was even a stalemate between the Nigeria government and the IMF over the debt issue. On August 27, 1985, Buhari was overthrown by his Chief of Army Staff, Ibrahim Babangida.
To be continued
Teniola, a former director in the Presidency, lives in Lagos
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