“Why should a country, which earns US$80bn in oil revenues each year, take any loans from the World Bank?” Twitterati
Seven years ago, Nigerians learnt that the administration of President Obasanjo had successfully negotiated our debt with the Paris Club. We paid $12 billion and discharged the rest of the debt- leaving the country almost free of any foreign debt. For many it was a great move that restored national pride and would “clear the way for greater government spending on infrastructure, healthcare and education” since Nigeria would no longer have to spend tens of billions annually to service the debt. Others felt that if there was any sincerity, the $12 billion would have been better-spent building infrastructure and investing in services. After all despite how greedy and unscrupulous those in positions of power are, no one has been able to roll up the 3rd Mainland Bridge and put it in their pocket.
Four weeks ago, we heard from the Minister of Finance, Dr. Okonjo Iweala that our external debt has climbed to $6.67 billion. The Debt Management Office (DMO) projects that by 2015 this debt would be $16 billion and this does not include domestic debt. According to Dr. Nwankwo, the Director-General of the DMO, domestic debt is currently $7.12 billion and is projected to be $8.44 billion by 2015. These revelations came within the same period when Dr. Okonjo Iweala was quoted in the media as saying:‘our economy is in danger’. This is an escalation of the 2011 warning when Dr Okonjo Iweala, Prof Nnaji and Mr. Segun Aganga said ‘our economy is in trouble’. Yet between this period Nigeria has continued to earn about $80B a year from oil revenue alone which according to the Ministry of Finance, accounts for 58% of our revenue. Where does all this money go?
There are two ways to look at the question. The first is the money that government admits to having i.e., the money accrued from oil revenue or raised by FIRS, Customs and the sale of oil licenses etc. This is the money which allegedly ends up in the annual budget. The second stream is the money which no one admits to having –e.g., the $6billion Nigeria loses every year to crude oil theft, the $9.8B in unpaid taxes NEITI says oil companies are owing, the government assets sold to insiders quietly under the table or the $23-27M from the sale of Nigerian assets in the US.
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What are the glaring obvious results of the ‘increased investment in infrastructure and services’ that was promised as a result of paying off the Paris Debt? What can account for where the money has gone?
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It is general knowledge that in Nigeria less than 30% of our annual budget is actually invested in improving goods, services and infrastructure – the bulk of the money is spent on maintaining government. But what is less certain due to opaque budget regulation and disclosure is how much of this paltry allocation to capital expenditure is spent as it should.
According to the Center for Social Justice, only 11.9% of the quarterly released capital budget
was implemented in 2012. This means, if N100 was allocated to capital, only N11.90 was spent with no detail on where the balance of N88.10 went. Allegedly ministries, departments and agencies spend the last few weeks of the year in a mad rush to spend budget allocations because ‘the money will go back’. Go back where? Do these last minute projects really count towards the capital investment or does the money provided in the budget end up with the second stream of Nigerian revenue which evaporates and is never accounted for?
Look around you. What are the glaring obvious results of the ‘increased investment in infrastructure and services’ that was promised as a result of paying off the Paris Debt? What can account for where the money has gone?What monuments t > infrastructure development has the Federal Government built in the last seven years? Do we have a single world-class airport in Nigeria? Has any state, despite the billions in debt, managed to build a light or inter city rail system?
Apart from worrying about our rising debt which cannot be linked to meaningful improvement in the lives of Nigerians, we must be concerned about who we owe. Most of our current external debt is held by the World Bank; the same World Bank which said in May 2013 that the economic rating of Nigeria had improved from a low income country to a medium income one. Why was it important to move our rating? Because our ‘improved’ rating gives Nigeria the dubious privilege of borrowing from the International Bank for Reconstruction and Development. Yet, a month later the same World Bank blasted the Jonathan administration for the increasing number of Nigerians living in poverty.According to the Nigeria Economic Report, it is a puzzle why ‘a decade of rapid GDP growth by official statistics…did not bring stronger welfare and employment benefits to the population.’ Which is it? Is Nigeria now a medium income country or a country where the majority are wallowing in poverty? And this is the same World Bank that will eventually tell our inheritors –our undereducated and unskilled children and grandchildren – to restructure their economy in order to pay back these loans- even though they do not know where the money went.
We know the answer to the question even if those in power want to pretend otherwise. The answers lie in the luxury cars and grandiose mansions scattered around our cities and the most backward small towns which count for state capitals. Where is the money is answered in the enviable position Nigeria holds as the second largest champagne market in the world and a leading consumer of private jets. It is answered by the exorbitant salaries and benefits of our elected and appointed officials and the steady displays of vulgarity of those in power with weddings and birthdays in Dubai.
As our oil revenue drops from decreased production, crude oil theft and declining need for our oil, this question will become increasingly important. As the population of Nigeria continues to rise faster than the development of its resources and services and unrest and dissatisfaction increases, the demands for answers to this question will become louder. And as the next general elections approach Nigerians must require those who contest to not only throw light on this issue but provide us with clear solutions on how we can address this problem and turn things around for Nigerians.
