The Voice of Reason (VOR) has observed with dismay the recent, ultra-smooth approval by the legislature of a request by the President for authority to commit Nigeria yet again to various multilateral loans totalling a sum of 5.5 billion US dollars.
These loans are being borrowed within the Federal Government’s adopted Medium-Term Expenditure Framework (MTEF), which provides a funding reference point for its proposed expenses during the multi-year fiscal period of 2020 – 2022. The loans being currently sourced comprise $3.4 billion, borrowed from the IMF at 1% interest; $1.5 billion for Development Policy Financing, borrowed from the World Bank at almost 2.4% interest; $ 500 million for COVID-19 Response, borrowed from the AfDB at 1.3% interest; and another $113 million from the Islamic Development Bank at no interest.
While all the due technical and legislative processes for approving these loans have apparently been met by the legislature, VOR expresses deep concern regarding the prudential, efficiency and citizens-interest rationale underlying the loans. Our concerns also focus on their use and impact on the country’s financial management, good governance and developmental objectives.
Since the sourcing of the multilateral loans is now a ‘fait accompli’, VOR, while protesting the structural and financial-management weaknesses in the taking of the loan, would suggest that the nation’s leadership should, in future, deploy more technically-mature diligence in its borrowing against the future of Nigeria’s yet unborn children.
VOR believes that the approaches outlined below – hardly exhaustive, can provide a more effective road map to national borrowing, especially at a time like this, when a combination of COVID-19 related socio-economic challenges and a slowly-unfolding end of the oil-income era, poses a gradual but structural shift in the fiscal dynamics of the country. Thus, we propose that before taking any future loans
- Government should rationalize most, if not all, current expenses, including an appraisal of the soundness or viability of the various elements of current expenditure
- Government should shelve and/or postpone some projects, based on the urgency or otherwise of the need for them
- Optimize the use (including proper maintenance and quality upgrade) of all categories of resources, equipment, property, infrastructure, personnel etc, currently owned or used by government
We argue that taking billion-dollar international loans (multilateral or private) should not be embarked upon with the levity we have observed over the decades – and particularly under this administration. It is a serious commitment because current and future lives depend on these loan decisions. While a sitting government certainly has the technical prerogative to pile up a burden of indebtedness on future, yet unborn generations, no government can automatically claim a moral right to do so. We enjoin the National Assembly to diligently carry out its constitutional oversight in ensuring that the loan is put to results-oriented, human and technological development use.
To make matters worse and rub in more leadership insensitivity to the plight of Nigerians at this time, an ill-timed budget allocation of over 27 billion naira has been made for the renovation of the National Assembly buildings. As hundreds of thousands of small and micro businesses are folding up due to the economic disruptions of the COVID-19 pandemic, and as perhaps millions of Nigerians are set to lose their salaried jobs, VOR considers this fund allocation to be in bad faith. For the President to treat renovation of a largely intact National Assembly building as a higher priority than the rehabilitation of the economic conditions of the majority of our citizens is not a sign of mature leadership or sensitivity to the harsh existential struggles of the citizens. Given that context, it becomes difficult to disagree with those who claim to see a ‘quid-pro-quo’ connection between the hastily-approved loan request and the President’s provision of an arguably non-urgent 27.7 billion naira renovation money for the National Assembly complex.
True and effective leadership must always be sensitive to the socio-economic pains and concerns of those it leads. VOR is of the opinion, and hereby specifically demands, that elected, as well as all other categories of public office holders should show more sensitive and responsive leadership in their interface with the people of Nigeria. Of course, we emphasize this demand mostly and especially for the attention of all elected and non-elected public leaders across Yorubaland.