The former Nigeria’s Vice President and the Presidential candidate of the Peoples Democratic Party, PDP, during the 2019 general elections, said that the former president, Olusegun Obasanjo paid Nigeria foreign debts even with lower oil price than it is during his boss tenure.
He said “the current price of oil was lower than it is today when Obasanjo and I assumed office on May 29, 1999. Yet we paid off Nigeria’s entire foreign debt”.
Atiku said the issue of Nigeria wanting to borrow $6.9 billion at this time shows the almost delusory state of our government.
No one has that type of money to throw about. China and America, previously our two largest creditors, have taken hits to their economies to the tune of trillions of dollars. If they could, they would consider taking from us at this stage.
He said before the novel coronavirus pandemic hit the globe, Nigeria spent 42 per cent of her earnings on debt servicing. We have arrived at a new reality today: Even if we devote 100 per cent of our income to rebuilding our economy, it still will not be enough.
COVID-19 has wreaked such damage to the world’s economy, and this is now very evident in the West.
But we should not take solace in any false sense of security that nations like Nigeria are either immune to the vagaries of this plague or that we would not be as hard hit.
The reason countries in the Western Hemisphere are reporting more significant numbers than developing nations is primarily due to the availability of testing and real-time information.
Asking for debt relief
Ignorance is not bliss in this instance. We shall soon know the truth and, sadly, this truth will not set us free. It will shock us.
Had we closed our ports of entry early, we would probably have had better reasons to be hopeful.
However, the past is gone, but we must be proactive in going forward. I hate to be the bearer of bad news, but Nigeria and other African nations are yet to see the worst of the effects of this scourge.
That is why we should unite together and seek debt forgiveness, as a direct consequence of the impact of this pandemic on our economies.
And we have a perfect case because almost every African nation with a COVID-19 infestation had an index case that originated outside the continent. Nigeria’s index case was Italian, Liberia’s was Swiss.
Ethiopia had a Japanese index. South Africa’s index case was South African, but he and his family got infected in Italy.
This crisis should force a commonality of purpose in Africa. And more so in Nigeria. This is beyond politics. Beyond religion. And beyond ethnicity.
As crisis go, this one can be described as existential. While it is true that in a situation like this, the international community should invest in all countries needing help, we must be mature enough to see that that is not going to happen.
The only thing that is standing in the way of the coronavirus in Africa is ourselves. And we should not give in to panic by the doomsday scenarios being painted by analysts.
They mean well, but if they only shout fire in a crowded theatre, all that their good intentions will cause is widespread panic. We must remember that many of them had predicted that Nigeria would cease to exist as a corporate entity by 2015, but here we are.
We must avoid panic
We had the Wild Ebola Virus, and we defeated it because we did not panic. We must apply that same level-headedness to this crisis. But this does not mean that we should go to the other extreme and become overly optimistic or pollyannaish.
Even when we are able to avoid a high human toll from this virus, we would not be able to escape a much higher economic toll. We may have a recession.
The challenge right now must be to mitigate it, since we cannot avoid it. Already, we see forced currency devaluations from the Cape to Cairo. These will no doubt lead to internal inflation, which will spell trouble for nations like Nigeria, that have a high external dollar debt burden.
Already, the United Nations Economic Commission for Africa is projecting that Africa’s growth will at least drop to 1.8%, and maybe more. Bear in mind that, thanks to nations like Rwanda, Ethiopia and Tanzania, we had been projected to grow 3.2 per cent this year.
Foreign help out of reach, we must look inward
Faced with this crisis, Africa cannot even think of falling back on China, or the West. When a country like the US is struggling to supply its own healthcare workers with personal protective equipment, Africa will not feature high on its priority.
Where China is wondering how to explain itself to the world when this dies down, our challenges will be far from their minds. We must fall back on ourselves, or we will fall headlong.
We must take responsibility for navigating our way out of a challenge that was forced on us from outside the continent.
This is the time for every money made in Africa to stay in Africa. We have hospitals to build. We have economies to reboot. We have citizens to care for and return to work.
We certainly should not be sending money out of Africa and into Asia and the West. Not now and not for the foreseeable future.
With lower oil price, Obasanjo paid our foreign debts
Oil prices have crashed, and that by itself should not be enough to trigger a crisis. After all, the current price of oil was lower than it is today when President Obasanjo and I assumed office on May 29, 1999. Yet we paid off Nigeria’s entire foreign debt.
We need right people to manage our economy
However, there are two remarkable differences. The first is that we had a stellar cabinet between 1999-2007.
We had the right people manning our economy. We certainly would not have proposed to take out a $500 million loan to digitalise the Nigerian Television Authority, or devoted ₦37 billion to renovating the National Assembly complex (which was built from the scratch at less than 20% of that amount).
Today’s Nigerian government is severely lacking in qualified hands. And nothing proves this than the state of the Presidency itself.
To think that after devoting ₦13 billion to the State House Clinic in the last five years, it is virtually useless as we face the most significant public health challenge of our national life.
That is a pointer to the state of our federal government. The second and perhaps more important thing is that we did not have to deal with a worldwide pandemic of this extent (although we had the H5N1 incident).
It’s delusory to borrow $6.9 billion now
As it stands today, the world is too preoccupied with its challenges to prioritise Africa, and so we have to prioritise ourselves. The issue of Nigeria wanting to borrow $6.9 billion at this time shows the almost delusory state of our government.
No one has that type of money to throw about. China and America, previously our two largest creditors, have taken hits to their economies to the tune of trillions of dollars. If they could, they would consider taking from us at this stage.
Why is it that the Nigerian government is always quick to want to borrow at every instance?
It shows a lazy mindset and an inability to take those sacrifices necessary to get the economy into shape. Worse still it proves that we do not, as of yet, have the ability to think outside the box for genuine solutions.
We cannot be looking to borrow huge sums at the same time our officials are taking delivery of foreign made luxury cars. We cannot be considered a serious country when we refuse to cut down on profligacy and instead seek outside help to fund our inefficiencies.
Even in our own individual houses, when things get tight, the first thing we should do is cut down on unnecessary expenditure and then you look for creative ways to generate funds and develop our household economy, before we even seek outside funding.
A situation where the Nigerian government always seeks outside funding, which, by the way has to be repaid if ever granted, displays an inadequacy in the thinking process of our leaders at the moment.
How to avert economic collapse, social upheaval
So, other than asking for debt relief, what can we realistically do to protect ourselves from the type of economic collapse that could lead to social upheaval in Nigeria? We can start from where we have the most influence, the global oil industry.
To save our economy, Nigeria must engage in immediate shuttle diplomacy to get Saudi Arabia and Russia to settle their differences and end the price war that is affecting the price of oil almost as much as the pandemic.
The Organization of Petroleum Exporting Countries (OPEC) cartel is more vulnerable than Russia right now.
Yes, Russia is also vulnerable, but so are we. Russia has an almost stable gas market in Europe. We do not. So we are much more vulnerable.
This price war is not just affecting Nigeria and Angola badly, it is also affecting the valuation of ARAMCO and delaying vital decisions, which are troubling signs. Nigeria must bring her weight (like we had done in the past) to bear to force an early cessation of hostilities so that oil prices could start looking up.
