Tuesday, 6 August 2013

Debo Adejugbe: Nigeria – A presidency proudly made in China (Y! Politico)

In its editorial titled “Jonathan and the Chinese bear hug” on July 25, 2013, The Punch newspaper analyzed the recent loan agreement sealed between the Presidency and the Chinese government. Securing a loan in itself is not a problem, but it has to be realistically examined with the dire conditions presently obtainable in the country. The first sentence of that editorial set the tone for the rest of the piece: “For a President who regards securing foreign loan agreements as a sterling achievement, Goodluck Jonathan is understandably rather pleased with himself.”

the Nigerian government in 2005 secured a debt forgiveness pact to the tune of $18 billion where they subsequently paid $12 billion to clear off the remainder. Since then, it has been one tale of woe after another on why we have failed to make the most of a debt forgiveness we did not even qualify for in the first place. According to a study by A. S. Bakare on the debt relief, it did not achieve the intended purpose, claiming that “Governments of the creditor countries must have granted debt relief to Nigeria rather because of political than of economic reasoning.” This indeed seems to paint the real picture.
Presently, according to figures released by the Debt Management Office (DMO), Nigeria is indebted to the tune of $50.91 billion with external debt accounting for $6.92 billion ($10 billion if you trust the CIA better) while the domestic debt stands at $43.99 billion. On June 4, 2013, the DMO announced that by 2015, our debt profile would have risen to $55.4 billion. That means we would have acquired more than $4 billion in outstanding in just two years and if we have to go by the DMO’s projection of our external debt in three years, we would have something like: 2013 at $12.165.10 billion, rising to $14.585 billion in 2014 and $16,765 billion in 2015. The Minister of State for Finance, Dr. Yerima Ngama, has reiterated that we will keep borrowing till kingdom come.
While it is good to commend the President for trying to make our infrastructures work, it is important to revisit the success of similar partnerships with China in the past. He secured a $1.1 billion loan agreement, in which “$500 million will go into building airport terminals in Lagos, Abuja, Port Harcourt and Kano and $600 million for the completion of the Abuja light rail project.” These constructions, under the agreement, will be done by Chinese companies.
First, the railway rehabilitation project given to the Chinese in 1994/5 has yielded no positive result. The refurbishment of the Lagos-Kano rail line and the Lagos-Ibadan-Ilorin-Jebba line awarded to them also has shown that our government is only bothered by courting donors and creditors while the main aim of securing such loans remains a smokescreen.
If we also take into account the salaries being drawn by our political office holders and the much ridiculed $7.9 billion borrowing plan approved by the Senate in 2012, coupled with the fact that no major or reasonable achievements have been recorded in spite of these loan deals; we can safely assume that the government has a found a new way of fleecing our generations unborn. The minister of Finance has made it known that these loans are payable in 15 – 20 years and this is where my grouse lies.
What exactly is the purpose of loans acquired, payable in 20 years, but will add no value whatsoever to the present or future drive to move the nation forward? How do we know that these loans are actually up to the announced values, bearing in mind that there is no grey area for most Chinese companies when it comes to contract issues?
Isn’t it funny that our government deems it fit to borrow from the Chinese, because we lack the required funds to sustain our developments but they have done absolutely nothing to address the constitutionalized looting approved as salaries for our public officials? Isn’t it ironic that the Presidency dispatched a jet from its Presidential fleet in June 2013 to convey the Malawian President, Joyce Banda, to Abuja? The irony is lost on them, that Banda sold her presidential fleet to save cost while Jonathan has increased his fleet to Ten (10) in Three (3) years. How can we keep borrowing when we have that much?
It is actually obvious that the blokes at the Presidency are very slow. Considering that Banda sold her Presidential plane, 35 Mercedes Benz limousines and also cut her salary by 30% to lead by example, the Nigerian government chose the wrong person to extend such generosity. One would have expected a Goodluck Jonathan to sit with President Banda and make enquiries on how such measures has fared, with an attempt to walk a path similar to that, for public good.
According to The Punch, “Over N9 billion is believed to be spent on the maintenance of the presidential fleet each year, while the PAF required 47 Nigerian Air Force officers, 173 airmen/airwomen and 96 civilian employees on full time call in 2012.” This paints the picture of a government not in grasp with the times –borrowing heavily and spending senselessly. This is further seen in the government’s attempt to obtain loans to build power plants when that sector is in the process of privatization.

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