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The debate on Nigeria’s debt debacle
appears an endless cycle. Available statistics on the spiralling
figures do not add up with reasons adduced in government circles. While
government claims the various loans, both domestic and foreign, were to
facilitate the provision of basic socio-economic infrastructure that
would make for qualitative living standard for the people, Nigerians do
not seem to feel the impact, except in the huge repayment baggage they
have to bear.

Poor in riches

As the world’s
sixth highest exporter of oil and gas, it is natural to expect that
Nigeria should have no business with poverty. Between 1999 and 2009,
Nigeria earned about $200.34billion (about N30.051trillion) from
exportation of about 4.56 billion barrels of crude oil.

The recent United
Nations Development Programme’s (UNDP) Human Development Report (HDR)
for 2010 ranks the country among the poorest among the developing
economies, along with Chad, Vietnam and Yemen, with less than $1,500
per capita income, based on the 2007 World Bank country income
classification.

Though the
country’s life expectancy ratio for last year nudged a marginal
improvement from 46.9 years to 48, the human development index (HDI)
leaves Nigeria stranded in the 158th position out of 182 countries
included in the quality of life ranking. This leaves her behind such
less natural resource-endowed countries like Swaziland, Angola,
Madagascar, Kenya, Ghana, Cameroon, Djibouti, Lesotho and Uganda.

Depleted Excess crude revenue

Accumulated revenue
in the Excess Crude Account (ECA) as at 2008, with an average crude oil
benchmark price of $108 per barrel, was N1,728.48 billion, according to
the Office of the Accountant General of the Federation’s (OAGF)
records. This excluded the sum of over N706.03billion earned from
payments for petroleum profit tax (PPT) and N247.56billion for
royalties by multinational joint venture oil companies. As at December
2009, the account had been depleted to less than N72.74billion.

As at December last
year, Minister of State for Finance, Yawaba Lawan-Wabi, said the
balance in the ECA is about $3million, after the Federation Accounts
Allocation Committee (FAAC) held a secret emergency meeting in the
twilight of last month to disburse $1billion (about N150billion) to the
three tiers of government.

But, it appears the
more government earned money over the years, the more it is sinking
deeper into the cesspit of debt, though without much to show for it, in
terms of a corresponding impact in the quality of life of the people.

(Please see the fact boxes) DMO justifies

The Debt Management
Office (DMO) allays the fears of Nigerians about the continued clime of
the country’s debt profile, claiming the size of the domestic debt
stock reflects largely the cumulative effect of financing of the
country’s deficit budgets over the year, apart from investments in
public sector capital expenditure needs.

“The increases are
accounted for by different sets of factors, reflecting a shift towards
market-based funding of government deficits, borrowing for
developmental purposes and on-lending to institutions such as Nigerian
Agricultural and Rural Development Bank (NARDB), Bank of Industry (BOI)
and the Federal Mortgage Bank of Nigeria (FMBN),” the DMO explained in
its National Debt Management Framework (2008-2012) publication.

Director General,
DMO, Abraham Nwankwo, said last Tuesday in Abuja that the country’s
domestic debt profile is growing as a result of a deliberate policy by
government to focus more attention on raising funding for its
activities and services from domestic sources, rather than relying on
external sources.

“It was deliberate
for government to depend more on domestic sources, rather than
external, so that we develop other aspects of our economy, including
the bond market, the habit of long time savings and investment as well
as developing the skills by our local entrepreneurs. Nigeria now has
the capability to manage various bond markets,” he said.

Where are all the billions?

A senior lecturer,
Department of Economics, University of Calabar, Desmond Ukut, said “in
as much as it is a common practice for most developing countries to
take advantage of some of the concessionary facilities from such
international lending organisations as the Word Bank, African
Development Bank (ADB), International Monetary fund (IMF) and other
such organisations for developmental purposes, Nigeria appears to be an
exception.”

Mr Ukut said
successive governments, both military and civilian, have run the
country into debt under the pretext of utilising such loans to provide
basic amenities that would cater for the good life of the people only
for them to divert same into private pockets.

“The country is
replete with abandoned projects for which past governments collected
loans to execute, only for successor administrations to abandon them on
grounds that the money had been diverted by their predecessors,” he
noted.

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