This is it –the inexplicable paradox of an oil-rich country, Nigeria getting caught, deep into the marshy quagmire of a debt trap, to no other country but China! Recently, the House of Representatives raised an alarm over lethal clauses in Article 8(1) of the commercial loan agreement signed between Nigeria and Export-Import Bank of China. It allegedly “wills the sovereignty of Nigeria” in the $400 million loan for the Nigeria National Information and Communication Technology (ICT) Infrastructure Backbone Phase II Project, signed in 2018.
It specifically states that: “The Borrower hereby irrevocably waives any immunity on the grounds of sovereign or otherwise for itself or its property in connection with any arbitration proceeding pursuant to Article 8(5), thereof with the enforcement of any arbitral award pursuant thereto, except for the military assets and diplomatic assets”. This is a serious matter, isn’t it?
From the observations of the chairman, House Committee on Treaties and Agreements, Hon. Ossai Nicholas Ossai, the Minister of Transport, Rotimi Amaechi has questions to answer with regards to some of the agreements signed between Nigeria and China. But what did Amaechi say? He warned that the Chinese authorities may not sign the $5.3 billion Ibadan-Kano rail line loan if the parliament continues to investigate the agreement! Can you believe that?
Ossai said: “I have also seen from the Ministry of Communications where Nigeria signed off some certain level of its sovereignty if part of the clauses is breached? So, we have every right to question that because anything that is going to happen will happen to our generations unborn. Whether we get it from China or not is immaterial”. This is point blank.
But one’s worry over the years is the way and manner the federal and state governments have turned deaf ears to series of warnings, given by experts on the economy on the grave implications of getting the country into an avoidable debt trap.
It would be recalled that back in June, 2017 both Pat Utomi and Bismarck Rewane expressed similar concerns over the increasing debt burden at both the state and federal levels. It came as a similar warning signal by the globally recognized technocrat, Dr. Akinwunmi Adesina, President of the African Development Bank (AfDB). According to him, Nigeria was as at a year ago using 50 per cent of its revenue to service its debts, compared to the average of 17 per cent for other African countries! This is unsustainable.
Furthermore, going by the frightening figures made public by the Debt Management Office (DMO), the total debt stock stood at some humongous amount of N24.047 trillion as at March 31, 2019. While that of the federal government stood at N17,086, trillion, those of the states, including the Federal Capital Territory, FCT was N 7,860 trillion. Reports have it that N560 billion out of these was borrowed in only three months!
As at September 2018, the debt stood at N22.43 trillion. But as at June 30, 2015 the country’s total debt was N12.12 trillion. That means that within the first three and a half years of the current administration the debt rose by N10.31 trillion which is 85.06 %.The external debt component of both the federal and state governments including the FCT increased by 109.21% according to the DMO. Are you not worried?
In fact, on May 21, 2020 the online platform ‘Nairametrics’ in its ‘Economy & Politics’ page warned about Nigeria falling into China’s debt trap. According to Dr. Bongo Adi, the Director of Centre for Infrastructure Policy Regulation and Advancement (CIPRA), Nigeria lacks accountability, transparency, and responsibility to repay its loans. He is of the Lagos Business School and surely knows his onions.
We surely do not need rocket science to understand that the country’s economic growth is undermined by the huge debt stock as well as other obvious factors including sheer profligacy in running government apparatus. Crass corruption in high places and the huge pay package of political office holders, with that of our lawmakers ranking amongst the highest in the world, have contributed in making Nigeria to become the poverty capital of the world.
Our current political leaders should prevent Nigeria being taken over by China because all Chinese loans are tied to infrastructural developments. In fact, some of the African debtor nations have had to forfeit some to China. For instance, $7.4 billion of Zambia’s total $8.7 billion foreign debt is owed to China. It was reported in late 2018 that China may soon take over the state electricity company ZESCO as a form of debt repayment since the country had defaulted!
Also, Kenya may soon lose its largest and most lucrative port, Port of Mombasa to its creditor (China) after it defaulted in payment. This could force Kenya to relinquish control of the port to China. There is cause for serious concern.
This rather scary economic situation throws up some salient questions, all begging for answers. Have we, as a country not been making money from crude oil sales over the past few years? What about the huge revenues from other sources such as the multiple company taxes including VAT, inflow from the ports and that from the Nigeria Customs Service?
Where have all these gone in the face of decrepit and dilapidated infrastructure, annual budget deficits, fragile healthcare system and a drastic dip in the standard of education across the country?
With 23 out of 36 states unable to pay salaries to civil servants as at when due, in spite of the so called bailout funds, one cannot but remember the question Prof. Ayodele Awojobi (of blessed memory) asked the Alhaji Shehu Shagari-led administration that: “Where has our oil money gone?”
Your guess is as good as mine.
Worsening the situation is that many of the commercial banks are not lending to the real sector to boost manufacturing. Sundry consumables including textile materials and electronic equipment are either being imported daily at astonishing rates, or smugglers are having a field day. All these have no doubt led to an unprecedented unemployment level and an upsurge in the wave of crimes including armed robbery, kidnappings, banditry, arson and hideous ritual murders!
The question now is, who will pay these huge debts? Will the burden being left by the reckless political class not be too weighty for the lean shoulders of our jobless children? Will they not be turned to slaves and beggars in their own country by the creditor nations?
To the executive and legislative arms of government, the time to reverse the drift into deeper debt trap is now. Let us live within our means. A stitch in time saves nine!
– The Nation.