In Ghana the conversation in the Senate and
on the media has been direct— Place a moratorium on Government
borrowing for one to two years prior to any election. Nigeria is yet to
have its conversation despite worse crisis. Nigeria has been borrowing
aggressively in recent years. The Jonathan government borrowed
1.1 billion from China in
July of 2013 for “Abuja light rail” project and airport repair. This
loan was to be repaid in 20 years and came at an interest rate of 2.5%.
Rewinding a bit, the Jonathan government launched into action in 2010
with an almost $1 billion loan
, a$915 million concessionary loan from
the World Bank to be repaid in 40 years after 7 years loan-draw period.
At this time, Nigeria’s external debt stood at $3.98 billion.
The
House of Reps approved a borrowing cap of $7.3 billion for 2013-2015;
while Nigeria borrowed $4.4 billion from the World bank with $1.8
billion disbursed and the rest attracting service charges,
Business Eye reports. In November this year,
Jonathan borrowed another almost $1 Billion from
the International Development Association of the World Bank, to
“diversify the Nigerian economy.” The $945 million loan repayable in 20
years at an interest rate of 1.5% and service fee of 0.75%. Nigeria has
the highest borrow rate in Africa, period. According to Business Eye,
Nigeria has become the largest recipient of loans from the International
Development Agency (IDA) arm of the World Bank between 2009 and 2012
and currently has the largest outstanding IDA portfolio in Africa, ahead
of Kenya and Tanzania.
Additional loans like the $1 Billion to
supposedly fight Boko Haram, paint a picture of a nation that lives off
of financial indebtedness. We also have dozens of other loans from
varying counties, including the
$100 million loan from
the Indian Import-Export Bank in 2012 for Kaduna, Enugu and Cross River
States, which is to be paid back in 10 years at 2% interest rates. He
who goes a borrowing goes a sorrowing they say. A unique example out of
the African region which defies the need for loan dependent development
is that of Kano Governor in North West Nigeria, Rabiu Kwankwaso who
steered significant development in his State, one-third the population
of Ghana while actually paying off past debts and keeping the State 100%
debt free.
Nigeria has become loan dependent under the current
administration which cannot account for the nation’s oil revenue and has
financed all partial infrastructure developments on crippling loans
that promise to send the nation into humiliating suffering and slavery
to the colonial and Eastern financial institutions for the next 40
years.
Nigeria’s
external debt increased from $3.9 Billion in 2009 to a staggering $10
Billion where it is now. Our domestic debt has also shot out of
proportion. The Government can simply not afford to pay contractors and
even its staff. The
domestic debt stands
at almost $50 Billion as at November 2014. There has been a 22% yearly
increase in domestic indebtedness from 2009 to 2014 and this shot up
even higher in 2014. BusinessDay says that what is worrying about this
worsening profile is that these debts are used for fruitless and
“unproductive” ventures.
One
has to ask, #WhereIsOurMoney? If all currently touted ‘development’ is
based on loans to Nigeria’s detriment. Neighboring English-speaking
Ghana’s predicament is quite similar. Salaries are delayed till loans
come through. In the first half of 2014, the Mahama government
borrowed a staggering GH¢6.3 Billion;
about $2 Billion dollars to add to a cumulative debt of about $20
Billion. There has been a huge conversation on limiting Government
borrowing in the West African nation of 26 million.
Both African
nations bear President’s who are accidents, so-to-say; victims of the
fortune of death to their bosses. Goodluck Jonathan of Nigeria inherited
the office when his predecessor, Umaru Musa Yar’Adua passed away in
2010. In like manner, John Dramani Mahama inherited the top job when
Atta Mills, a national favorite passed in 2012. The two leaders have
failed to win the hearts and respect of the people and would possibly
never have occupied the seats had processes gone on naturally, as such
personalities would not likely ever have been chosen candidates of any
party.
Based on current oil prices, with the barrel price dropping
from $111 to below $60/barrel as speculative and futuristic trade New
World tools continue to deliberately send the prices plunging to punish
Russia and other developing nations, Nigeria and Ghana are not just
being crippled, but are going to be dragged on their faces. With
corruption and lack of reasonable plans to diversify the economy, save
surpluses—which always end up being looted and used to finance the
billionaire private jet loving cabal—Nigeria has nothing to save itself
with and cannot afford to pay the Jonathan loans based on current oil
prices. According to
budgiT,
Nigeria is expected to have to borrow in 2015 to pay civil servant
salaries due to a grossly inadequate Sovereign Wealth Fund, compared to
other African nations… yes that is how bad it is looking.
The
rebasing of Nigeria’s economy in 2014 has put the nation in a more dire
state as this was a hallucinatory incentive to seek and be given more
loans. The Jonathan administration jumped on the opportunity this
created with the reduction of the debt to GDP ratio to single digits
opening up access to more loans which Jonathan simply indulged in. And
then came the fall in oil prices.
Nigeria devalued its currency to
try to adjust to the financial catastrophe. The Ghana cedi under
mismanagement faired as the worst currency in Africa this 2014, dropping
26% in value. The country is
depending on an IMF bailout to
save it from the impending recession courtesy of the drop in oil
prices. The nation can simply not balance its budget and as is the
routine, it is being governed by colonial powers by proxy due to its
loan dependence, who are dictating what it needs to do to President
Mahama. The drop in oil prices globally have led to reductions in pump
prices by to a $1/gallon in nations across the world; the same should
have been the case in Nigeria and Ghana, both refined petroleum product
importers, however the Mahama government has kept the price steady
because it is taxing the people an extra $0.60+ per gallon at the pump
to balance its budgets. There has likewise been no reduction in pump
price in Nigeria as the Goodluck Jonathan government is also illegally
draining this excess in indirect tax from the citizens to help balance
its budget.
The
events of January 2012’s sudden removal of oil subsidy in Nigeria and
Ghana as dictated by the IMF when the President Christine Lagarde
visited both and other West African countries December 2011, to impose
these conditions on them to assist Europe in its bailout crises, remind
us of how African puppet governments typically face similar crises and
sabotage their people to the benefit of the colonialists who are eager
for currency devaluation, loan dependence and SAP programs developed to
support Western economies to the detriment of the developing economies.
The Buhari Government of Nigeria in the 80’s was likewise compelled to
submit to such conditions but his government rejected to devalue
Nigeria’s currency and rather embarked on
trade-by-barter with
more NAM (Non Aligned Movement) nations like Brazil. Likewise these
challenges are not new to Ghana. The Rawlings cup of 1979 removed Hila
Limann who was embattled by dependence on foreign loans and the colonial
push/command to devalue the Ghanaian cedi. Rawlings
declared to resist foreign dependency and promoted a policy of self dependence. His firm reforms are regarded in the shaping of what Ghana is today.
Both
Ghanaian and Nigerian governments are quietly trying to save face as
best they can to sprint passed the upcoming elections before their
people realize the colossally disastrous situation they are in
subsequent to lack of foresight, chronic corruption and
stagnant-regressive economic development.
It is going to be tough
in Nigeria and Ghana. If it was tough before, then hold on to your seat
belts, because the ride is only just getting bumby.
