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Nigeria’s Debt And Corruption – Slippery Slope To Perdition

August 9, 2010

In 1972, five civil servants stole what, between them, amounted to about N76000 in a case that also involved bribery.   It made huge headline news in all of Nigeria’s media and sparked off investigations by the then equivalent of the EFCC.

In 1972, five civil servants stole what, between them, amounted to about N76000 in a case that also involved bribery.   It made huge headline news in all of Nigeria’s media and sparked off investigations by the then equivalent of the EFCC.

 On a visit to my school, the then Archbishop of Lagos, Rev S I Kale, nearly ruptured an artery as he agitatedly admonished us little boys with how Nigeria had become unbelievably corrupt.  He said there were dark days ahead.  Shared equally between the five, each person stole N15000.  At today’s prices, that is N8million.

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In a recent recollection of that event someone said these days it would be a waste of time to petition such a ‘tiny’ theft, as the EFCC will reckon there  cannot be much of a bribery budget in a case of a mere N8million, and so will not even bother to investigate. 

Last year a former air force chief reportedly declared that he did not know what happened to $150 million bribe paid by Halliburton into his personal account.  Yes, $150 million—N22 billion.

Hardly a day goes now without news breaking of another big theft exposed, of a big forgery by a Nigerian, of the disclosure of another governor’s mansion abroad and bulging foreign accounts, or of huge bribes paid to Nigerian officials, usually uncovered only in the foreign country involved.

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Add to that, our gold-plated legislators, the world’s most expensive thugs some, who do little beyond engage fisticuffs and asking to be paid $1m a year for the privilege, and you will see how Nigeria is totally at the mercy of greed and larceny.

The Archbishop’s anguish, now vindicated, was that he foresaw a slippery slope of corruption, down which if the country started to slide, would take us to our situation today, where the theft of a ‘puny’ N8m will no longer raise any eyebrow.  Today, where some people will brazenly propose to spend N64bn to construct a two-mile tarmac, not inside the sea as in Hong Kong where it cost even much less, or through dense rain forest as Rio de Janeiro, but in savannah plains of Abuja airport.

Worse than today though, the Archbishop anticipated a tomorrow where, if we persist in our kleptocracy, there will be nothing left to steal or do anything else, a situation that will lead, as in many failed states, to anarchy and possible fragmentation of Nigeria into gangland, ruled by warlords.  The ingredients for gangland Nigeria are already there—stupendously rich people, ex-military officers, ethnic militia, poverty, insecurity.   And if you think it is far-fetched to steal Nigeria dry, you may be in for a surprise.

Nigeria’s corruption is a time bomb that many of us may not see because, to many of us, national bankruptcy is an abstract concept, but any country guzzling on the deadly cocktail of spectacular corruption and high indebtedness as we began to do in the last three years, cannot remain standing for long.   We have gotten away with it so far only because there is so much available to steal.  However, no resource is limitless and the greedier the people engage their revenue, the quicker and sooner, that day of reckoning.

With developed economies like Greece, bankruptcy as happened recently, is basically when government overspends its income to the extent it is unable to pay the country’s debt and other obligations.  In such democracies, it is impossible for the prime minister to simply ask the Central Bank to print more money (Idi Amin style) or illegally cart away truckloads of useless cash from the apex bank (Abacha) to pay favoured creditors.  

Independent regulators in those countries and, additionally in the case of Greece, the European central bank, monitor budgets, payments and cash supply.

Identification and admission of insolvency in a developing country on the other hand, may not happen until human catastrophes had ensued.  People usually wonder how a country like Sudan, where both government and rebels can afford hundreds of thousands of $4,000 rifles and $15,000 RPGs (rocket propelled grenades) to prosecute a meaningless war, could be bankrupt as currently rumoured.  Some may remember also how Mrs Thatcher, former prime minister of Britain was adamant that Nigeria did not need debt relief.  She said two or three Nigerians were capable of paying off everything Nigeria owed.

In the same way that most Nigerians cannot see the likelihood of our country bled dry by thieves, they do not see bribery as theft of our money.  They feel like innocent bystanders merely witnessing two persons do a bad thing.  Nothing could be more self-injurious.  

Bribery is not a charitable deed.  It is an illegal inducement to steal money, position or rights of a legitimate owner.   The givers lose nothing (except their soul), since they simply write bribery costs into their invoices.   They are one side of a bad coin.  Bribery takers are the flip side of that crooked coin.  They are the equivalent of the inside man in a bank heist.   In any case, you and I pay the final bill of their theft.  Furthermore, when thieves steal money borrowed in our name, and which is repayable over decades, they not only steal from us, they steal also from our unborn children and grandchildren and possibly more generations.

These have happened for decades, but now it looks like the chickens are coming home to roost.

After Shehu Shagari, the gentleman president was removed from office in 1983 his apologists claimed (largely proved to be true) that he did not steal money but was surrounded by thieves.  Life continued as normal mainly because we were not this far down the slippery slope to hell!   There was still a lot of money left, and more coming in, for the next set of robbers.  Jonathan might not be that goodlucky.  

 To cut it to the bones, if we continue the way we are going we will, in a layman’s language, reach the stage where there will be nothing left to steal or to do anything else.  And that will be thanks to monumental corruption and our addiction to needless borrowing.  

Nigeria’s external debt rose from nil in 1970 to a record peak of $35 billion under Ibrahim Babangida in 1990.  General Sani Abacha, to his credit, not only stopped our debt wish (pun intended) he also, with the assistance of famous old economist, Professor Sam Aluko, resisted usual enslavement tactics of foreign lenders.  By the end of Obasanjo’s second coming in 2007, external debts had been brought down, even if it is by controversial cancellation deals, from its all-time record of $36 billion to less than $8 billion.  It has now risen again, according to reliable sources, to $12 billion. (World Bank July 2010)   In three years doing practically nothing, despite our bad experience with foreign loans, despite we did not need it; our leaders have snuck more than $4 billion debt on us!

Early this year the Vanguard newspaper, along with a few others, sounded an alarm.  “In view of the gross misadventure in the area of external debt, most Nigerians would have bet against the likelihood of such recurrence in their lifetime. Regrettably, just after three years or so, there is an uncanny feeling of déjà vu, that, we are, once more on the threshold of another inexplicable debt burden as our total debt portfolio (domestic and external) have now rapidly exceeded $30 billion.  

To buttress the point again that the money had mostly been stolen, the Vanguard added, “and once again, there is nothing on the ground as evidence that the fresh loans, most of which were incurred in the last three years, have been wisely applied to improve our infrastructural deficit or the social welfare of the masses.”

Not surprisingly, the government is trying to conceal the truth.   Abraham Okonkwo, Director General of government’s Debt Management Office, in a press release in February, put Nigeria’s external debt at $3.5 billion.  The same Abraham Okonkwo was saying only last week that Nigeria’s external debt should not create anxieties.  Makes you wonder why they need to say that.

The debt profile of individual states has also risen, amidst large-scale pilferage by governors and state officials.  As early as 2004, Nenadi Usman, Minister of State for Finance under Olusegun Obasanjo, accused state governors of stashing billions abroad.  She noted that governors, soon after receiving monthly allocations of their states, usually travelled abroad to keep some of the monies in private accounts.  She asked us to open our eyes to see that as soon as allocations to states were paid, hardly any governors would be found in Nigeria in the following week.  They would be in London and Zurich and Dubai, stashing away their loot.  She asked us to look at how, in the week of allocation payments, exchange rates always jumped.  It is, she said, due to our governors flooding the market with their state allocations to buy foreign exchange.  The governors, predictably, called for her head.

Two weeks ago, someone who should know, the minister of state for Finance, dropped the bombshell that Nigeria’s cash cow, the NNPC, was insolvent.  Realising the implications, government spin-doctors went to town immediately to deny the claim.  NNPC, according to finance office officials, is in the red with the government.  The government, the NNPC maintain in turn, is in the red with them.  It has to be one or the other.  Both cannot be right.  Balance of payments can only be in favour of one of two trading parties.  Somewhere, someone is lying.   Going by what insiders have been publishing in recent weeks, corruption in NNPC is beyond imagination.

Professor Assisi Asobie and Alhaji Haruna Yunusa Sa’eed, Chairman and Executive Secretary respectively of Nigeria Extractive Industries Transparency Initiative, oil industry watchdog said, of the recent goings-on:   “We have a peculiar situation in Nigeria, where we cannot just rely on the claim of these companies that they have paid to the government or even government’s claim that it has received”.  Touché.  As Charles Ike-Okoh said a few days ago in the Nigeria Budget Monitoring Project, “the NNPC story is classic case of greed gone wrong”.

Even some of their own pots are running dry, but the concealment goes on.  Last week President of the Nigerian Stock Exchange (NSE), Alhaji Aliko Dangote, revealed that the NSE is flat broke.   While many put it down to politics, there is no smoke without a fire. 

Government denial is simply systemic.  No amount of denial can change the truth.   Every market woman, every salary earner, every student that receives pocket money, knows that when your incoming is less than your outgoings (and it does not matter if most of those outgoings goes to thieves or kidnappers), you are in trouble.  Remember how, years ago, some people who knew, sounded the alarms about corrupt bankers but which was vehemently denied by no less a person than Charles Soludo, the then governor of our central bank.

The grave danger this time is that NNPC is Nigeria’s golden goose and those who ought to know are telling us that some people have that goose on its back, knife in their hand, greed in their eyes.  So with all these alarm bells sounding about looming insolvency, where do we go?

President Jonathan might think his biggest challenge now is to clinch nomination and win elections for president.  He may be mistaken.  Bankruptcy through debt and corruption is responsible for more state failure than wars. 

Already we are seeing the collapse of our police and, in effect, law and order.  Police bribery checkpoints are now accepted like tollgates collecting legitimate fees from commercial drivers.  You could actually see police collecting and even giving change to the drivers, openly.  Reasonable people do not want to have anything to do with the police anymore.  They will report crimes only when they have to (like when they need police reports), since both the innocent and the guilty usually become victims of police extortion. 

Our education system is failing.  Last year the government reported that our schools recorded only a meagre 13% success.  Some say it is as bad as 2%.  Latest UNDP (United Nations Development Programme) figures say an average Nigerian  lives on less than 1$ a day.  It is all a classic recipe to disaster.

We need to know if President Jonathan was a part of the procurement of these loans taken in the last three years.  The loans need to be investigated and, where dubious process or usage is established, the beneficiaries must be made to forfeit property and money, in addition to other standard statutory consequence.  There is also need for a moratorium on [obtaining of] new foreign loans.

Secondly, our police and other law enforcement need a complete overhaul.  It will take a courageous leader but it must be done.  The President must urgently address the situation whereby the EFCC is now seen as going after people merely to open new channels for bribery income.

As Thomas Jefferson said, eternal vigilance is the price of freedom.  Nigeria may not go bankrupt tomorrow; she might not go bankrupt in three months, or even in three years, but surely if nothing is done to stop this crazy and corrupt slide to the abyss, the people that have robbed Nigeria blind, may yet rob her dead.

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