In view of the huge burden that debt servicing has caused Nigeria, President Bola Ahmed Tinubu has been advised to take five-pronged approaches “to prevent the country from total socio-economic dislocation.”
The advice was contained in a Press Statement by the Pan-Yoruba socio-political organization, Afenifere and signed by its National Publicity Secretary, Comrade Jare Ajayi.
“Without doubt, the current economic quagmire facing Nigeria needs far-reaching and deep-rooted steps for it to be ameliorated. One of such steps is to seek debt relief from our major creditors.
“Another is to drastically reduce the size of government at all levels. Third is to block areas of leakages of public resources, especially finance. Fourth is to embark on policies or programmes that are capable of engaging millions of unemployed people, old and young, in the country. The fifth step is to ensure that security and safety of lives and properties become permanent feature in the Nigeria firmament.”
“Nigeria is the fourth most indebted country in the world, with a $13 billion debt burden as of June 30, 2022 according to the United Nations’ International Development Association (IDA).
“Similarly, the country ranked fifth globally among countries with the highest incidents of organized crimes as revealed by a former Chief of Army Staff, Lt-Gen. Tukur Buratai (retd.).
“Buratai spoke last week, quoting the Global Organized Crime Index, during a one-day International Conference on Organised Crimes in Abuja. The four countries ahead of Nigeria in organized crimes were Democratic Republic of Congo, Colombia, Myanmar and Mexico.
“And high incidence of crime is related to unemployment, economic dislocation and dysfunctional welfare system,” the statement read.
According to Ajayi, the five steps suggested would have to be pursued simultaneously for the inherent benefits to be harnessed effectively and on time.
“To avoid ambiguity or misrepresentation, Afenifere spokesman fleshed up each of the ideas suggested in the following manner:
“At the moment, Nigeria’s debt profile is so huge that it is spending about 97 per cent of its revenue to service the debts according to many official sources including the Debt Management Office (DMO), Federal Budget Office, Ministry of Finance and the World Bank.
“It can be recalled that when the World Bank disclosed that Nigeria spent 96.3 per cent of its revenue to service its debt in 2022, the then Minister of Finance, Hajia Zainab Ahmed objected, saying that it was ‘only’ 80.6 per cent. If a person earns N100 and has to use N80.5 of it to service his or her debts, how would N19.5 be enough to take care of feeding, transport, health, education, care for the family etc.?”
“Incidentally, the Director-General of the Budget Office, Mr. Ben Akabueze, confirmed that the country is servicing its debts with an amount that is above the revenue it is generating. He stated this at several fora, including when he spoke at a Retreat for the 10th National Assembly Members in Abuja in May, this year,” he said.
According to Ajayi, “The situation is such that very soon there may be no more fund for the provision of social services and infrastructure.
He stated to prevent attendant possible social chaos in this respect, President Tinubu needs to embark on diplomatic shuttles to get debt forgiveness from our creditors.
“Doing so would certainly be herculean in view of a similar benefit we enjoyed under former President Olusegun Obasanjo circa 2005 but which we later mismanaged.
“But given the potentials of Nigeria and the possibility of President Tinubu to convince everyone that his own administration is going to be different, it is possible that the creditors may listen to the plea.
“For such a plea to succeed however, there is an urgent need to drastically cut down on the emolument of public officials, especially political office holders, block the holes through which public funds leak and wage a serious war against corrupt officers – presently in or out of office. It is only by doing these three things that those we approach for debt forgiveness would listen to us.
“For instance, the National Assembly cornering N70 billion out of the N500 billion announced for palliatives is not only uncalled for, it demonstrated clearly how insensitive our elected officers are to the plight of average Nigerians. The President should prevail on them to rescind their decision in this regard,” he said.
Ajayi stressed that it can be recalled that the World Bank, in the June 2023 edition of its publication titled; ‘Nigeria Development Update’, stated that Personnel costs and Debt Servicing in 2022 exceeded government revenue. In other words, government had to borrow money to be able to pay its personnel as well as service its loans. The actual amounts spent came to 102 per cent of the revenue generated.
“This, in a way, explained why infrastructural development stagnated and social services virtually grounded to a halt. It also explained why cost of living spiked, unemployment soared – leading to an increase in crime rates and increasing loss of faith in the country as reflected in the Japa syndrome (the tendency by many to want to emigrate),” he said.
Ajayi then called on Tinubu administration to make the “resuscitation of moribund industries in the country one of the major priorities.”
“Doing so will create employment, reduce crimes, boost the nation’s economy, strengthen the Naira and earn the country foreign exchange. Government should refrain from increasing taxes and fees for now but explore ways of enhancing productivity and reduce pains,” he said.
He commended President Tinubu for the decision to review the N8,000 palliative meant to cushion the effect of subsidy removal.
“Palliatives, to be really helpful and effective should be welfare-enhancing in nature and not be in form of unregulated cash dole-out. Such a money should rather be channeled towards the things that cash is used for.
“For instance, passenger and luggage vehicles can be procured and allocated to all the local government areas in the country.
“Boats should be earmarked for riverine areas. These vehicles should be put at the disposal of local government authorities and transport unions across the country so as to be of benefits to the target audience – the masses.
“Fares for the vehicles should be about one-fifth or a quarter of the prevailing rates. The vehicles should be given to the transport unions at a highly concessionary rate. Similarly, government can buy food items directly from farmers and make them available at very cheap prices in designated areas.
“As a lasting solution to the high cost of petroleum products, conducive atmosphere should be provided for private importers to import them with relative ease while efforts are geared towards making the refineries in the country commence production for the commodities not only to be available, but to be cheaper. Their availability would also boost the economy and earn the country foreign exchange,” he said.
The Afenifere spokesman stressed the need for Mr. President to prevail on electricity distribution companies to stop their attempts to increase tariffs for now.
“For one, there has been not much improvement in electricity supply to justify tariff increase. But more importantly, Nigerian masses are presently over-burdened with sundry taxes and high costs for services and commodities.
“The Discos must not be allowed to deepen the miseries of hapless Nigerians. Similarly, recent hikes in school fees across the country should be rescinded so as to prevent more hardship for the people and higher number of school drop-outs,” he stated.
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