Living with debt, both internal and external, has become part of our lives. I’m not sure the thinking in the government circle is complete without checking the next source of borrowing. Despite the current difficulties in servicing and paying debts due, the eagerness to borrow money in the government circle remains evident. When I read in the newspapers last week that Nigeria had secured a loan of $1.5 billion or more than 100 billion naira backed by the United States to provide solar energy infrastructure in Nigeria, I felt sad that we haven’t yet learned a lesson about over-indebtedness. The supporting argument would be that the loan was not for consumption but for investment. If all of these loans have been successful, we shouldn’t be in this mess right now because not all of the debt that we currently insure and pay off was consumption-based. Efforts are always mismanaged.
The managing director of the company that facilitated the loan, Adam Cortese, explained that it was a government-to-government loan from the US-EXIM bank to the government of Nigeria and that it was granted at a rate concessional, repayable over 20 years. The offer is fantastic if well managed, but will it be? Time will tell us. But, let’s learn a few lessons here. The US government has used its institution to finance the production of solar equipment and to push sales to other countries, thereby supporting the solar business to continue contributing to its gross domestic product and creating jobs. The company is not the one giving us the loan but the US government through its EXIM bank while the company would be paid to continue to be in business. How much of these efforts does our government give? Let’s digress for good.
A young man, Nnadi Chimaobi Michael, from Enugu State “invented” the drone, which is a high-tech machine that countries around the world spend millions to buy for security, the Nigerian government does not didn’t look to see how he could be helped to help the nation until another country, Finland, came looking for him. There was David Opeteyibo before him. He did it at 17 and got no recognition or support from our government until today. Another, Mustapha Gajibo, is currently converting gasoline-powered vehicles to battery-powered vehicles in Maiduguri and is being phased out. Even the university, from where he dropped out, should have reabsorbed and seen how they can help him help them glorify themselves. We have a science and technology ministry with an innovation department. There are many more such inventions and innovations that will not catch the attention of our government. The government prefers to seek loans to buy drones or borrow money to import fuel and batteries.
Having traveled to certain states or regions of this country or having watched and read a great deal about the industrial enterprises of this country, I believe that the so-called imported infrastructure for which we borrow money and create jobs elsewhere can be achieved or provided here. Provide funds to some of our universities of technology and challenge them to produce what you want, or in short, go to Aba in the East or some companies in Lagos and ask them to produce these items and you will be surprised to have them delivered. Like many African countries, our government does not look inward to solve our problems. This is due to either an inferiority complex or a calculated personal benefit that will come from such actions.
It was also last week that the Federal Government inaugurated a panel on Made in Nigeria technologies as reported in the punch. The information was to the effect that a Memorandum of Understanding exists between the Federal Republic of Nigeria and the Czech Republic on the Delta 2 project. Part of the arrangement would be the transfer of technology, particularly in the field of petroleum processing. Finally, it would be a ceremony like the other ceremonies. The country does not exploit the efforts of its talents. It does not promote education at all, much less quality education, and it wants to take advantage of other countries’ technology. Technology cannot be transferred to illiterates or mediocre graduates. More than half of the universities in the country or more than 75% of university students have been at home for six months and the government is pretending that everything is fine with its young people and the future of the country! What government? Which country ?
The government believes Nigeria Air is the next priority. Does having an airline solve the problem of poverty in the country? Does it add positive value to the country’s image as a third world economy? To make matters worse, the airline would take off with aircraft leasing. Another source of debt accumulation. If the government is to revive an airline business, it should use some of the planes from the presidential fleet. How many of these planes are used? The president, Major General Muhammadu Buhari (retired), promised to sell some of the planes when he took office in 2015 as there were too many of them and a waste of resources. It did not and there is now a need for aircraft to operate Nigerian Air. Why lease and pay for aircraft services when you have plenty of unused aircraft on the ground in the presidential fleet?
I worked as a reservations agent for Nigeria Airways in the 1970s and was aware that government officials were flying without paying even when they had collected money for the trip. This law has also allowed staff to engage in acts of corruption that will lead to the bankruptcy of the company. I remembered a situation where one of our senior officers collected money from private passengers and did not put it back in the airline’s account until a passenger who decided not to travel comes to get his money. This officer was off duty, but the duty clerk found that the passenger had been issued a government pass to be paid for later. This problem led to the investigation which opened other irregularities and the dismissal of many employees. Eventually, corruption killed Nigerian Airways on its first outing.
We had another airline (Virgin Nigeria) as a joint venture in 2004. Nigerian institutional investors held 51% of the shares while Virgin Atlantic held the remaining 49%. Its parent company was the NICON Group with Jimoh Ibrahim as chairman. This airline also descended into corruption, the modus operandi of which was no different from Nigeria Airways. In fact, when the federal government intervened to resuscitate companies with financial problems between 2010 and 2012, an intervention fund was provided to Virgin Nigeria and no one was able to account for what happened to money until today. So, if out of pride, or to have the opportunity to travel for free, it is necessary to inaugurate another airline, please use the surplus planes of the presidential fleet. Leasing is another form of borrowing; we do not see the company being able to pay its share.
Since this writer wrote about “NNPC Limited and the rest of us” three weeks ago, there have been many clarifications about the ownership of the “new” NNPC. I still have my doubts but it’s not important now. When NNPC Limited was formed last month, chief executive Mele Kyari promised that the new team would be run either effectively and efficiently or completely different from what it had been before. For the first time in decades, Nigeria was unable to take advantage of the oil crisis and make gains to offset its debt. OPEC said crude oil production in Nigeria fell by an average of 74,000 barrels per day in July 2022, with a concomitant loss in revenue of around $241.1 million in the month.
Besides the unchecked corruption of the federal government and its agencies, such as the NNPC, the inability of the NNPC to function optimally and credibly is largely responsible for the current over-indebtedness. The “new” company should no longer be interested in importing and subsidizing fuel or maintaining the management team and workers or financing Dangote’s petrochemical business as a partner, but invest in new cost-effective refineries, and lease or sell existing refineries with outdated technology. The company should start contributing to the reduction of the country’s foreign debt through such measures.