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In every electoral season, politics and discussions about political parties and candidates that will take over governance at the federal, state and local levels usually trump every other discussion. Political discussions are so pervasive and dominate print, electronic, digital and social media. Since politics to a great extent determines the trajectory of every other facet of governance, it is imperative to infuse political discourse with practical issues and challenges in the economic, social and other relevant sectors. This discourse focuses attention on the economy with a specific interrogation of the level of Nigeria’s public debt.
The Debt Management Office indicates that Nigeria’s total public debt at the end of the first quarter of 2022 stands at $100.069 billion. Converted to the dollar at the prevailing rate of N415.75 to the United States dollar, it amounts to N41.604 trillion. This excludes the sum of N19 trillion the Federal Government owes the Central Bank of Nigeria through ways and means borrowing. When N19 trillion is converted to dollar at the above rate, it comes up to N45.7 trillion. Adding the sum as posted on the website of the DMO and the CBN ways and means figures gives the sum of $145.769 billion or N60.6 trillion. The total sum outstanding is about four years of federal budget estimates combined.
The debt figure on its own is hanging. But when it is contextualised against the fact that the Federal Government is deploying about 97% of its revenue to debt service, a great economic and fiscal challenge crystallises. This was the percentage of retained revenue to debt service released to the public by the Minister of Finance, Zainab Ahmed, at the public presentation of the 2022 federal budget. The Acting Accountant-General for the Federation confirmed what has been public knowledge since the minister’s presentation—that the Federal Government has been borrowing to fund personnel, overhead and capital expenditure and pay salaries. Indeed, from the trajectory of the increase in debts in the last quarter, it is apparent that the Federal Government may need to spend its entire retained revenue and still borrow some more to be in a position to service its debts.
This is the type of challenge that should dominate political discourse in terms of political parties and candidates presenting ideas on how they will tackle this challenge. Unfortunately, the discourse is not about the economic, social and security challenges that have enveloped the nation. Rather, it is about the ethnicity, religion and social background of candidates and the leaning of political parties on these issues. These raise some posers. Is it possible that some of the candidates, especially those aspiring to the presidency of the Federal Republic of Nigeria, do not understand the magnitude and gravity of this fiscal challenge? Do they understand that from day one of their presidency (if elected), they would be looking for resources to pay salaries and meet basic government obligations? Is it possible that some candidates think that oil is still flowing and there is a fiscal buffer which they will rely on to run the government?
Now that the presidential candidates have emerged, it is imperative that the media begins the agenda-setting for candidates and political parties to unveil their plans on how to engage these critical challenges. It is not the kind of engagement we had in previous presidential debates where candidates who knew they had nothing to offer and would have been disgraced at real presidential debates avoided the debates without any electoral setbacks. It is about patriotic media engagement where vacuity in the lack of functional and modern ideas of economic governance are pointed out and made to command the headlines and editorials. This will ensure that the electorate understands the respective capacities of the candidates so as to make properly informed choices not based on primordial sentiments.
Furthermore, the media should inform the electorate that in our extant fiscal situation, the elbow room or the fiscal space is almost not available. Our debt situation especially from the ways and means stock has been accumulated through illegality, impunity and outright contempt for the rule of law and its due process. The Central Bank of Nigeria Act in S.38 states that the Bank may grant temporary advances to the Federal Government in respect of temporary deficiency of budget revenue at such rate of interest as the Bank may determine. The total amount of such advances outstanding shall not at any time exceed five per cent of the previous year’s actual revenue of the Federal Government. All Advances made to the Federal Government shall be repaid – as soon as possible and shall, in any event, be repayable by the end of the Federal Government financial year in which they are granted and if such advances remain unpaid at the end of the year, the power of the Bank to grant such further advances in any subsequent years shall not be exercisable, unless the outstanding advances have been repaid. The advances shall also be repaid in such form as the Bank may determine provided that no repayment shall take the form of a promissory note or such other promise to pay at a future date or securitisation by way of issuance of treasury bills, bonds, certificates or other forms of security which are required to be underwritten by the Bank.
The CBN on the request of the Federal Government has been advancing way beyond the five per cent of previous years’ actual revenue and the advances have not been paid within the years in which they were granted. But the CBN continued to advance more sums contrary to the provisions stated above. Sometime in 2021 when the Federal Government announced plans to securitize the CBN advances over a long-term period, the outstanding sum was just $25 billion. That was a good opportunity to stop the charade of advances and take concrete steps to reduce the cost of governance and cut leakages. But the retired Major General Muhammadu Buhari-led Federal Government would rather continue borrowing without thinking of how to pay it back. The media needs to educate Nigerians that the Fiscal Responsibility Act permitted borrowing only for long-term capital expenditure and human development. As such, borrowing for personnel and other recurrent expenditure is illegal and ultra vires the powers of the federal and state governments.
Popular awareness needs to be raised that most of our long-term loans will only be due for repayment in 10 to 15 years. When going by the natural course of events, many of the present occupants of power and the aspiring ones, would likely no longer be available on Planet Earth. They would have collected loans in violation of the law, mismanaged the proceeds and left the repayment to the present young generation. This brings to the fore the need for sensitisation and empowerment of the young generation who are already suffering and will suffer more in future for the economic sins of the fathers.
Let the engagement of political parties and candidates on their plans to resolve our economic and fiscal challenges start immediately. It cannot wait any longer.
