Feature/OPED
Debt Trap and Incoming Administrations
By Jerome-Mario Chijioke Utomi
It is no longer news that some of the first-term governors-elect will face many months of unpaid workers’ salaries and mounting pension liabilities, as well as agitation for the implementation of the nationally agreed minimum wage, rising inflation, escalating prices of goods and services, and dwindling purchasing power.
These incoming governors, about 17 of them, according to reports, will have a difficult time boosting the economies of their individual states because they will take over at least N2.1 trillion in domestic debt and $1.9 billion in foreign debt from their predecessors.
It is equally common knowledge that in January 2023, Ms Patience Oniha, the Director-General of the Debt Management Office (DMO), while fielding questions from journalists at the public presentation and breakdown of the highlights of the 2023 appropriation act in Abuja, noted that the incoming federal government would inherit about N77 trillion as debt by the time President Muhammadu Buhari’s tenure ends in May.
Aside from being an indication that Nigerians should expect a tough time ahead or, better still, may not anticipate a superlative performance from the incoming administrations as they will, from inception, be overburdened by debt, what is, however, ‘newsy’ is that each time the present federal government went for these loans, Nigerians were usually told that the loan seeks to stimulate the national economy, making it more competitive by focusing on infrastructural development, delivery of inclusive growth and prioritizing the welfare of Nigerians to safeguard lives and property; equipping farmers with high tools, technology and techniques; empowering and enabling mines to operate in a safe and secured environment and training of our youths through the revival of our vocational institutions to ensure they are competitive enough to seize the opportunities that will arise for this economic revival.”
From the above, it is evident that the nation did not arrive at its present state of indebtedness by accident but through a well-programmed plan of actions and inactions that engineered national poverty and bred indebtedness. The state of affairs dates back to so many years in the life of the present federal government.
To explain, for years, we were as a nation warned with mountains of evidence that this was coming, it was also pointed out that under the present condition of indebtedness, it may be thought audacious to talk of creating a better society while the country battles with the problems of battered economy arising from indebtedness, yet, our leaders who are never ready to serve or save the citizens ignored the warnings describing it as a prank. Now we have learnt a very ‘’useful’’ lesson that we can no longer ignore.
In 2019, the country’s rising debt profile dominated discussion when the Senate opened debate on the general principles of the 2019 Appropriation Bill. Most of the contributors to the referenced debate asked the executive to exercise some level of caution on its borrowing plan in order not to return the country to a heavily indebted nation it exited in 2005 through Paris Club debt relief.
Senate Leader, Mr Ahmed Lawan (as he then was) kicked off the debate when he read “A Bill for an Act to authorize the issue from the Consolidated Revenue Fund of the Federation the total sum of N8,826,636,578,915 only, of which N492,360,342,965 only is for Statutory Transfers, N2,264,014,113,092 only, is for Debt Service, N4,038,557,664,767 only, is for Recurrent (Non-Debt) Expenditure while the sum of N2,031,754,458,902 only is for contribution to the Development Fund for capital Expenditure for the year ending on 31st day of December 2019.”
While noting that the budget deficit will be funded through borrowing, Lawan, among other things, stated, “About 89% of the deficit (N1.65 trillion) will be financed through new borrowings while about N210 billion is expected from the proceeds of privatization of some public enterprises. Debt Service/Revenue Ratio, which was high as 69% in 2017, has led to concerns being raised about the sustainability of the nation’s debt.”
Reacting to Lawan’s words, many Nigerians raised the alarm about the country’s rising debt profile. They noted that though the budget estimates should be given expeditious consideration and passage in view of the time already lost, the borrowing plan contained in the Bill should be properly scrutinized. They insisted that scrutinizing the borrowing plan became necessary to prevent the country from exceeding its borrowing limit when juxtaposed with the Gross Domestic Product (GDP) ratio.
Even some Senators, in their submissions, frowned at the nation’s increased borrowing proposals on our yearly budget, which they described as becoming unbearable.
“Yes, money must be sought by any government to fund infrastructure, but it must not be solely anchored on borrowing, which in the long run, will take the country back to a problem it had earlier solved.
“Besides, there are other creative ways of funding such highly needed infrastructure.”
Others at that time were particularly not happy that the debt profile of the country would soon rise to $60 billion from less than $20 billion it was before the present government came to power in 2015. While they noted that the components of the $60 billion debt profile include $23 billion external debt and $20 billion local debts, these concerned Nigerians observed with dissatisfaction that another $12 billion was already being processed for presentation to the National Assembly to finance Port Harcourt to Maiduguri rail lines.
Still on the 2019 budget borrowing proposal, it noted that “Nigeria is gradually turning to a chartered borrowing nation under this government all in the name of funding infrastructure. “This must be stopped because the future of the country and in particular, lives of generations yet unborn are being put in danger.” Even with the high level of indebtedness of the country, “the government in power is planning to further devalue the Naira to about N500 to one US dollar.”
Similarly, in February 2022, economic experts going by media reports urged the Federal Government to seek a debt moratorium and reduce the cost of governance to reduce funds expended on debt servicing, as it stands as the best available option.
This, according to them, will enable the government to suspend payment for now and re-strategize – particularly, the government cannot continue to service its rising debt profile at the expense of meeting the competing needs of the people, Economic analysts recently handed a similar expert warning that the federal government’s soaring borrowings could eventually suffocate the country if not mitigated.
In the first quarter of 2022, while speaking in Akure, Ondo State capital, at the 32nd annual Seminar for Finance Correspondents and Business Editors themed: ‘Exchange Rate Management and Economic Diversification in Nigeria: The Pave Option,’ the experts hinted that the government’s plans a fresh N6.3 trillion debt might be added to the current debt stock of N39.556 trillion ($95.779 billion as at December 31, 2021) to ultimately push the country’s total debt stock to N45.86 trillion by December 2022.
Notwithstanding this unhealthy trend, they argued it was high time the country invested more in boosting local production and export-oriented infrastructure before the huge debt burden sank the country.
Indeed, from the above torrents of explanation/concern expressed by these experts, this piece clearly agrees that ‘Nigeria’s debt stock has finally become an issue that calls for a more drastic approach to support the fiscal and monetary authorities to tow the nation’s economy out of the doldrums.
Qualifying the above sad account as a bad commentary is the awareness that despite these prophecies of foreknowledge which deals with what is certain to come, and prophesy of denunciation, which on its part, tells what is to come if the present situation is not changed; both acting as information and warning respectively, the President Muhammadu Buhari led federal government has become even more entrenched in borrowing, ignoring these warning signals.
In 2020, one of the reputable national newspapers in Nigeria, in its editorial comment, among other observations, noted that Nigeria would be facing another round of fiscal headwinds this year with the mix of $83 billion debt, rising recurrent expenditure, increased cost of debt servicing; sustained fall in revenue; and about $22 billion debt plan waiting for legislative approval. It may be worse if the anticipated shocks from the global economy, like Brexit, the United States-China trade war and the interest rate policy of the Federal Reserve Bank, go awry.
The nation’s debt stock, currently at $83 billion, comes with a huge debt service provision in excess of N2.1 trillion in 2019, but set to rise in 2020. This challenge stems from the country’s revenue crisis, which has remained unabating in the last five years, while the borrowings have persisted, an indication that the economy has been primed for recurring tough outcomes, the report concluded.
The situation says something else.
Another news report within the same time frame indicated that the federal government made a total of N3.25 trillion in 2020, out of which it spent N2.34 trillion on debt servicing within the year. The report underlined that 72 per cent of the government’s revenue was spent on debt servicing. It also puts the government’s debt servicing to revenue ratio at 72 per cent.
It was in the news that PricewaterhouseCoopers, a global professional services network of firms operating as partnerships under the PwC brand, in a report entitled; ‘Nigeria Economic Alert: Assessing the 2021 FGN Budget’, warned that the increasing cost of servicing the debt would continue to weigh on the federal government’s revenue profile.
It said, “Actual debt servicing cost in 2020 stood at N3.27 trillion and represented about 10 per cent over the budgeted amount of N2.95 trillion. This puts the debt-to-revenue ratio at approximately 83 per cent, nearly double the 46 per cent that was budgeted.
This implies that about N83 out of every N100, the federal government earned was used to settle interest payments for outstanding domestic and foreign debts within the reference period. In 2021, the FG planned to spend N3.32 trillion to service its outstanding debt. This is slightly higher than the N2.95 trillion budgeted in 2020.”
Today, such fears raised cannot be described as unfounded, just as this author doesn’t need to be an economist to know that as a nation, we have become a high-risk borrower.
Looking at the above facts, this piece holds the opinion that the present debt profile presently crushing the country may not have occurred by accident.
And, even as the nation goes on a borrowing spree and speeds on the ‘borrowing lane’, and at a time the World Bank indicates that “almost half of the poor people in Sub-Saharan Africa live in just five countries: and they are in this order, namely; Nigeria, the Democratic Republic of Congo, Tanzania, Ethiopia and Madagascar, the situation becomes more painful when one remembers that no one, not even the federal government can truly explain the objective of these loans and whether they were utilized in the masses best interest.
It would have been understandable if these loans were taken to build a standard rail system in the country that would assist the poor village farmers in Benue/Kano and other remote villages situated in the landlocked parts of the country, moving their produce to the food disadvantaged cities in the south in ways that will help the poor farmers earn more money, contribute to lower food prices in Lagos and other cities through the impact on the operation of the market, increase the welfare of household both in Kano, Benue, Lagos and others while improving food security in the country, reduce stress/pressure daily mounted on Nigerian roads by articulated/haulage vehicles and drastically reduce road accidents on our major highways.
Again, it would have been pardonable if the loan were deployed to revitalise the nation’s electricity sector, to re-introduce a sustainable power roadmap that will erase the epileptic power challenge in the country and restore the health and vitality of the nation’s socioeconomic life while improving small and medium scale business in the country.
What about the nation’s refineries?
This piece recalls now with nostalgia that one of the popular demands during the fuel subsidy removal protest in January 2012, under President Goodluck Ebele Jonathan’s administration, was that the federal government should take measures to strengthen corporate governance in the Nigerian National Petroleum Company (NNPC) Limited, as well as in the oil and gas sector as a whole. This is because of the belief that weak structures made it possible for endemic corruption in the management of both the downstream and upstream sectors of the oil and gas industry.
The present administration as part of its campaign promise in 2015, agreed to ensure a better deal for Nigerians, but eight years after such demand was made and Jonathan gone, the three government-owned refineries in the country have not been able to function at full capacity as promised by the present administration.
Today, if there is anything that Nigerians wish that the FG should accomplish quickly, it is getting the refineries to function optimally as well as make the NNPC more accountable to the people. What happened under President Jonathan has become child’s play when compared with the present happenings in Nigeria’s oil/gas and electricity sectors.
What the above tells us as a country is that more work needs to be done, and more reforms need to be made; that as a nation, we are poor not because of our geographical location or due to the absence of mineral/natural resources but because our leaders fail to take decisions that engineer prosperity. And we cannot solve our socio-economic challenges with the same thinking we used when we created it.
Definitely, this piece may not unfold the answers to these challenges completely, but there are a few sectors that the incoming administration must start from.
The first that comes to mind is the urgent need for diversification of the nation’s revenue sources. Revenue diversification, from what development experts are saying, will provide options for the nation to reduce financial risks and increase national economic stability, as a decline in a particular revenue source might be offset by an increase in other revenue sources.
Finally, within this period of economic vulnerability, a new awareness that must not be allowed to go with political winds is the expert warning that accumulated debt can hinder a country’s development, especially when most of the revenue generated is used to service debt.
Jerome-Mario is the programme coordinator (Media and Public Policy) for Social and Economic Justice Advocacy (SEJA). He can be reached via [email protected]/08032725374
In Nigeria’s diverse workforce, the conversation around diversity and inclusion (DEI) extends beyond gender to address tribal diversity, socioeconomic representation, and other cultural nuances. Policies that promote inclusivity are crucial for fostering collaboration in Nigeria’s multicultural corporate environment.
“An organisation is only as good as its people. Ensuring those people perform to their best is the role of human capital. Today, the field has a range of tools to ensure real-time engagement and agile interventions for optimal job satisfaction and performance”, – Catia Teixeira, MultiChoice Africa Holdings Group Executive Head of Human Capital.
In both our professional and personal lives, we all strive for growth and development. These opportunities are deeply rewarding, supporting the kind of self-actualisation that makes life most fulfilling. In the Nigerian workplace, where career growth often intertwines with societal expectations and the drive for self-improvement, human capital plays an even more significant role. Opportunities to grow are not just fulfilling but are deeply rooted in our collective ambition for a better future.
Employee engagement is a reflection of how actualised individuals feel in their roles. Engaged employees are more likely to perform at their peak and contribute positively to the workplace. In Nigeria, where the “hustle culture” is celebrated, organizations must create environments that not only nurture growth but also recognize and reward the efforts of their people.
When employees feel enriched and their work aligns with their aspirations, the results are transformative. Growth and development are not just personal milestones—they are the foundation of a thriving organization and, by extension, a more productive society.
Identifying Growth Opportunities
In every workplace, some employees stand out from the first day, while others take time to grow into their potential. Talent management processes must cater to both. For instance, a twice-yearly organizational talent review can help Nigerian companies identify where employees excel and where they need support.
Interactions within the workplace also play a crucial role. In Nigeria’s highly networked professional landscape, creating opportunities for cross-departmental collaboration can open new doors for employees. Systematic development plans, supported by tailored training, ensure that these opportunities translate into tangible growth.
Take the MultiChoice Academy, for example, which offers over 4,000 online courses spanning finance, HR, marketing, and other fields. This mirrors the Nigerian appetite for continuous learning, especially as industries rapidly embrace digital transformation. While face-to-face training remains valuable, customized e-learning platforms are pivotal in bridging knowledge gaps and preparing employees for the future of work.
For any training program, balance is key. Organizations must align employee development with business goals while ensuring individuals feel empowered to pursue their aspirations. In Nigeria, induction programs that connect new hires with company visions and purpose are critical to building this alignment.
One of the most rewarding aspects of human capital management is witnessing success stories unfold. In a country like Nigeria, where talent is abundant, but opportunities may be unevenly distributed, developing talent internally can make a significant impact. Long-term employees bring invaluable institutional knowledge, and nurturing their growth ensures they continue to drive organizational success.
At MultiChoice, we are deeply committed to equipping our workforce with the skills and confidence needed to excel. Whether it’s training young leaders, empowering women in leadership, or developing heads of departments, every investment in our people enhances their value – as individuals and as indispensable assets to the company.
What Diversity Means
At MultiChoice, gender equity remains a key focus. Women make up 46% of our workforce, and 46% of leadership roles are held by women—a significant achievement in a society where women often juggle professional aspirations with traditional family roles. Our promotions policy is designed to push these numbers to 50%, ensuring equity across all levels of the organization.
When entering new markets, MultiChoice intentionally applies its culture of inclusion, empowering women to excel in leadership positions. This commitment extends to addressing barriers unique to Nigeria, such as access to resources and mentorship for women in underrepresented fields.
Data Drives Change
To drive meaningful change, data is indispensable. Nigerian companies often face challenges like high employee turnover and workplace inefficiencies. By leveraging data, organizations can address these issues strategically.
MultiChoice uses platforms like Office Vibe to generate insights into employee engagement, satisfaction, and work-life balance. Weekly surveys and random polls provide actionable feedback, enabling quick interventions and fostering a culture of continuous improvement.
In Nigeria, where trust in leadership significantly influences workplace morale, data can also help bridge gaps between management and employees. Regular focus groups, coupled with robust analytics, ensure employees feel heard and supported. When organizations align employee needs with business goals, the result is a workforce driven by purpose and achievement.
The Collective Goal
In Nigeria, where community and collective growth are deeply valued, human capital strategies should emphasize the power of shared purpose. By investing in people, organizations contribute to a larger vision of national development.
At MultiChoice, every success story is a testament to this philosophy. From training young leaders to empowering women in leadership, the organization demonstrates that growth is a journey best undertaken together. For Nigeria, this represents a powerful blueprint for building a future where individuals and organizations thrive in harmony.
Abba Dukawa
Although I’ve never met Governor Bala Muhammad in person, only seeing him on television, his recent outburst against the federal government’s economic policies resonates deeply with poor citizens’ view.
His concerns stem from empathy for the citizens’ going through unbearable hardships, which have worsened due to the economic situation where millions of citizens struggling with high cost of living, poverty and hardship, reflecting the reality on the ground where citizens face significant economic challenges.
His view resonated with the people in respect of political affiliations have praised Governor Bala for speaking truth to power, acknowledging that the economic policies aren’t working. But his outburst of the economic policies has sparked a heated response from presidency.
Even though President Bola Tinubu claims to have no regrets about his economic policies, aiming to strengthen the country’s economy, policies must be empathetic.
The Tax Reform Bills, in particular, have generated widespread concern, with experts warning of negative implications and advising the government to postpone the bill and engage in further consultations.
The National Economic Council, comprising 36 state governors and led by the Vice President, had expressed reservations about the bill, emphasizing the need for adequate consultation with stakeholders.
However, the Presidency swiftly rejected the NEC’s advice, stressing that the bill is crucial for supporting President Tinubu’s administration in bolstering the country’s fiscal institutions.
Governor Bala Muhammad’s expressed his concerns when hosting Sheikh Yahaya Jangir, a frontline campaigner for the Muslim-Muslim presidency, at the Bauchi Government House.
The governor urged President Tinubu to listen to Nigerians and correct his errors, stating that it’s his duty as a leader to tell the truth.
As Governor Mohammed noted, “I am sure you have heard that we are quarrelling with the president. Yes, it is true we are quarrelling because our people are suffering, and the president has refused to listen to us.”
His comments should not be seen as a critique of the president’s policies, not a personal attack. It’s essential for President Tinubu’s administration to understand the growing concern among Nigerians about the country’s economic direction and the need for effective strategies to address the current economic hardship.
The Presidency, through his Special Adviser, Sunday Dare, responded by urging Governor Mohammed to prioritize the welfare of Bauchi citizens instead of engaging in political posturing. Dare emphasized that the President’s administration is focused on national development and collaboration with state leaders.
It’s worth noting that Governor Mohammed has implemented various poverty alleviation programs, including the Kaura Economic Empowerment Programme (KEEP), to reduce the state’s high poverty rate. He has also prioritized education, with a focus on reducing the number of out-of-school children in the state.
Additionally, Governor Mohammed has taken steps to improve the state’s healthcare system, His administration’s efforts to address these challenges echo the experiences of poor citizens in Bauchi State and across Nigeria.
Overall, Governor Mohammed’s commitment to addressing the pressing issues faced by his state and its citizens resonates deeply with the experiences of poor Nigerians..
Dukawa write it from Abuja can be reached at [email protected]
By Tony Ogunlowo
‘Titanic’ can mean something that is very big, gigantic or enormous and it was also the name of a ship that sank on its maiden voyage.
When the Titanic sank in 1912 it sank due to a number of avoidable factors: a ship deemed unsinkable that wasn’t fitted with watertight compartments, a ‘unprofessional’ seasoned captain who was apparently bullied into going at full speed through known ice-berg strewn waters, lack of common binoculars for the deck watch and the unavailability of enough life boats for all the passengers.
This all put together, as they say, was a recipe for disaster. Red flags were ignored.
Translating this to President Tinubu’s modern-day Nigeria, the avoidable factors that can sink the country are way too obvious.
Nigerians have long enjoyed the benefits of fuel subsidy. Costly as it is to maintain it’s enabled the economy to keep running by keeping the cost of things low. It’s removal, as can be seen, has created a domino effect, as the experts predicted, resulting in the prices of even the basic commodities skyrocketing as everyone passes on the additional costs.
With inflation currently at 32.7% and still rising, things are only going to keep on getting more and more expensive. As a result, the new minimum wage of N70,000 will have less purchasing power than the previous 2021 minimum wage of N30,000. If fuel subsidy removal was meant to boost the economy it has done the opposite and will stagnate any efforts to kickstart it.
The governments inability to control corruption or severely punish corrupt officials which is robbing the country’s coffers of billions and billions of Naira every year is a stumbling block for development.
If a corrupt government official who built 750 houses with stolen funds or an ex-governor accused of misappropriating N80 billion are allowed to walk around freely, supposedly on bail, without fear of eventual conviction it questions the message the government is sending out to future looters: if the culprits were in Russia or China the outcome will be totally different.
Even though an austerity economic policy may seem harsh like it was designed to rob Peter to pay Paul, it should be short, sharp hardship with green pastures in the foreseeable future – not ever! A good start will be to cut down on the number of foreign loans being obtained every year as their repayment can take a huge chunk out of the country’s annual income.
The new tax laws are long overdue and it should include that VAT earned in a state stays in that state: so, if your state doesn’t generate any VAT (- such as from the sale of alcohol products) you don’t get to share in what other states have collected.
Insecurity in the country is not something that started yesterday. Previous governments have blood on their hands for not nipping these insurrections in the bud before they grew to become monstrosities. You don’t pat yourself on the back, like the Nigerian Army likes to do believing you have the threat ‘under control’ – you eliminate the threat completely using what ever means necessary.
Unless the order (given by ‘Somebody’) is not to destroy them completely and to quote the late Sani Abacha,”…any insurgency that lasts more than 24 hours, a government official has a hand in it..”, no wonder Boko Haram continues to flourish and bandits like Turji Bello continue to taut the government. When the armed robber Lawrence Anini did something similar in 1986 he was fished out within months, tried and executed.
As I’ve written before the Nigerian Police Force is long past its sell by date and considering the ever growing population of Nigeria with its associated acts of anti-social behaviour its time to seriously consider devolving the NPF into state-run outfits. The growing popularity of state-run security outfits, such as Amotekun, proves this is feasible and effective.
Considering the fact the country is going through severe economic hardship the President, himself, should curb frivolous spending where possible: no more new Presidential yachts or planes ( – that includes the new one for the VP), a cap on ridiculous-no-real-job SA and SSA appointments and most important of all a cap on ALL politicians salaries and perks (which is to say if politicians are patriotic enough they’ll agree to a pay cut, forgo some of their benefits and pay for their own jaunts abroad).
Implementing the Steve Oronsaye Report which recommends merging and closing of ministries etc that has been passed over by every President since President Goodluck commissioned it in 2011 will cut government operating costs even further. This should not just be at Presidential level but extended to all the states: this will not just streamline the bloated and largely inefficient civil service but will also weed out ghost workers and white elephant project.
The ‘japa’ movement which the government is trying to discourage should be allowed to continue. It’s morally wrong for a government that can’t provide suitable employment for its citizens to try and prevent them from seeking opportunities abroad : ‘japa’ is not just limited to Nigerians, it’s a worldwide phenomenon.
People, British, American, Filipinos, are migrating worldwide to where ever there are opportunities for them to prosper. That’s the way the world works now: nobody is going to stay in a ‘sh*t-hole’ country if there are no opportunities for them to grow. Scr3w patriotism! It’s every man for himself! So, if a country can’t provide adequate employment opportunities people will pack their bags and ‘japa’! And if you restrict them from leaving the country what are they going to do? Get up to mischief – 419, cultism, kidnapping!
These same people send money back to their home countries all the time: Nigerians in diaspora in 2023 alone sent home more than $19.5 Billion Dollars. This is a huge injection of foreign currency for a country that desperately needs it.
So, just like the Titanic the warning signs are there and the inevitable that will happen should they be ignored. The question is which way is President Tinubu going to go. This is what I call the ‘Titanic Wahala’, ignore the obvious and the proverbial will hit the fan, sooner or later.
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