$500million Bond: Corrupt Move To Bankrupt Nigeria!

by L.Chinedu Arizona-Ogwu

President Umaru Yar’Adua yesterday wrote the Senate for approval to raise 500 million US Dollars in the international capital market. The move underscores earlier prediction that the Federal Government is in for a long borrowing spree. Emerging Yar’Adua Tactic is to blame Obasanjo for all economic woes. Blame everything on Olusegun Obasanjo. That’s the long pass President Yar’Adua and his PDP are throwing as the clock ticks toward their second year with a sagging economy and increase in cost of living.

The $500 million rhetoric headlined the Yar’Adua government’s public relations offensive on the economy. Many PDP sympathizers and media mongrels, seeking favour from the current government, always make a pathetic attempt to implicate Obasanjo in the current state of affairs, suggesting corruption, lax oversight and a permissive attitude during the previous administration. What they all refuse to mention is that, the Obasanjo years, saw the largest economic expansion of the post-Independent period pertaining foreign loan.

While Yar’Adua’s team blames Obasanjo for the economic mess, Nigerians are taking credit for Obasanjo’s successes in terms of foreign loan. If Rawlings is to blame for economic shortcomings, then he should also give him credit where it’s due.

Obasanjo and his political team were not the only reason for our current predicament. All previous governments – both military & civilian – have had a hand in our current demise. The rot in Nigerian society started Azikiwe regime and perpetuated under Ahmadu Bello and Obasanjo. By the late 1970s, I had given up on Nigeria, because Nigeria became a kind of George Orwell’s Animal farm where we were being sold all kinds of falsehood as nonentities continued to misrule Nigeria.

Most of us (including yours truly) “swallowed” the foreign loans excuse: Obasanjo left no money in the coffers, so we had no choice but to declare Nigeria a Highly Indebted Poor Country.

It all sounded genuine until an independent and opened mind Nigerian takes a careful look at the record of the current administration. Here are a few questions that demand full and complete answers from the president. If, as Yar’Adua’s administration claim, our coffers are empty, much emptier than when Obasanjo took over 8 years of democratic rule, then; Where from the billions of naira for the renovation of ministers and friends of PDP’s houses? .Where from the $3.4 million spent on overseas trips by the president and ministers in 2003 alone? .We have 72 minister and deputies, numerous special assistances and uncountable commissions to take care off. We will soon have 17 Supreme Court justices also – making a complete mockery of the justice system. How are we going to pay for all of this? In fact, why should USA, a highly litigious country of 250 million have only nine Supreme Court justices, while Nigeria needs 17; Who pays? .Why did the government guarantee $20,000 loans for law-makers, sign a $90,000 car for speaker of House of Reps; $300,000 on bulletproof cars for the president; New Cars for 72 ministers and their deputies while asking the good people of Nigeria to tighten their belts.

Blaming your predecessor is hardly novel. Presidents all over the world often claim credit for the good times and try to shift responsibility for the hard times. The US is a very good example. Ronald Reagan blamed Carter for the weak economy of 1980, when interest rates topped 15 percent and inflation approached 13 percent. Carter leveled similar criticism four years earlier. Clinton made the economy the top issue in his 1992 defeat of the first President Bush. Once in office, he accused his predecessor’s budget office of cooking the books to hide the magnitude of the federal deficit. The current Bush White House has blamed Clinton for other problems, too. Some officials have even suggested the two-term Democrat’s efforts to prod an Israeli-Palestinian peace settlement helped fuel the recent Middle-east violence. Nigeria is not USA. The USA can afford the blame game, but can we?

As stated in the September 2006 Obasanjo government received a loan on terms are for 40 years, including a grace period of ten years, and a service charge of 0.75 percent per year. The loan approval came shortly after the creation in February of an NGN 50 billion (USD 426 million) fund for existing microfinance institutions (MFIs)—reporting by Micro Capital—and the Central Bank of Nigeria’s (CBN) licensing of 107 new MFIs in January as reported by THISDAY, and online service covering Africa since 1997. Established in 1958, the CBN is responsible for the administration and control of the Nigerian financial sector and monetary policies. The CBN reported total assets in November 2007 of NGN 7.18 billion, or USD 62 million. According to an IFAD press release covering the September 2006 Executive Board meeting in Rome, the total for the RFIBP is to be USD 40 million including a Nigerian government contribution of USD 6.2 million, USD 4.8 million from various participating organizations, USD 985,100 from beneficiaries, and a USD 500,000 grant from the co-financier Ford Foundation. The AllAfrica.com article does not clarify whether all of these components were approved as well. With 2007 total assets of USD 13.7 billion, the Federal Ministry for Agriculture and Rural Development implemented the RFIBP. The stated goal of the programme was meant to reach 345,000 households, specifically targeting woman-headed households, “families that are food insecure and living below the poverty line,” and “families that are food secure in good rainfall years but have a low income.” The RFIBP was meant to take place in the following 12 Nigerian states: Adamawa, Akwa Ibom, Anambra, Bauchi, Benue, Edo, Imo, Katsina, Lagos, Nassarawa, Oyo and Zamfara.At the end, these left were left untouched and Nigerians were still left grumpy.

Along with education, natural resources have a significant role in per capita income and the poverty level of Nigeria. Most Nigerians rely on a rural economy, which relies on the efficiency of the land. Unfortunately, for many farmers, only 31% of the land can be cultivated. The soil fertility is poor, overused and eroded. The trees, which alleviate erosion, have been cut down and used to for fuel, lumber, tools and medicines. With the inability to prevent erosion, and the unfertile soil, farming in Nigeria is difficult and unreliable.

The uselessness of land in Nigeria has shed light to the issue of desertification, which is a major problem in Nigeria. Many farmers have been unable to control grazing and the migration of livestock, which has put tremendous pressure on the land in some areas. Because the majority of land is unproductive, Nigeria has been relying on petroleum and natural gas for most of its export earnings. Throughout Nigeria, there is an abundance of low grade iron ore, lignite (brown coal) and sub bituminous coal (lower grade than bituminous, but higher than lignite). The high demand for petroleum and natural gas has lead to oil spills, burn off of natural gas, and clearance of vegetation, which have all seriously damaged the vegetation, land, and waterways of the Niger Delta.

The instability and corruption of government has not allowed Nigeria to create a state supported social welfare system. The majority of Nigerians rely on their extended families during difficult financial situations and in old age. Medical care is given to government affiliates and to most workers in large corporations and commercial projects. Despite the numerous attempts to change, the majority of treatment centers and hospitals are located in large cities. These treatment centers are understaffed, under-equipped and have inefficient medications and medical supplies. Patients are expected to pay for supplies and medications, which in most cases are unaffordable.

The lack of state supported social welfare has led to an infant mortality rate of 71 per 1,000 live birth and a life expectancy of 51 years (Encarta 2004). The leading cause of death is Malaria, and is likely to remain so because of the increasing resistance both of the malarial parasite to the drug as well as of the mosquito, which transmits malaria to insecticides. Other preventable diseases that doctors have been unable to control are: measles, whopping cough, polio, cerebrospinal meningitis, gastroenteritis, diarrhea, tuberculosis, bronchitis, waterborne infectious diseases, and sexually transmitted diseases. Unfortunately, the human immunodeficiency virus (HIV) that causes acquired immunodeficiency syndrome (AIDS) has become more widespread. According to Nigeria’s 2001 statistics, an estimated 3.5 Nigerians have HIV and 170,000 Nigerians died of AIDS.

With the ill- effects of poverty, one would expect that the Federal Government, which is in an era of democracy, would launch a perennial attack on poverty. Ideally leadership should strive to change the attitudes government towards the allocation of resources and champion the idea of public welfare over corruption and mismanagement. President Yar’Adua, has not made a clear cut economic policy for the Nigerian economy and hasn’t prioritized the issue of poverty.

A remedy would be to create a system of government with check and balances system that is comparable to the United States. The leader of government—president or governor—shouldn’t be able to use arbitrary power, and should consult with other “branches” before he or she takes action. With the separation of powers amongst branches, no group of people or person will be able to abuse the governmental power. I commend the groups that have been creating plans to alleviate Nigeria’s poverty situation, but no program will work if it doesn’t first and foremost address the chronic corruption rooted within the leaders. It is unfortunate corruption gives leaders the ability to the access public treasury without accountability .A successful poverty elimination strategy would require an emphasis on economic growth, equality, with an increased accessed to public infrastructure and social services. The emphasis on the general population would increase the HDI, Human Development Index, in the country. The HDI measures the standard of living, literacy and life expectancy.

All of this is easily overshadowed by Nigeria’s suppressing poverty situation. It is imperative to observe that it takes efficient government actions and committed programs to eradicate this situation. Throughout history one can observe that no nation has developed when the populations’ purchasing power is disrupted, and when the government consistently lacks accountability in policy execution. Many scholars have found it difficult to understand how Nigeria, a country that contains numerous natural resources, can have such a high percentage of poverty. Nigeria would be better served if President Yar’Adua and his administration stop wasting time blaming the past and got on with delivering their election promise.

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Sigrid January 4, 2009 - 12:22 am

The biggest problems in your country are the top officials are all corrupt and the sufferer are the poor.

Being a humanitarian supposed to be the President as the father of the country will responsible to control the bad activities, such as fraud and corruptions. The most priority the financial it should be control and the most of it is the health of the people will look after it and the third is the education, transport, roads, before the other things.

Create jobs for the people to pay tax in return and free education to all to help the country growth. Dont invest money from other countries coz you need it there in your country to use on economy reserve.

Stephen Klaber December 7, 2008 - 6:55 pm

Rarely does pumping in money help a problem Each dollar added competes with every other dollar and the net effect is inflation, people are just as poor but have more money. The poverty is deepened for those who were bypassed and returns for those who were not.

A real and powerful attack against poverty in your nation is the effort to clear your wetlands of the Typha weed, which is sucking Africa dry. The labor to do this is being expended, but the available profit in biomass is not being collected, so the efforts will eventually collapse financially. You must convert the Typha problem into a resource. It can be done- it is a great ethanol feedstock. Typha is choking you, it could be enriching you.


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