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Abracadabra accounting: Nigeria settles N51 billion London Club loan but none can tell who took it? – Tola Adenle

It seems just like yesterday when Nigeria was being showcased as the poster child of being debt-free.  Under  retired General Obasanjo’s administration and Dr. Okonjo-Iweala’s headship of the Finance Ministry, we were told the best way was to live debt-free and we were made to oblige.   Before other African countries could say, “congratulations, big brother, now you can start mending your other ways and lead by example”, new ones started piling up again.

Here are excerpts from THE NATION of today, June 16:  “Federation Account: N51b deducted to pay London Club debt”.  Nigerians have not recovered from the shock of how a 41-year old could pilfer what Alhaji Saburi D. Bankole, former Speaker allegedly stole, including $1 U.S. BILLION when this whammy was slammed on our heads as the newspaper story claims  no one really can tell who took the loans or what they were spent on!

Here are important points from the story:

“The sum of N51.27 billion was deducted from the Federation Account in February, 2011 as loan for the refund of London Club debt buy back to states.” It however, failed to name the states.  The Sub-committee expressed “concern that the terms and conditions for the payment of the loan were not specified”.  The Accountant General of the Federation and the Federal Ministry of Finance have been instructed to investigate the borrower and terms of refund to the Federal Account.  The sub-committee’s chairman also discovered: “In the course of its analysis, there was an outstanding amount of $140,198,605.42 being the cumulative unreconciled Royalty Oil lifting sales value as at April, 2011.”

As for the never-ending loans, here are some facts stated in the paper: 

“Following the payment of $4.5 billion balance of the deal reached with the Paris Club in October 2005, Nigeria had exited from the debt owed the multilateral agency. Of the $36 billion Nigeria’s external debt, $30 billion was owed the Paris Club of creditor countries.  The debt owed to the London Club creditors comprises par bonds, promissory notes and an outstanding units of oil warrants.”

On November 21 last year [2010] in an essay titled “Ngozi Okonjo-Iweala, the Doctor; NgoziOkonjoIweala Polls, Nigeria’s burgeoning loans, etcetera”, below is the part that wonders aloud about Nigeria’s growing debt profile:

Loans piling up AGAIN!

In 2006, Dr. Okonjo-Iweala (DOI) was Finance Minister when $30 billion was repaid with consultancy fees reportedly costing Nigeria up to $100,000 a day.  In 2007 or thereabout, DOI – or somebody resembling her on tv – justified Nigeria’s need for fresh loans; technicalities, I naturally did not understand.

This year alone, here are a few of how we’ve climbed back into loan bondage:  “Federal Government seeks additional $80 million World Bank loan for the mining sector …” Apparently, an existing World Bank project on mining “has purchased over 70 vehicles which it fuels and even pays the drivers … how the vehicles will be fuelled if there is no additional assistance from the World Bank …” ( Linus Adie of a World Bank Project). Institute of Mining and Geosciences students will undertake courses in Ghana from the project funds! Note the civil service mindset of uses for foreign loans by a major oil producer: fueling vehicles and paying drivers who run mostly private errands when not sleeping.

“Nigeria is highly under-borrowed”, Experts.  “The nation’s debt is sustainable,” Abraham Nwankwo, DG, Debt Management Office/// The Bank “pledged its assistance to Nigeria’s Commercial Agriculture Development Project (CADP) to help her become one of the world’s food exporters again.”  That “assistance” was $150million loan to five states.  At that CADP parley, Musa Shanono, Kano state commissioner for agriculture …, claimed that Kano had “invested over N20 billion in the sector between 2003 and 2009”, that is, more than US$120 million, folks!  The groundnut pyramids must already be soaring!

The “country sold N694 billion ($4.6 billion) in bonds” last year.   Recently, “four firms selected as financial and legal advisers for Nigeria’s $500 million Eurobond scheduled to open before year end.”  Nwankwo assures Nigerians that “despite the downgrade by Fitch Rating, Nigeria will successfully raise the amount from the international bond market due to the confidence level of potential investors … And that Nigeria’s debt to GDP ratio is about 16 percent … internationally acceptable level is 40 percent of GDP.  A bond is a loan, dear readers, and there is investor “confidence” because if we default, our creditors can pump crude; won’t be the first time. Bring on the US1 cent to N100-era.  Let the masses go feed from remnants at parties.

There are recent news reports that DOI has “called on the Federal Government to stop accumulating domestic debt which has reached $26 billion in 2010” – must include Osun’s recent $120 million. She warns that this must be checked “to enhance access to credit facilities in the international market … ” Since DOI saw Nigeria out of the foreign debt bondage not too long ago, she should be able to caution against continued accumulation of foreign loans a lot of which cannot be discerned in Nigeria’s development and quite sizeable portions of which are wasted (see fueling & drivers above). DOI was in the system and understands the mindset.  The amounts being reported as stolen daily are more than the loans Nigeria takes; she should NOT need to borrow $20 million for HIV/AIDS; $20million for PHCN; $8million for National Urban Water Sector Reform Project or $12 million for “capacity building” in 14 states.  These are from the nearly $5 billion IDA loan projects that almost led to a row in the House in October.  [The World Bank’s IDA supposedly lends to the poorest of the poor.]

Hypocritical though it may be, even Col. Mark has condemned “the rampant, public private partnerships and internal and external borrowing by all levels of government” although the Senate he leads is partnering with Alhaji Bankole-led House to dismantle what’s left of Nigeria’s democratic pretensions by pursuing legislators’ selfish and roguish ambitions of getting a constitutional amendment that would make them “automatic members” of the National Executive Committees of their parties.

[Sources for both:  Nation, 234Next,  Tribune, Sahara Reporters and NOI-Polls website].

JUST IN:  “NIGERIA spent N960bn ($6.4bn) on debt servicing between 2008 and 2009” Annual National Debt Sustainability Analysis 2010”, Punch, Nov. 19, 2010”.

Now, it seems the chickens of greed, etcetera are finally coming home to roost when over $300 million U.S. is settled in loans by the central government, loans whose borrowers are not known and purposes for which loans are not discernible.  One thing I’m sure should not be difficult to unearth is have the paying arm of government tell Nigeria which states “took” these loans.

Can Nigeria shake off the moniker of “a crime syndicate masquerading as a nation” if it continues along this path?

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4 Comments on “Abracadabra accounting: Nigeria settles N51 billion London Club loan but none can tell who took it? – Tola Adenle”

  1. Ajipeya Afunleyin Says:

    Ko si ohun titun l’abe orun mo. When you feel Nigerians have shown their worst, then all of a sudden something will happen that will jolt you and you will realize that the Nigerian designer of the most unthought of evil ways are still in the country’s fraud factory, which has qualified to be the first of its kind in the Guiness Book?

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  2. TOLA ADENLE Says:

    Thanks, Tai. Let’s hope most in the media see this problem as you do. I watch all those seeking change in the Middle East and Greece and wonder what stuff these people are made of; the determination in the face of relentless establishment crackdown, especially in the Middle East is unbelievable. Here, people have let their real pain go away while the superficial pains of now are being nursed: who knows the new people to know for contracts, etcetera. What will happen to those yet unborn? By the time Nigeria reach a billion – can’t be too long though not in my lifetime – hundreds of millions will “work” tidying up the premises of the descendants of those now stealing billions.
    If you do not want that life for your descendants, you must reject it – no, not at prayer vigils – in words and actions. This kind of “revolution” is feasible thru what some journalists like Mr. Obe are trying to put together. What I see around does not portend great losses for us; the methods would only force positive actions on the part of those in power most of whom have taken immunity to indescribable depths. TOLA.

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  3. Taiwo Obe Says:

    I think the news media need to start a different kind of revolution: campaigning on stuff like that until something positive happens. Intelligent piece, as usual

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Trackbacks/Pingbacks

  1. Just what Nigeria’s Economy Doctor, Okonjo Iweala recommends: a $550 million World Bank loan to “aid agriculture” | - October 2, 2011

    […] fact, the borrowing spree has seemingly gone beyond rational to manic as can be seen from https://emotanafricana.com/2011/06/16/abracadabra-nigerian-government-accounting/.  For quick reference, here is a para:   Here are excerpts from THE NATION of today, June 16: […]

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