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For profligate, corrupt Nigeria, oil shock may bring the party to a crashing end – Tola Adenle

December 2, 2014

Nigeria

“ … it [debt relief] will be like a second independence … giving us the freedom to focus …something our children will appreciate …” Ngozi Iweala.
On paying off all Nigeria’s old debt during retired General Obasanjo’s presidency.

When Nigeria struck it rich in the very early 70s several years after oil was first discovered in commercial quantity at Oloibiri in the Eastern part of the country, the army General who ruled the country lamented to the consternation of the world about his country having so much money and being faced with the problem of knowing what to do with it! Yakubu “Jack” Gowon’s lamentation would not be for long, anyway, as his government and subsequent army regimes from 1966 to 1979 would embark on a fair number of infrastural projects although some were adjudged “white elephants”.

If truth be told, though, the Army Years – caps deliberate – would later prove economically better for Nigeria than the subsequent years of locust under “democracy”. Lagos, the old capital and still the commercial capital of the country, is a case in point. While the face of the city has seen quite substantial transformation in recent years, Lagos Island is linked to the rest of the country through bridges all constructed during the military era.

In the last fifteen years since the beginning of another era of civil rule, Nigeria has had the good luck – pardon me, not the one at Abuja – of massive economic windfalls that should have not only enabled her depart from the group of impoverished nations always begging for handouts (grants and aids) and prowling for loans, but opportunities that should have catapulted her to the level of the Asian Tigers. Her states are ruled by governors – “executive governors” most of whom have learnt to constitute themselves into one-man dictatorships.

The unfortunate first Iraqi war andThe Revenge of the Son a.k.a. 2nd Iraqi War – aided by Bush2’s errand man, Blair the liar who lied about the presence of weapons of mass destruction and thousands died – washed billions of dollars into Nigeria’s treasury as oil prices surged.

If later-minted Warwick University Ph.D. Jack Gowon’s earlier naive understanding – to be generous to “gentleman Jack” – that Nigeria of the 1970s had too much money than sense, the “democrats” since the late 1990s surely have not shown any such deficiency or decency. Welcome to Nigeria’s brave new world in which a federal “lawmaker” might have arrived the capital city in a night bus from his village to be sworn in – honestly; read it in the papers back then – but would, with a salary and perks in millions of dollars that are the highest in the world, own anything in the world that money can buy.

It’s been the same story at every level of governance: governors own jets – the country supposedly is home to one of the world’s highest numbers of private jets; local council heads own expensive homes in Nigeria and abroad; Nigerian kids in private UK schools – public schools – must be the highest of any foreign country while the educational system has become so bad that Nobel Laureate Soyinka, once suggested all universities be shut down for a number of years for a proper restructuring. And offshore banks are groaning from the weight of ill-gotten wealth that would make their countries richer. There are houses purchased in Europe, especially and America whose owners died without their families being aware of such properties.

And things were not supposed to be like this.

When retired General Obasanjo returned as civilian head of state, it was 1979, and despite his being rigged in through machinations of the perennial power of the Mostly Muslim North (designed and executed by the Brits before “independence”), he had a lot of goodwill because Nigerians were sick and tired of army rule. We all wanted him to succeed, and he seemed to have hit the ground running.

Corruption-fighting agencies – often with overlapping responsibilities – were put in place but the actual problem started with the retired general who though garbed not in fatigues, chose to behave in authoritarian manner. The crime-fighting agencies were used to fight Obasanjo’s “enemies” while others, within and without the ruling party he headed , honed the act of looting while the crime-fighting agencies were allowed to look elsewhere.

Governors, especially of oil-rich States in the Delta looted billions under Obasanjo, among whom is Ibori, whom a Nigerian court had found not guilty but who is in the Big House in the UK for money laundering. Even as the petrodollars rolled in for these mostly low-population oil-producing states, their people have remained the poorest and their states among the least-developed in the country.

It is not that different in other states.

The worst of Nigeria’s problems may be the free-for-ALL that loans have become more even as the purse of the government has grown in the last two decades or so.

As Finance Minister under Obasanjo, Ngozi Iweala encouraged and ensured Nigeria paid off all her debts:

“ … it [debt relief] will be like a second independence … giving us the freedom to focus …something our children will appreciate …” Ngozi Iweala on Nigeria’s exit from debtor status in 2006.

All Nigerians were relieved and held hopes of a stronger currency whose low value against major world currencies had never been justified considering the country’s only export, oil, has always been indexed in dollars; yet, when the dollar is up, the Naira would be down, and if the dollar ever slightly moves down, the Naira would spiral down.

Dr. Iweala was not just an onlooker as the Road to Ruin of the economy was mapped by the central government where she held the unheard-of post of “Director of the Economy” as well as minister of finance,posts that should have given her room to ensure oil proceeds were judiciously used but she seemed to have had her eyes set on it as a goal as she seemed to have started her campaign to return as finance minister after she was no longer in Obasanjo’s government. At a S. African forum, she said on a TV report that left me incredulous about Nigeria: “but she still need loans …”!

Most state governors have been on borrowing sprees that have led just about every state saddled with heavy local and foreign debt burdens that will be around for generations yet unborn. The saddest part of the situation is that the scattered road projects that are embarked upon in the last two years with these borrowings would not add up to the massive amounts borrowed if audited by external bodies outside the states. The rest? As I wrote in a weekly essay about a decade ago on where the money meant for development of infrastructure in Osun State when the state took off went as there was not much except borrowings to show for it when the civilians got in by 1979: “… the money did not cross Asejire Dam”. Asejire Dam on river of same name, is the state line between Oyo and Osun States.

Meanwhile, the borrowing continues, and one only has to check Nigerian newspapers often to see how desperate the country has become. It gets grants, including as little as under a million dollars even as ministers who loot millions of dollars get, at worst, a sack. Just today, there’s an announcement of a World Bank loan of 80 million dollars for power to Edo State but buried in the story is the huge extent of the loan: a 212 million dollar private sector borrowing thru The Bank’s Intl. Finance Corp. Power improvement for Edo State? Possible, but if the Nigerian way of such is considered, may be: not really.

Why is The Bank in the corners of the Nigerias of the profligate world? How/why did, and was it enthusiastic about Nigeria liquidating the old loans, both verifiable and questionable? As a commentator wrote on my old blog: “The World Bank’s reason for lending to Nigeria is its knowledge that funds will be squandered”:

“The truth is that Okonjo-Iweala is an agent of the World Bank just doing her master’s bidding …as a matter of fact, that is the reason for lending out the funds in the first instance. When the funds are squandered, we turn around to ask for more … the cycle goes on … they now get hold of our ‘balls’ and start to dictate all sorts of unpalatable terms and conditions for our economy. They will post their men to the CBN [Central Bank of Nigeria] and other sensitive govt agencies to superintend our economy …” Tokunbo Ajasin in emotanafricana.com, April 4, 2013.

As I’ve mentioned times without number on the old blog, The Bank IS A COMMISSIONED AGENT, and in its alumna – The Honorable Ngozi Okonjo Iweala, Ph.D. (Harvard), former Managing Director of The World Bank …” – on the ground to preach what she apparently does not believe, Nigeria and her star-crossed, long-suffering masses are not only being ill-served but are “done for” – to borrow a cliche from the distant past – in the vice-grip of donor agencies, their countries and the willing Nigerian “patriots” who [mis]lead their country.

Unfortunately, a lot of the local debts at state level are arrears of salaries to government workers, and with definite drop in allocation to states with oil reaching under $70/barrel, those who would bear the brunt the most would come from the ranks of lower-level civil servants as the “oga patapata” in each area, and while not all civil servants are thieves, most of those close to the top hierarchy have built-in ways to supplement their incomes, especially when salaries stop being paid: kickbacks, outright stealing of government funds, et cetera.

REFERENCED COMMENTS:

https://emotanafricana.com/2013/04/04/the-world-banks-reason-for-lending-to-nigeria-is-its-knowledge-that-funds-will-be-squandered-a-readers-reaction/

https://emotanafricana.com/2014/02/23/okonjo-iweala-overstayed-her-welcome-and-now-its-too-late-to-resign-from-corruption-drenched-nigerian-government-tola-adenle/

http://www.bloomberg.com/news/2014-11-30/oil-at-40-possible-as-market-transforms-caracas-to-iran.html

TUESDAY, DECEMBER 2, 2014. 2:50 p.m. [GMT]

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5 Comments on “For profligate, corrupt Nigeria, oil shock may bring the party to a crashing end – Tola Adenle”

  1. folakemiodoaje Says:

    Oh well, our oil may as well dried up tomorrow, Nigeria can not be any worse than it is, and if it did we will survive.

    The reality is oil may still be there for another century but it will loose value gradually. More oil being found all over the place, even in our neighbouring country, Ghana. Also less dependance on oil is being encouraged and alternative to petrol is being explored.

    Like

    Reply

    • emotanglobal Says:

      Dear Folakemi,

      Thanks, as always for this contribution.

      Yes, how very true! And what a shame that the majority did not benefit from such great wealth thrown our way by providence. Most in our shoes utilised their earnings to broaden their revenues thru tourism, economic development and other major areas that would continue to yield revenues even long after oil would be gone.

      How about the blown opportunity that Nigeria would have had to become a shining example to people of African descent everywhere: the Haitis, et cetera. And to think that a lot of the looted funds from Nigeria and other African countries will be lost forever as many of such people keep foreign accounts to which their families are not signatories, and no way apparently Are Western countries going to release most. Abacha’s billions, in all fairness though, were supposedly released by the Swiss when we last heard although the modalities of release so that the looted funds do not get stolen a second time!

      Can U believe Nigeria wanted to borrow to fight Boko Haram?

      You have my rgds,
      TOLA.

      Liked by 1 person

      Reply

      • folakemiodoaje Says:

        Borrowing to fight Boko Haram? That sounds pretty much like what Nigeria government would do.

        Well, being ‘example’ to other African descent around the world is already a lost cause. Now, many state in Nigeria desperately trudging Cuba learning from them everything i.e education, policing even Yoruba Orisa!

        Like

  2. ADENLE S.A. Says:

    The children of the Bride Chamber cannot Fast when the Bridegroom is still with them! The oil thing will still be there for another 100 years.!!!
    If only we can bring in Order,then the bride groom will come early enough and there will still be plenty.

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    Reply

    • emotanglobal Says:

      Dear Mr. Adenle,

      Thanks for this.

      Of course oil may still be there for another hundred years or more but the important point is in your second sentence: “if only we can bring in order…” Can we/will we? We need to give honest answers to the two short questions.

      My regards,
      TOLA.

      Like

      Reply

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