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Thursday, July 18, 2024

Trumpet With Certain Sound

Debt and Decadence

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By Chudi Okoye

You wouldn’t think, to observe the profligate habits of Nigeria’s ruling elites, that the nation is now caught in an unyielding debt trap. The recent update on Nigeria’s public debt provided by the Debt Management Office (DMO) shows yet again, as previous updates did, that the country now has a totally unsustainable debt profile. But if our governing elites are perturbed by the dismal debt profile, there’s not the slightest intimation of it in their disposition.

On the other hand, if we the immiserated Nigerian masses, are disgusted with the profligacy and decadence of our ruling class in the face of a rising debt burden, we have yet to make this known. We might want to borrow a leaf from Kenya where a popular protest seems to have forced the withdrawal of an unpopular tax bill.

What stood out to me in reviewing the DMO’s debt profile update, released on June 20th, was not just the magnitude of our public debt, but also the widening gap in the dollar-naira ratio.

To see how far the naira has depreciated, let’s compare the dollar and naira equivalents of our outstanding debt in the past 12 years, as depicted in my chart above. The changes over the past two years are particularly striking.

As of March 2022, our total debt, as compiled by the DMO, was $100.1 billion, or N41.6 trillion.

By March 2023, our debt had risen to $108.3 billion, or N49.9 trillion.

As indicated by the latest figures, our total debt as of March 2024 stood at $91.4 billion, or N121.7 trillion.

If my math is correct, our debt rose 8.2% YoY in dollar terms between March 2022 and March 2023; or 19.9% denominated in naira.

On the other hand, the latest figures would suggest that our debt dropped 15.6% YoY in dollar terms from March 2023 to March 2024; but in naira denomination it shot up 143.9%!

Such are the travails of the naira.

But let’s not get too comfortable thinking that our total debt stock is trending down dollar-wise. The latest figure probably doesn’t include the $20 billion (~N30 trillion) Ways and Means “loan” illegally borrowed from the Central Bank and recklessly spent by the Buhari administration, facilitated by Godwin Emefiele. Senate president, Godswill Akpabio (that annoying fellow who desecrates an office once held by Dr Nnamdi Azikiwe and Dennis Osadebey), promised months ago to probe that transaction. But we can be sure nothing will come of the probe. After all, Akpabio is in charge!

If we compound that Ways and Means “loan” into the debt stock, and also add in the proposed budget deficit for 2024, we can assume a significant increase in the debt profile (about half of Tinubu’s 2024 N28.8 trillion budget, as revised in December, is based on deficit financing). But the deficit ratio will likely increase because the revised budget was based on $1/N800, a spectacular failure of budget forecasting given the current exchange rate.

With our GDP now revised down to $252.7 billion by the IMF (placing Nigeria 4th in Africa) and our total debt stock pushing to $120 billion (if we add the Ways and Means component and the proposed budget deficit), we would be well over the 40% debt-to-GDP limit stipulated by the 2007 Fiscal Responsibility Act.

So, in a very obvious sense, our government is breaking the law by exceeding the borrowing limit.

Provocations
Our politicians are totally out of control, borrowing recklessly, in part to fund their white elephant projects and their avaricious tastes. Part of the unsustainable borrowing goes to fund recurrent expenditure, including the massive emoluments our governing elites appropriate for themselves, which are among the highest in the world. Our president travels in unspeakable splendor, with a motorcade that would be an embarrassment in civilized climes. We’ve just spent, in these lean times, the unbelievable sum of N21 billion to renovate the vice-president’s residence, a figure about 18.5% of the entire budget of Ekiti State in 2023 – to take just one example. There’s talk that a new jet might be purchased to add to the Presidential Air Fleet, based on a National Assembly recommendation, ostensibly because our president and his vice encountered minor travel inconveniences on their recent foreign trips, arising from poor maintenance of existing planes.

And, consider this: despite the huge public outcry and the senselessness of it, our government is proceeding with plans for the trans-zonal Lagos-Calabar coastal highway, a project currently estimated to cost N15 trillion – representing nearly 4% of Nigeria’s recently revised GDP. This is a project secretly awarded, without competitive bidding, to someone said to be the president’s friend and business partner.

The outrages and provocations piled on Nigerians by the governing elites are unspeakable. But what are ‘we the people’ doing about it? Clearly, our leaders are beyond redemption. Similar to out-of-touch ruling classes in pre-revolutionary societies at other times and places in history, our rulers don’t seem to care what the masses think. They don’t seem the least perturbed by the mass suffering in the land.

So what do we do? Can we the Nigerian people rise up to protest the insidious misgovernance of our country? With the Nigerian military seemingly a spent and discredited force, the prospect of a corrective military intervention would appear remote. So, it’s up to us, the people, as we’ve just seen in Kenya with the assertion of people’s power to upend an oppessive tax legislation.

Right of Revolution
The ‘right of revolution’ (or right of rebellion) has been recognized through much of human history as a form of redress, justified by law where a governing class acts – without legitimate cause – against the common interest of the people, or in ways that undermine the health of the polity. This doctrine includes the right of resistance to tyranny, and in some cases it affirms the justifiability of tyrannicide.

The principle goes as far back as ancient China and Rome, as well as medieval Europe, and is well established in modern political philosophy. It is recognized as a principle of natural law, upheld by several political philosophers, including social contract theorists John Locke and Jean-Jacques Rousseau, and others like the philosopher J. S. Mill and the literary critic Dr. Samuel Johnson.

Because of the intellectual justification these thinkers provide, the right to popular resistance against an injurious ruling class has been enshrined as a tenet of positive law in some constitutional jurisdictions – including several states in the United States of America, as well as several countries in Europe, Asia and Latin America.

The right of revolution is not perforce enshrined in the Nigerian constitution. However, the principle is inferred in the UN Universal Declaration of Human Rights which, though aspirational and non-binding, is a constitutive document of the UN reflecting the UN Charter, which itself is binding on all member states, including Nigeria. The third paragraph of the Declaration reads as follows:

Whereas it is essential, if man is not to be compelled to have recourse, as a last resort, to rebellion against tyranny and oppression, that human rights should be protected by rule of law.

Notwithstanding the clear intent of international law and morality, in Nigeria we suffer the villainy of our ruling elites and endure social conditions far more oppressive than what triggered revolutions elsewhere at other times in history.

We Nigerians have proved ourselves incapable of rising up against our vile and oppressive rulers, held back, in my opinion, by the following factors, among others:

▪️Persistence of tribal and ethnic sensibility, which prevents the development of class consciousness and revolutionary instinct

▪️Hopelessness and the pathology of “learned helplessness” which induce political lethargy

▪️Fear of reprisals from the security state, preventing the emergence of true revolutionary leadership

▪️A traditional culture that fetishizes status and obedience, leading to undue reverence for those in authority

▪️Stockholm Syndrome and economic dependence on our oppressors

▪️Imported religions (both Christianity and Islam) that promote temporal endurance and the notion of otherworldly rewards

▪️Acculturation to the norm of non-violence, instilled in us by some of our early political leaders such as Dr Azikiwe, which upholds the virtue of gradualist – rather than radical – change.

So, given all the above, we end up in what I’d call a revolutionary stupor, roiled and agitated, embroiled in conditions that should trigger a revolutionary upheaval, but never sufficiently kindled as to rise up against our decadent and totally incompetent rulers.

It is a deeply depressing situation.

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