LEKAN SOTE FROM PUNCH
In an op-ed article on January 1, 1964, social activist and proprietor of Mayflower School in Ikenne, Ogun State, Dr Tai Solarin, wrote a New Year message to whomever it may concern to be prepared for existential realities.
His words: “I therefore repeat, may you have a hard time this year, may there be plenty of troubles for you this year,” which he justified as follows: “Our successes are conditioned by the amount of risk we are ready to take.”
Bola Tinubu, who said he asked to be President, while also insisting that fuel subsidy must go, Nigerians and foreign stakeholders should be prepared for the rough ride that Nigeria should have taken a long time ago.
While the President should find a way to return to prosperity, the 133 million citizens that are afflicted with multidimensional poverty, Nigerians too must be ready for the economic upheaval that will accompany the removal of fuel subsidy. The austerity measures that must come are going to be severe.
It is not reasonable that Nigeria spent close to N4.39tn or nearly $10bn on fuel subsidy in the 2022 financial year, as claimed by former Minister of Finance, Budget and National Planning, Zainab Ahmed.
Last week, Group Managing Director of the Nigerian National Petroleum Company Limited, Dr Mele Kyari, subtly reminded President Tinubu that the Federal Government still owes N2.8tn fuel subsidy that NNPCL defrayed on behalf of the government.
It is time to live up to the reality of a regime of austerity measures. When President Tinubu declared, “Fuel subsidy is gone,” as an ad lib to his inaugural speech, he spoke of the reality that he and everyone must confront.
And that reality dawned the morning after his speech. The fuel lines are the first symptoms of the series of challenges that Nigerians must endure and overcome before it gets better again. Sanusi Lamido Sanusi, ex-governor of the Central Bank of Nigeria, who later became Emir Mohammed Sanusi II, had warned that continued fuel subsidy policy would eventually lead to a huge debt burden.
The World Bank revealed that Nigeria spent 96.3 per cent of its revenue in 2022 on debt servicing, yet about half of its 2023 budget is going to be borrowed, if the lenders will oblige. In March 2023, China, which is getting loan-weary, turned down Nigeria’s request for about $22.8m loan application.
Those, like former minister Ahmed, who kept arguing that debt-to-Gross Domestic Product ratio is more preferable than debt-to-revenue ratio to assess Nigeria’s capability to service and pay off its debts, should be held responsible for former President Muhammadu Buhari’s unconscionable debt binge.
At her valedictory ceremony, Ahmed still insisted that “despite (obvious) revenue challenges, the government consistently met its debt service commitments, while post-financing assessments showed adequate capacity to repay loans.”
But when she admitted that, “We are struggling with being able to service debts… even though revenue is increasing, (while) expenditure has been increasing at a much higher rate (and) so it is a difficult situation,” you wonder what economic and financial parameters guided her thinking.
But you must also recognise that Nigeria is not exactly a poor country. The problem is the failure of its governments to find a way to enhance its revenue generation and block the obvious leakages.
Now everyone is going to ante up in paying up a debt they knew not how and why it was incurred. The explanations that the loans were acquired to pay for infrastructure and palliatives to vulnerable Nigerians is a laughable Trojan horse that pays for gluttonous big government.
