In my wide memo to the then President-elect published on March 2023, by both print and online mediums titled The task before the incoming Administration. I have reminded Mr president of the need to have a team of competent people and immediately roll out his economic blueprint.
As Nigeria is neck-deep in debt hovering around N44.06 trillion in September 2022 and the debt stock could amount to about N77 trillion by June 2023. This trend indicates Nigeria may spend almost 100 percent of its revenue on debt servicing by 2026. While the nation’s economy is in serious shambles and needs emergency rescue.
That article drew the attention of Mr. President on the need to put all necessary policies to bar federal and state governments from left and right sought borrowing and in the case where the borrowing became necessary, the said borrowing would be used to fund projects that can generate revenue out of which the debt can be repaid.
Weeks ago, the administration stopped the fuel subsidy regime, and the removal was done without considering the consequences to the teaming poor population. Before the removal of the fuel subsidy already Nigerians are languishing in extreme poverty; battling daily survival has become an uphill challenge due to the unprecedented skyrocketing prices of essential commodities.
Against the backdrop of what people are going through in the country, over 100 million Nigerians are in abject poverty as the cost of leaving reached the highest apogee since the late 80s because the Naira lost value daily.
It is imperative that the President takes into account the plight of the citizens and work towards restoring their faith in the government. Why the administration shouldn’t use an $800 million loan for social infrastructure that has a direct bearing on citizens. Need for President Tinubu’s administration to use the subsidy savings to fix the county health sector, education, transport, energy sector, and other critical infrastructural development deficit across the country.
How can the administration palliative can be different from immediate administration trader money, Social Security Programme, N-Power Programme, and School Feeding Programme where trillions of Naira were allegedly misappropriated by the former administration officials?
It seems the N8000 monthly palliative to 12 million Nigerians is not an answer to what the people are going through in the country, in the backdrop of the cost of leaving reaching the highest apogee since the late 80s because the Naira lost value daily.
A larger portion of Nigeria’s population is suffering in silence as a result of the frightening inflation rate occasioned by the removal of the fuel subsidy. Some people eat once a day while others eat twice a day, skipping lunch.
Thus, President Tinubu must acknowledge the grave consequences of the current economic situation and the suffering experienced by Nigerians.
As the leader of the nation, he has the power to reverse the economic downturn and alleviate the suffering of Nigerians. No need to remind the president of Section 14 Subsection 2(b) of the 1999 Constitution as amended which states that the security and welfare of the people is the primary purpose of government.
Judging from comments in the public space think that the program is another elite scheme that does not address the needs of the truly poor. Buhari’s poverty alleviation scheme made no meaningful dent in poverty because it failed.
It also failed because of a lack of sincerity during the implementation by the officials. This N8000 version is likely to suffer the same fate unless it goes mainly on sincerity and cooperation.
The palliative, which will be funded through a loan, will add to the country’s debt burden, and Nigeria already has a high debt profile and does not need to incur more debt to distribute palliatives.
The nation’s debt-service-to-revenue ratio is reported as 80.7%, according to the information contained in the 2023 budget by the Minister of Finance. The report reveals a total debt service of N5. 2 trillion in the first 11 months of 2022 out of a total revenue of N6. 49 trillion.
Nigeria may spend almost 100 percent of its revenue on debt servicing by 2026. The trend remains disproportionate, the International Monetary Fund (IMF).
Without any self-centered viewpoint considering the nation’s current fiscal situation, there must be stringent measures to address these depletions and deficits. Nigeria’s external debt is about 40% of its projected N77 trillion debt stock, most of which is to multilateral creditors like the World Bank at 47% and more worrisome to Commercial lenders (private creditors) at 39%, with debt service to revenue ratio projected by the World Bank to increase from 100.2 percent in 2022 to 123.4 percent of federal revenue in 2023 and possibly hit 160 percent in five years except broad-based reforms are implemented to “unfreeze” the financial landscape.
Let President Bola Tinubu discard the sharing N8,000 to 12 million Nigerians, and rather use the money to provide “palliative transportation” for the masses, and provide medication in the country mare consultation hospital. Use the money save from fuel subsidy removal to purchase buses for commuters at the state and local government levels, to ease the cost of transportation which has skyrocketed.
There should need for the administration to use the subsidy savings to fix the energy sector, as 27% of the country’s average household depends on fuel-related expenses, rather than putting it into a wasteful exercise.
Dukawa writes in from Abuja can be reached at [email protected]
