23 April 2019

Nigeria: Aduwo - Rising Debts Should Be Concern to States, Govt

interview

The President/Chief Executive Officer of Centre for Convention on Democratic on Democratic Integrity, Mr. Olufemi Aduwo, in this interview speaks on the need to sustain industrial growth in Ogun State. Jonathan Eze presents the excerpts:

You have always been concerned about the debt situation in states and the federal governments and I am also aware your organisation raised an issue concerning debt crisis in the last World Bank/IMF meetings in Washington. What was it about?

Many years ago, I wrote an article about debt forgiveness and I said the issue of debt forgiveness might not be the end of the matter and as you can see, my words are justified. It was published by THISDAY then and culled by many magazines across the world and I said even though our debts have been forgiven, where we are currently, we are already in a bad debt situation again and what we are now asking them is for government to let us know what we are borrowing for in the first place. The era of borrowing money from the World Bank and sharing it among themselves should be a thing of the past. The stakeholders must be involved to know why these monies must be borrowed.

For example, almost all the 36 states are indebted with nothing to show for it in terms of projects and infrastructure. It is not a crime to take loan locally or internationally, but what do you do with the loan? I can tell you today that from our records as a monitoring group, Ogun State is leading in terms of infrastructure. The incumbent governor embarked on massive projects that have made living easier for the people, the bridges, the roads constructed and most important is the conducive business environment and that is why companies relocated to the state and are still relocating. And I want to make this very clear, the incoming governor of Ogun State must sustain the current growth and development in the state.

Considering the high cost of debt service in the country, what can civil society do to monitor all these expenditure?

Three years ago, we told the World Bank that it is right time for civil society and stakeholders to be involved on how loans are being given and what we spend it on. The era of our leaders going to borrow money with nothing to show for it should be a thing of the past and with a population of about 200 million we cannot say our debts are too much because Dubai with population of about 3.7 million is owing about $139 billion, but the difference is what do we borrow for. Dubai borrows for investment and they still want to borrow more, but we borrow for consumption. I am also warning that this Chinese loans we are borrowing is another way into slavery. For instance, the Chinese are planning to take over the Zambia airport. And this idea of 60-40 Chinese arrangement is dangerous, for example if we borrow to build a road, it can be tolled so that in the next five years, it would have recouped the loan borrowed.

I think the government should look inwards and engage the private sector more in its engagements. The Governor of Lagos State, Akinwumi Ambode said he has not borrowed in four years, but he has been servicing debts, even the World Bank are now raising alarms that Nigeria lacks the capacity to service the loans and not to talk of repaying. If you cannot service your loan, the Paris Club and others will bring in IMF to come in with conditions and this where it is very punitive to people. That is because if the IMF brings in their condition, they would say so many things will have to change. Everybody wants to borrow from the World Bank and its interest rate is 0.5 or 1 per cent which is less than 5 per cent as against Nigerian banks with double digit interest, so everybody wants to borrow from the World Bank. During Tinubu's government, he got money from World Bank to provide water in Lagos, but where is the water? When we were growing up in Lagos, you would see water flowing everywhere across the streets of Lagos, but where are they today. These are the issues we should be questioning and that is why the civil society must engage the World Bank, IMF and the government to ask what we are borrowing for, so these are the issues and we should get involved.

Most of the debts are not commensurate to the infrastructure on ground virtually in many states. What can be done to ensure transparency?

When you see some of these high debt profile states, majority of them are the ones that gets more money, for example look at Lagos State generating close to N34 billion every month, but when you look at Lagos State, it has about 81 slums, go to Ijora Badiya, Oko Oba and some other areas in Lagos and see slums, you will see people living below animal standards. But despite the huge revenue generation by the state, you will not see the impact on Lagos residents. But for Ogun State, I make bold to say the incoming Governor will be commissioning projects in the state, because of the massive infrastructural projects the outgoing governor embarked upon. The United Nations last year, recognised Ogun State as one of the few states that established the Ministry of Forestry. When you talk about SDGs, most of its goals are around climate control, change and effects. So if you have a Ministry of Forestry, it takes charge of deforestation, mitigation against climate change. Remember, when the President of France came to Nigeria, he signed an agreement with the state, private sector and the federal government to plant trees in Aworo. Aworo is one of the forest reserve in Ogun State.

You need peace and security for all these to thrive and you can see over the years, some of the things the governor is doing in the state revolves around the objectives of SDGs and without peace and security, there is no way you can attract investments and today you will see the number of people coming into the state is increasing. Some of these governors have tried, but because of the concentration and how this money is being raised and you can imagine if Ogun State government is getting all the tax that those companies in the state generates, it could have been generating more money than Lagos. This is a serious issue because we may not have the opportunity of debt forgiveness again, because they know we borrow for consumption. There is no nation in the world that borrows for consumption and get out of that mess and in Nigeria, we do not know what we are borrowing for. Some states are borrowing to pay salaries and when you do this, it is a serious issue of concern.

How can Ogun State ensure it economy is viable?

What we have on ground must be sustained and you know government is a continuum. If you take government property as your property regardless of what the previous government had mismanaged resources to sustain it, yours is to be prudent and then make sure we get to the promise land. Look at Apapa Badagry road, when Fashola started the road, the whole world told him the road belongs to the federal government and also a road that leads into the ECOWAS country, today that road has been destroyed and the state is yet to get constructional powers to fix that road. We need to have a mechanism in place where people cannot just start and abandon projects.

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