Still On Federal Government’s Borrowing For Palliatives And Matters Arising -By Gozie Irogboli

When Tinubu made his infamous Emi-lo-kan statement preparatory to the February 2023 Presidential election, his supporters attributed that to mean readiness for governance but almost two months after taking power albeit temporary as the president of the country, Tinubu has exhibited an unprecedented high level of unpreparedness for governance. On the day he was sworn in, on 29^th of May, 2023, he announced flagrantly, that the subsidy on petroleum product is gone, without any contingency plan to cushion the concomitant effects, much to the chagrin of the Nigerian public. And his cronies and media hirelings hailed that as a very bold decision. And almost two months after, following the hubbub that attended that unsavory decision, he came up with the bizarre idea of borrowing a whooping sum of $800million from the World Bank to distribute to some alleged faceless poor families as palliatives thereby attracting scathing criticisms from concerned Nigerians who have given varied interpretations to the motives behind such a profligate venture.

And since Thursday, 13^th July 2023, when the National Assembly (NASS) hastily approved the request by President Bola Ahmed Tinubu to borrow the humongous sum of $800million from World Bank which will be distributed as follows: the NASS which is about 469 people, which had earlier received the sum of N24billion as housing allowance will receive the sum of N70billion as hardship allowance, the principal officers of the NASS will receive another sum of N40billion to purchase bullet proof vehicles, the judiciary will receive N35billion while about 12 million poor families are scheduled to receive N8,000 each monthly for six months as palliative for oil subsidy removal, the policy has elicited indignant reactions from Nigerians many of whom see the proposed policy as move by Tinubu to settle his cronies to recoup electoral spending and to compensate those who allegedly worked with him to grab, snatch and run away with our electoral mandate.

Ordinarily, there wouldn’t have been any need to dwell on this hideous policy again given that the government has decided to review it having realized the futility of the exercise but because it sounds inconceivable that such a policy could emanate in this era where the emphasis worldwide is on prudent resource management and given the backdrop of the fact that the country is reeling precariously on a heavy and suffocating debt burden that is currently put at $77 billion which is over 40% of the country’s GDP. It is equally inconceivable to think the measly sum of N8000 which is about N266 ($3) per day is what the government considered appropriate to sustain the average Nigerian family. In reality, what problem can N8000 solve for any household in the present day Nigeria that is experiencing run-away inflation?

Certainly, this ranks as one of the worst futile adventure any government can embark on and I wonder whose mind this kind of hideous policy is conjured. The policy whether as a temporary or permanent measure, is clearly ill-conceived and therefore ineffectual. To borrow a humongous sum of $800million and fritter it away as freebie is preposterous, wasteful, fraudulent and profligate. Borrowing should be purposeful and project-tied not for frivolities. The people that design this plan probably are mistaking public funds to personal funds or party funds to be shared to compensate party faithful. If Asiwaju Tinubu wants to settle those that worked for him during the flawed presidential election, he is at liberty to do that with his own resources; not at the expense of the nation. It is an abuse of office to do so and therefore unacceptable.

The question on the lips of every Nigerian if we are to implement the policy is: what will be the criteria to select the proposed 12million poor household when there is no comprehensive data management system to indicate the poorest among the 133 million that are said to be multi-dimensionally poor in Nigeria? According to the recent World Bank Report about four million Nigerians have joined this group with an estimated 7.1 million to join before the end of the year if the right measures are not adopted to address the situation. And how come only 12 million will benefit from the proposed palliatives? There is high unemployment, rising cost of living, heavy dependency burden and insecurity… Thus, giving out cash handouts in the name of palliative is an unproductive investment. How can the government go on borrowing spree in the face of the suffocating national debt burden for frivolities? And if the government hands out the paltry sum as proposed to the selected poor families for six months, what happens after that? Again, how will the paltry sums be disbursed given that the said poor group, do not operate any bank account? How can it stimulate economic activity and improve living standard as claimed? How does the small business owners whose businesses are adversely affected by the subsidy removal benefit from the planned palliative and survive?

Evidently, this policy is an exhibition of laxity and laziness in policy engineering, poor conception skills and crass inability to do the right situation analysis. What Nigerian masses need is empowerment not handout. In our current situation, distribution of handouts either as a temporary or permanent measure is not an option. Nigerians need enabling environment and enhanced capacity for wealth creation not freebies. The policy is an affront on our sensibilities as a nation. Nigeria does not need a wasteful, spendthrift government. We need prudence, probity and accountability. Designing public policies requires conceptual skills, understanding of the needs of the people, stakeholders’ engagement, knowledge of available resources, situation and scenario analysis, sincerity of purpose inter alia.

There are options the government can choose to cushion the effect of the petroleum subsidy removal. Among others, the government can approve, grant or guarantee soft loans or interest-free loans for small business owners that are adversely affected by the subsidy removal. The government can subsidize agricultural production by providing security and other incentives to the farmers to reduce cost, food prices and ensure food security. Again, our moribund refineries can be refurbished and then concession or leased out to refine petroleum product at home. This apart from making refined products available and at a cheaper price, will create jobs and have other linkage effects. Also, the government can increase salaries of workers and reduce taxes on consumer products now that the subsidy is removed and revenue supposedly freed up for other activities. Given the current value of the Naira, there is no reason the national minimum wage should less than N200000 (less than $400) monthly. And there is no reason to tax anyone whose income is less than N200000 in the present day Nigeria. Furthermore, the government can invest in the public transport system directly or through the Public Private Partnership (PPP) to reduce the cost of transport, increase mobility and economic activities…

Regrettably, it seems that Tinubu has made good his promise during the campaign to continue with the obnoxious policies of Buhari regime otherwise how could he have gone on a borrowing spree just for frivolities? Indeed, it is worrisome that a government that should be cautious about accumulating more public debt because of the country’s debilitating debt profile is pushing the country deeper into the debt trap. The Buhari regime implemented the worst bogus and ineffectual programs like the ill-conceived School feeding program that produced 20 million out of school children, the scandalous Social Intervention fraud program and the renovation of the NASS complex with the whooping sum of N38billion.

Clearly, with this kind of observed profligacy, Nigeria is heading nowhere under Tinubu. Almost two months, but we have not seen anything that suggests that Tinubu can move the country to the desired destination. Clearly, there is no vision. And as the Scripture says, “when there is no vision the people perish…” (Prov. 29:28).

Gozie Irogboli

An economist, a novelist and a public policy analyst

(goziei@yahoo.com)