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Budget 2016, Is Debt The Answer? – By Ephraim Elombah

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The greatest problem with borrowing and going into debt comes when repaying the money. By then, money had been spent on projects that do not re-generate the money.

BORROW money today. Enjoy the things the money can buy tomorrow. Suffer hunger, uncertainty and the loss of everything the days to follow including anything the person had before the borrowing. Is that the wise course?

Years ago, around the 1980s, Nigeria’s annual budget was around 29 billion Naira. During those days, the Naira was about equal to the dollar in value. Nigeria owed about 27 billion Naira and so the debt was about 27 billion dollars.

No one knew how to come out of the problem. Nigeria is country plagued by ethnic diversity with each ethnic people aspiring to be the political leader. Unfortunately, the political leader is not unbiased. He is driven by a desire for his self-comfort. These tendencies ultimately lead to the development and creation of infra-structures in the region from which the leader emanates in expense of other regions.

A silent war ensues. While people from the same ethnic region as the political leader, the president, are praising him for what he is doing for them, people in other regions are always picking fault at him. Nigerian people are insatiable. There is neither the financial ability nor the morals to meet the demands of the teeming population.

Humans are naturally handicapped in not knowing what tomorrow will bring. An action taken today may be the bane of tomorrow. This leads to experiment to find out the working path. Social experimentation can be destructive or lead to wastages. During the reign of General Ibrahim Babangida (rtd), retrenchment of workers was experimented with. The civil service was made less attractive by reducing amounts paid to civil servants. Government parastatals were sold to the public to ease the government of financial burdens and subsidies to petroleum fuels removed some of these tendencies were reversed under General Olufemi Obasanjo’s (rtd) rule. He once again established the civil service making it attractive.

The General Abdulsalam Abubakar-Olufemi Obasanjo’s rule saw Nigeria in good light among federation of nations. Nigeria’s creditors released debt burdens and year trade surplus was even recorded, according to available records. This does not mean that Nigeria was entirely problem free. There were still the problems of unemployment and youths’ restiveness among others. But problems should be tackled one after another until a good number of them are actually solved. If all the problems are tackled at the same time, with the back-drop of irregularity in financial capabilities and the moral aspects of it, failure is likely to ensue.

It should be noted especially that Nigeria is made up of a number of ethnic groups. All these groups should be made to feel that they belong to the whole of national entity. The quest to lead should not result in a tussle or jostling for power. If this results, peace and order will not be maintained. The president is obliged to make every Nigerian feel that he belongs. No ethnic group should be deprived of what is given to another no matter whether the president or governor is from that region or not. Even if an ethnic group is smaller in population, in comparison with another, it should not lose all. It should be given a corresponding share of what belongs to all.

There are also the problems associated with being corrupt, partial and prejudiced. These result in prosecution of some criminals while others are released because they belong to some prominent people.

All these problems lead to lack of peace and insatiation. Insatiation in turn leads people to lack contentment and feel they are suffering because they lack the means to satisfy their needs. Hence they complain of lack of jobs and social amenities because they are not contented with the ones available to them.

Indeed, no matter any amount that is borrowed people in any society will still have needs or wants that are not met.

Consider what any money on hand leads to – whether borrowed or not – increased spending. This spending, most of the time is not done after much needed fore-thought. Also, much money can be spent on a material that will spoil not long after and need repair or replacement, most of the time when there is little fund for it. Consider the nation’s refineries and the Ajaokuta steel industry. Similarly, the money can be spent on projects that the people have been doing without while remaining happy.

But the greatest problem with borrowing and going into debt comes when repaying the money. By then, money had been spent on projects that do not re-generate the money so that repayment can be effected. This leads to thoughts about further borrowing to finance debt. And the cycle continues.

With the debt release recorded under Abdulsalami-Obasanjo era, it will be good to dwell on thoughts about making the country debt-free. Under this condition the country will be able to lend to some countries or come to financial aid of others. With its position in Africa and the West African sub-region, a financially and economically stable Nigeria will be a blessing.

With the present war of the Federal Government against corruption, a consolidation of Nigeria’s economic status will not come from borrowed money that will likely fall into the hands of corrupt individuals. If this happens, no benefit will result. It can only at best result in further efforts to recover lost or stolen fund.

Let Nigeria live in peace within her means. Available resources should be deemed enough to meet pressing needs of Nigerians.

From Ephraim Elombah


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