"I’m the king of debt. I’m great with debt. Nobody knows debt better than me. I’ve made a fortune by using debt, and if things don’t work out I renegotiate the debt. I mean, that’s a smart thing, not a stupid thing.” That statement sounded like what any of our government persons of today would say if asked why Nigeria appears swimming in inexplicable debt. But it is a statement from the United States president, Donald Trump, in one of the several media interviews he had ahead of the 2016 election. Nigeria’s profligate leaders would love this Trump quote to justify their ramping up the debt stock of the nation. But they won’t bother to know or admit that Trump was a man who, by 1992, because of “a decade of profligate borrowing, lacked the cash to make his loan payments.” Forbes recalled that “although he owned hotels, skyscrapers, casinos and an airline, his debts exceeded the value of his properties by hundreds of millions of dollars.” That is the man in charge of the affairs of the world as we have it today. And his fiscal behaviour appears to have made him the role model of the managers of Nigeria. A man the “suicide bomber” of North Korea, Kim Jong Un, last week described as a dotard – making Americans to rush to their dictionary.
Dotard is an unusual word for an unusual person. It refers to someone in “a state or period of senile decay marked by a decline of mental poise and alertness.” Does that aptly describe President Trump who is ever conscious of his smartness and disdain for stupid politicians? Someone whose smart fiscal ways are the ways of our governors here.
Dotards. It appears we have them in Nigeria. And it is not a matter of age. Some governors’ rotten apple has made bad our basket of fruits. Their value sense has become gangrene in the sore of the states. The biggest news in Nigeria in the last one week is that our country’s total foreign and domestic debt stocks now stand at about $15.1 billion and N14.1 trillion. Under the watch of the current guards of the nation, there has been a steady, continuous increase in the debt burden from $10.718 billion in 2015, to $11.406 billion in 2016 and to $15.047 billion in 2017. The Federal Government’s share of the current total is $11.106 billion (74 per cent). The balance of $3.94billion (26 per cent) goes to the 36 states of the federation and the Federal Capital Territory. So much borrowed and much more to borrow! If normal revenue refuses to come in again, take loans and spend! It is free money.
If debt is that sweet, why did we pay back the previous debts in 2005? The ordinary man would ask: What did my governor use these fresh loans for? Where are the assets acquired with the liabilities? Or were the debts just heaped on us to increase the wealth of the elite in power?
Plutarch, the historian, warned long ago: “If you are poor, do not borrow. You will not be able to repay the loan and you may end up deeper in debt.” I know our economists would say that counsel from Plutarch was illiterate. They would say that a habit of borrowing is not a bad behaviour. They would say it is sound financial engineering. They would cite the almighty United States as the world’s greatest debtor. They would tell us that one of the founding fathers of America, Alexander Hamilton had a similar view. That Hamilton’s view was that the United States should “look at debt not as a problem, but as an asset,” They would say that incurring insufferable debts by federal and state governments has been with the US from the beginning. They would say that in 1789, the United States was in a debt crisis. That “between foreign, domestic and state debts, the United States owed almost $80 million,” and that like Nigeria of today, the American states could not pay.
They won’t say the debts were investments in the future of the American state and were verifiable, productive loans that were not secretly taken. They won’t say that Hamilton did not just treat the debts as figures but he submitted a remedial proposal to fund the debts – he taxed elite luxuries. In our own case, the persons telling us to accept debt accumulation as proof of their ingenuity have not shown us why the account has become so thickly red in their own tenure. They have not told us what they used the borrowed billions for? They won’t tell us where all the money went and how the loans would be repaid beyond merely passing them on to our grandchildren for them to carry to their own graves.
When a poor state, like a poor man, finances its poverty with uncontrolled debt accumulation, it sinks deeper in mystery. It becomes a total wreck, completely impotent. It suffers what economists call the Micawber’s effect. As it loses the ability to repay, its worth as an entity drops too. No one respects a bankrupt fool. But that is what many of our states have become. And it wasn’t only Plutarch that warned the poor not to borrow to finance hunger. Socrates once warned against taking unproductive credits. One of his rich friends had come to ruins as a result of Greece’s civil disorders of 404-403 BC. The man’s farm was gone; his houses no longer had tenants, yet the crisis had put 14 female relatives under his roof to feed. He wanted money to give them food but Socrates warned him: Taking a loan to feed his family would prolong the agony. He asked him to engage his hungry, idle relations in cloth making. Paul Millet writes that “using borrowed money, wool was purchased, the women were set to work and the whole scheme turned out to be a roaring success.” That is productive borrowing.
In our own case, what did our poor states borrow money to do? Did we not borrow to finance ornamental projects with no economic values when jobless children of the poor desired work to feed? How did we acquire the debts? What process did we follow? Did you notice that when the National Bureau of Statistics released the figures last week, there were shocks and gasps across the country? Did you not see everyone – city folks and village yokels, literate and the illiterate, scampering to check the state of his state? The fact that we all rushed to check the debt figures should be enough confirmation that the loans were taken in secrecy. The fact that we are asking where the money went could only mean that the loans were spent on voodoo projects to massage the inanities of the powerful. The fact that we are not even sure that between last week and today, the figures have not gone up again could only mean that we are in trouble.
Now, some states are bankrupt because they spent today’s money yesterday. The loan takers have refused to see the debt overhang as a bomb with its fuse in the cold hearth of the poor. They are not paying salaries to the poor and they are not bothered. The states are gasping for life but the governors are on solid ground. They are well fed and do not know that their unpaid workers are hungry. Our politicians are poor students of history.
Throughout history, every debt crisis has bred political tension and upheaval between the hungry and the over fed. This spiralling debt is making it almost impossible now to stop the storm of anger blowing across the country. When All Progressives Congress gave itself the Change slogan at birth, it probably did not know where the hurricane would blow from. It probably thought the change would end with the sack of PDP from power. It appears the gathering storm may deliver poetic justice to the agents of change. And If Nigerians succeed in having their country back, they would forever thank APC for its peculiar style and methods.
The competition for loans between the federal and state governments since APC took over the management of the country can only breed anguish and change. And today, there is anguish. There is hunger. There is anger seething in the bowels of tomorrow. In 2015, the Federal Government had a debt of $7.349 billion and the states $3.369 billion. This grew to $7.84 billion and $3.568 billion respectively in 2016, and in 2017, the Federal Government increased its debt blessings to $3.94 billion and the states $11.106 billion. And these happened under the party we trusted! How much of these borrowings went into financing elite profligacy? We are not likely to get any answer to whatever questions we may ask. And we are not likely to see the debts not increasing as the years increase.
It does not matter which party is in power. They are the same. It does not matter to whom you give power. They will almost certainly use it against you: “Give all the power to the many,” Hamilton declared, “they will oppress the few. Give all the power to the few, they will oppress the many.” They are the same. Their god of greed demands they eat tomorrow’s food today.
