Nigeria heading to another debt overhang – Obasanjo

Former President Olusegun Obasanjo yesterday alerted that Nigeria may be on its way to another crisis of debt overhang if the current fiscal challenge is not creatively addressed.

Obasanjo raised the alarm in Ibadan while speaking at an inauguration conference with the theme: “Getting Government To Work For Development And Democracy In Nigeria: Agenda for Change” organised by the Ibadan School of Government and Public Policy (ISGPP).”
He said: “The drastic fall in the price of oil in the international market has unravelled the weakness of governance in Nigeria. The Minister of Finance has recently announced that the 2016 Budget deficit may be increased from the current N2.2 trillion in the draft document before the National Assembly, to N3 trillion due to decline in the price of crude oil.
“If the current fiscal challenge is not creatively addressed, Nigeria may be on its way to another episode of debt overhang which may not be good for the country.
“It will be recalled that a few years ago, we rescued Nigeria from its creditors with the deal in which the Paris Club of sovereign creditors wrote off USD 18 billion of debt, Africa’s largest debt cancellation.”
Obasanjo, who pointed out that Nigeria then used windfall earnings from oil export to pay off another USD 12 billion in debts and arrears, lamented that the massive scale of poverty and unemployment, the decay in infrastructural facilities, the impoverished living standards of citizens with regard to food, housing, water supply, education and healthcare which have deepened in recent years worsened the situation.
“This is complicated by the protracted experience of violence and brutality, the flow of internally displaced persons arising from the Boko Haram insurgency in large parts of north-eastern Nigeria where many citizens have become distressed, live in fear and insecurity.
“Recent developments in governance show the failure of systems, the disregard for institutional processes and the general decline of institutions that used to function to guarantee reasonable service delivery to citizens.”
He, however, advised Nigeria leaders to be committed to change before the country could witness any meaningful change, adding that the “problem today is that it is doubtful if the current administrative system is imbued with right mix of skills and values to successfully implement a well-articulated programme of change.”
In his keynote address, a former Secretary-General of the Commonwealth; Chief Emeka Anyaoku advocated total restructuring of the system of governance in Nigeria to meet the present challenges.
Anyaoku stressed that the high cost of governance in the country has continued to have negative effects on the system, which in his view, had made many states of the federation financially handicapped.
He noted that many states were owing workers, and many others finding it difficult to pay
salaries even the agreed 18,000 minimum wage.
While asking Nigeria leaders to embrace the type of federalism that worked for countries like Canada, Australia and United States of America (USA) where unity is surely for diversity, he declared that the misplace of priorities where little money is used to finance capital projects while large percentage is used for recurrent is not only condemnable but inimical for the growth and progress of the country