The head-scratching embarrassment in which Senators voted against President Buhari’s request for $29.96 billion foreign loan due to technical issues is another badge of shame that advertises institutional failure and showcases the government’s apathetic approach and lack of seriousness to important governance issues. And that is a pity because all the promises of change were made loudly but the process of achieving it is now being trivialized. No wonder it has been a poor run so far. The needless controversy saw lawmakers reject the president’s request, but not before embarrassing the government and the entire country. This unacceptable anomaly clearly points to a democracy that is not working.
In rejecting the president’s request for approval to take the jumbo loan, the upper legislative chamber explained it was not comfortable with the absence of the breakdown of the borrowing plan. In the letter to the two chambers of the National Assembly last week, Buhari had stated: “I wish to refer to the above subject and to submit the attached draft of the Federal Government 2016-2018 External Borrowing (Rolling) plan for consideration and early approval by the National Assembly to ensure prompt implementation of projects.” But Buhari merely sent the letter and failed to attach the draft borrowing plan, hence the request was rejected because of its anticipatory nature.
The Senate Leader, Ali Ndume, said at a press conference that he intends to correct the anomalies and resubmit the president’s request with a comprehensive borrowing plan to the request as indicated in Buhari’s letter. Ndume however, did not give a specific date or period within which the president was likely to resubmit the request. “I cannot tell you now when it would be represented… As I told you I was shocked by the decision; my colleagues surprised me today. I was not expecting that. If I had a little inclination that such a thing was going to happen, I would have tried to market the request or at worse, I will not present it. Today, the senators had their way and I had my say,” he said.
Ndume should not be shocked. From the shoddy attitude of the President and the cavalier manner in which the senate handled the issue, everything was wrong about the loan request. If the request had gone to committee for review before it was brought to the plenary for consideration, Senator Ndume or someone in the committee would have spotted the anomaly and avoid the tragic-comedy of errors, in which the President was perceived to be attempting a surreptitious backdoor padding of the external borrowing financing provisions of the budget approved by the same lawmakers, who rejected the request. The situation is more perplexing because the government is already undertaking internal borrowing to finance the budget.
With the delay in passing and take-off of the budget, the attendant multipliers and time lags resulting from the rejected external loan request portend unfavorable results all over the economic and social sectors. All of this is tacky and avoidable if the President identified with the yearnings of the people and adopted the budgeting process as his first responsibility tool for Nigeria. The standing view is that the President has been derelict in his duty to own this all-important national document called the budget.
Meanwhile, it is necessary to put the main issue raised in the loan rejection in proper perspective as Buhari looks up to external borrowing to finance investment to drive national economic recovery. A foreign loan is not charity: foreign creditors are hardnosed businessmen that are wont to create banana republics for wholesale exploitation. Therefore, before he jets out to the capital of another developed economy for alms, Buhari should be reminded that government’s role is to provide the conditions for the private sector to invest and create employment, trade and grow the economy and in the process remove poverty.
In the world’s successful economies, domestic bank credit fuels economic sectors. For example, domestic bank credit disbursements to economic agents as a proportion of GDP exceeds 300% and 200% in Japan and USA respectively. For Nigeria, it is only 20%. Yet the private sector deposit base in Nigerian banks (excluding public sector deposits that have finally and rightly been sequestered in the Treasury Single Account) is enough to raise the indicator to more than 70% of GDP. It does not make a rational economic sense for the administration to pin hopes for economic recovery and national prosperity on external borrowing. Prohibitive interest rates that render domestic bank credit capacity proportionally in excess of 50% of GDP disadvantages the national economy but simultaneously benefits foreign economies where Buhari wants to go to contract foreign loans. Such unpatriotic policy measures only perpetuate corrupt self-enrichment of the political elite and their conspicuous consumption.
In a country where government has crowded out the private sector, and the public sector is the biggest business entity, the jumbo loan constitute a major part of the oxygen of economic life. It, therefore, should embody the vision and bear the imprimatur of the person Nigerians elected as their president. The errors of omission and commission that led to the senate’s rejection of the loan request is a sad comment on Buhari’s style and it illustrates another poor dimensioning of the stature of presidential presence and the amplification of the absence of good personal leadership example by Mr. President.
Ordinarily, the budget is the arithmetic value and processes deriving from the President’s vision, to the collective wisdom of his cabinet and the entire apparatus of the government. The philosophy of the leadership, rigors, priorities of vision, are central to the federal budget and, therefore, is far more than just economic projections. Its significance is in signposting the running of government affairs, measuring employment generation, job creation quotient and other critical items of a serious government. There is therefore the need for the Senate to compel the expeditious resubmission of the $29.96 billion loan request as the funds are required for infrastructural development projects that would jump-start the economy out of recession.
In point of fact, the President literally owns the budget, and by failing to send the requisite attachment to explain his borrowing plan, Buhari belittled the process. He failed to elevate to an appropriate pedestal what is supposed to be a document of vision for the nation; and one which affects the lives of citizens. Beyond that, the loan request is a matter of great public interest to Nigerians. In effect, what the President did was a mark of contempt for the Nigerian people. This is as un-presidential as it can get; and it raises fundamental questions that seriously undermine the president’s authority in discharging his official duties. Buhari would want Nigerians believe that his attention to the economy is total as he said the other day that he “cannot be distracted” from his “efforts to salvage and revamp the national economy.” He should therefore focus on the most important aspects of his job. The country does not deserve the crossroads to which it has been taken by the loan rejection saga.
