How rubberstamp National Assembly plunged Nigeria into N96trn debt

…Akpabio-led Assembly may be worse

Data have shown that the National Assembly leadership from 2019 to 2023 did more harm to Nigeria than good, plunging Africa’s most populous nation into a heavy public debt.

Apart from being a rubberstamp legislature, it sanctioned most of the economically incomprehensible decisions taken by President Muhammadu Buhari, raising public debt by 244 percent in just four years. Ahmed Lawan, former Senate President

Make no mistakes about it, the current Godswill Akpabio-led National Assembly may not be different, given its inclination to please President Bola Tinubu who installed it by all means, even to the detriment of Nigeria’s flailing economy.

Enwerem to Lawan

In 1999, Senate President Evan Enwerem was the head of the National Assembly under President Olusegun Obasanjo. He met a total public debt of N3.55 trillion, according to the Debt Management Office (DMO).

READ ALSO: Like Buhari, Tinubu wastes billions of taxpayers money on foreign trips, cars, leisure

Mr Enwerem lasted for only five months, ushering in Late Dr Chuba Okadigbo on November 18, 1999. From November 18, 1999 to June 6, 2015, Nigeria had 5 Senate presidents, including Mr Anyim Pius Anyim, Mr Adolphus Wabara, Mr Ken Nnamani and Mr David Mark.

Source: Debt Management Office

Over this period, total public debt grew from N3.55 trillion to N12.119 trillion, representing 241 percent increase over the 16-year period.

The May 2015 ushered in President Buhari, who came into office with the “change” mantra. However, his preferred candidates -Ahmed Lawan and Femi Gbajabiamila- failed in their bids to win the leadership of the Senate and the House of Representatives.

Consequently, a “palace coup” led by the opposition Peoples Democratic Party (PDP) brought in Dr Bukola Saraki, who led the National Assembly from June 2015 to June 2019. That turned out to be a bright spot for Nigeria’s debt profile.Senate President, Mr Godswill Akpabio

On November 1, 2016, President Buhari sent a request to the National Assembly, asking to borrow $29.96 billion from external sources. But the Saraki-led Senate rejected it.

But Mr Saraki’s leadership saw the public debt grow from N12.12 trillion to N25.7 trillion, representing 112.046 percent increase over the period.

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After the exit of Saraki came Mr Ahmed Lawan, who superintended what political and economic analysts described as a “rubber-stamp National Assembly.”

Mr Buhari had to re-present the $29.96 billion loan request before the Lawan-led Senate in December 2019. The request was eventually approved.

Under Mr Lawan’s National Assembly leadership, public debt rose from N25.7 trillion to N88.38 trillion, representing 244 percent increase over the period.

Under Mr Lawal, President Buhari violated Section 38 (2) of the Central Bank of Nigeria (CBN) Act, which says: “The total amount of such advances outstanding shall not at any time exceed five percent of the previous year’s actual revenue of the Federal Government.” 

Mr Lawan allowed Mr Buhari to exceed the 5 percent “ways and means” threshold, raising Buhari’s loans from the CBN from zero to N22.7 trillion in 8 years. In fact, there was little division of power between the executive and the legislature from 2019 and 2023, analysts said.

“Dr Ahmed Lawan’s Senate presidency was not people-oriented. He and Mr Femi Gbajabiamila cannot be exempted from the economic inactions of Buhari’s government. If they had put some pressure on the executive in respect of borrowings, the results could have been different,” said United Kingdom-based economist, Ms Maryjane Thelma.

Under the new Senate President, Mr Godswill Akpabio, President Tinubu has asked to borrow $8.7 billion, raising public debt profile to N96 trillion (using N750/$ exchange rate). The current Senate had earlier approved the borrowing of $800 million and $1.95 billion from Mr Tinubu, as earlier reported by Economy Post.

These borrowings have raised public debt to N96 trillion.

Experts say there will be more borrowing and the Akapbio-led Senate will toe Mr Lawan’s path by approving them expeditiously – even without debates.

Lives worse with growing debt

The naira has weakened by 87 percent to the dollar since 1999, according to the CBN data. Inflation has quadrupled since then. However, public debt has risen 26 times, showing that Africa’s most populous nation has borrowed uncontrollably since 1999.

But not much has changed on the economic front. In 1999, poverty rate was estimated at 70 percent, according to the National Bureau of Statistics (NBS). This fell to 54.4 percent in 2004.

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Nigeria’s poverty rate was estimated by the NBS at 40 percent in 2019 while multidimensional poverty stood at 63 percent in 2022,with 133 million citizens without access to basic things of life. In fact, Nigeria was world’s poverty capital in 2017.

Unemployment stood at 8.2 percent in 1999 but rose to 33.3 percent in the 4th quarter of 2020 under Mr Buhari.

Nigeria’s economic growth stood at 0.4 percent in 1999 but peaked at 34 percent in 2004, said the World Bank, but growth under the 8-year administration of Mr Buhari was less than 4 percent – even with its N76.26 trillion borrowing.

Mr Buhari started new railway projects from Lagos to Kano, Itakpe to Warri, Kano to Niger, among others, but Nigerians were worse off under him. Roads got worse due to poor maintenance and the country was plunged into fiscal crisis.

“Buhari’s administration built infrastructure with the loans, but what did it spend on education and health? How did it increase incomes of Nigerians? If you refuse to improve your human development indices, you will have a population that cannot stimulate growth,” said professor of economics, Charles Edebolu.

“Your population will also destroy those infrastructures when they lack education. Two, how can you grow when there is insecurity in food-bed zones? Three, the Nigerian environment did not attract investments during his tenure. So, you can build all your infrastructures but lives will remain the same or be worse off if you fail to spend right,” Prof Edebolu said.

Nigeria debt to GDP not too high

Nigeria’s debt to gross domestic product (GDP) is not the worst among emerging or frontier countries in Africa. While public debt to GDP is 54.1 percent in South Africa, it is 28.48 percent in Nigeria.

Source: Focus Economics, Economy Post, World Bank

Public debt to GDP in 55.1 percent in Kenya, 62.4 percent in Ghana, 86.7 percent in Egypt, 45.3 percent in Rwanda, 51.6 percent in Ethiopia, 38 percent in Tanzania, and 17.3 percent in Botwana.

Multilateral agencies say that Nigeria is not in debt crisis, but have revenue and debt servicing problems.

“The assessment of debts should not be based on the nominal value of a debt stock but rather on how it relates to many other economic variables. Yes, it’s at the highest level because you measure it in naira terms but you have to look at as a ratio to GDP and many other indicators,” said Director of the African Department, International Monetary Fund (IMF), Mr Abebe Aemro Selassie, in October 2023 in Morocco, as reported by BusinessDay.

READ ALSO: Nigerian govt spends N30bn on Ajaokuta staff salaries, steel imports hit N5.75trn

“When you look at the debt in Nigeria, our sense is that the stock is manageable in general but it is the debt servicing that is much more difficult. And the debt servicing is hampered by the country not generating enough non-oil tax revenues. And I think it is by far the most important area of reform and work for any administration in Nigeria.”

A rubberstamp legislator

Economists believe a rubberstamp legislature has led to an unbridled debt in Nigeria even when viable sources of revenue have been neglected.

They say that the National Assembly has been a cog in the wheel of Nigeria’s progress owing to issues arising from the chambers, including budget padding, corruption, scandals, among others.

“Nigeria has had a rubber-stamp legislature in the last 8 years to the extent that they could not ask the legislature to look at idle assets, unexploited minerals and other areas where revenue can be explored. All we hear is shouts, probes, bribery, padding and corruption,” said an economist, Dr Ade Adekambi.

“We spent almost N1 trillion in maintaining the two houses of the National Assembly, and what have we got? Approval of debts and probes without results. Where is the Niger Delta Development Commission probe? Where are the probes of MDAs that failed to remit money to the government coffers. This is why I am saying that we should remove either of the two houses and save costs,” he said,

“The current leadership of the National Assembly may not be better. It is all written on the walls.”

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