An unimaginable entourage of government officials stormed Forum on China and Africa Cooperation (FOCAC), China on September 1, jostling desperately with other African leaders for a share of $60 billion of badly needed funds for infrastructural development. The move was greeted with severe criticism in droves from the elites who opined the nation is gambling away the future generations with funding requests for white elephant projects.
It was in this same wave that news of Zambia’s risk of losing some of their national assets because of Chinese loans being defaulted rocked airways. Sri Lanka too is not left out of same fate wherein one of its most important ports got taken over by China. It would not even be too long into the future before unavoidable repercussions happened to African countries as was the case with Zambia.
This brings to mind how Nigeria realized how indebted it was to the Paris Club in the early 2000’s that payments became a severe burden on the government which emerged from the new democratic regime on May 29th 1999. It became so burdensome that effort began to seek for debt forgiveness in earnest. While the Paris Club, the World Bank, IMF and other lenders which Nigeria owed were diplomatic enough to consider Nigeria’s fresh democracy as at then, there is a greater chance now that these smart Chinese lending institutions would not take any debt forgiveness plea from the Nigerian government when push comes to shove. This is business after all.
In a situation where domestic debt and foreign debt piles up, the solvency of such state is greatly in doubt. Yet Federal and State governments keeps accepting unfair terms from the Chinese lenders. If at all, it is only proper that whatever projects such loans would be utilised for should have been properly evaluated by financial experts to be capable of generating more income in excess of the loan principal and interest.
The Osun State government also comes to mind as a vivid example of a state sunken in so much debt that it is unable to pay salaries and pensions because most of its accruing allocation from the federation account is for debt servicing. The even more unfortunate part is that most of the projects these loans and debts- like the Sukuk bond secured by the Osun State government- hardly generate are mostly wasted and over-inflated. What matching internal revenue, can a road which is not tolled generate? How much matching revenue can a school beautification project generate to service the loan equivalence? While roads, for instance, enhance commerce and logistic efficiency, borrowing at exorbitant cost to the citizenry to build such roads is counter-productive. Would such projects even contribute to government functional efficiency in the least or short-cut bureaucratic impediments in the near or long term?
This is where our leaders have to do better in investigating and isolating for execution the best projects which should take priority. These type of projects should be more beneficial to the citizenry via job creation while enhancing citizen spending power through wealth creation. It is obvious now that we need new ways of thinking about public governance, prioritizing what is most essential at a point in time rather than just saturating the environment with non-beneficial and unprofitable ventures.
If we are not careful, desperate leaders in states and at the federal level will continue to mortgage the future of our collective wealth and at the same time bankrupt it. And this is where citizen self-awareness and participation in governance remains a very essential part of civic duty.