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Borrow to live a lie


If you don’t know that a yellow Garri ‘mudu’ that used to sell for N140 in Abuja is now N500, you would at least know that a liter of diesel has gone from N240 per liter to N820. This is why my barber disagreed with the headline of the newspaper I was reading: INFLATION IN NIGERIA REACHES RECORD LEVEL OF 20.52%. The report went on to explain that this new figure was 3.52% higher than the rate recorded in the same period last year, which was (17.01%).

The fact that the data was produced by the National Bureau of Statistics did not assuage his disapproval.

“Sorry sir, I’m just a poor barber, but I’m not stupid. What is this nonsense about inflation rising to 20.52%? For my part, I can tell you that I have lived with a 300% increase in my basic cost of living over the last two years while the money in my pocket has depreciated by 400%”.

I wanted to chime in with details about the variables taken into account in the calculation of the consumer price index, but I changed my mind because the good old barber used to skillfully shave my neck area in the days of the facts. Any commotion could make him decide something.

So I just sat there and endured his 45 minutes of ranting which thankfully ended when his colleague said, “Calm down, this pain will pass soon.”

I made a mental note of this statement. It is perhaps the unctuous invocation to throw arguments into the murky waters whenever someone expresses their frustration at the way the Nigerian economy has headed south as fortunes robbed of good many of its well-connected political elites are headed for the stars.

As I walked out of the salon, I showed the hairdresser another caption that indicated that Nigeria’s difficult economic situation would not suddenly disappear: THE NIGERIA TO BORROW N11 TRILLION TO FINANCE 2023 BUDGET. The nervous man almost jumped off his apron. “What have we done with all our past income and borrowings”? he asked as I slipped through the entrance to escape his harangue.

The lyrics of singer Omawumi’s hit played in the back of my head:

If you ask me

Na who am I going to ask?

The question we see thus, and we begin

No, I’ll talk, I’m heavy on the mouth

If you ask me

The material for the floor

Hey! Na who am I going to ask?

Ours is a classic case of incompetent resource management, forcing people to toil at elephantine grind to feed on crumbs like ants. As the rest of the oil-producing world reaps the benefits of the Russian-Ukrainian war windfall, our people are suffering under a regime of opaque oil prices that successive governments have called “subsidized”.

Even then, we live on loans, strutting around like peacocks in borrowed feathers. The federal government is proposing an overall expenditure of 19.76 trillion naira for the fiscal year 2023. The budget deficit is expected to exceed 12.42 trillion naira if the oil subsidy is maintained throughout the 2023 budget cycle, but the government plans to limit the damage to 3.36 trillion naira so that the next government can deal with the problem. The extra pain box was only thrown forward. We will have to face the demon headlong some day soon.

There are concerns that the government may not be able to finance investment projects in 2023. We are therefore embarking on all announced major borrowing just to maintain a semblance of normality.

We should not borrow a penny if we had managed our resources sensibly. Not so long ago, the Obasanjo administration paid off our debts in the hope that we could then start planning for a rosy future without the over-indebtedness and notorious conditionalities of major lenders. Now we can’t even meet our OPEC quota and there is a network of holes through which national revenues find their way into private pockets.

What we defined as corruption in the First Republic was child’s play compared to our current system of plunder of industrial proportions. Figures released by government agents confirm that thieves within the system have now proliferated all over the nerves of the official network as they compete with the government for revenue sharing.

As Nigerians feared the prospect of another bleak year ahead, the world was shocked to learn that a major crude oil carrier, MT Heroic Idun, had escaped Nigeria’s maritime environment with oil. crude stolen and had been arrested in Equatorial Guinea. The Nigerian Navy later explained that its officers chased the vessel and sent signals to Equatoguinean authorities to interdict the ship. The ship failed in its oil theft mission.

Experts in oil affairs have revealed that the entire chain of oil production and accounting is tainted with fraud. A tanker the size of the MT Heroic Idun could not have left its country of registry and strayed into Nigerian waters had it not been for some sort of arrangement to lift the cargo.

The ship was built in 2020, so it is a brand new ship. Owned by Hunter Tankers AS, she was flying the flag of the Marshall Islands at the time of the ban. She is 336 meters long with a beam of 60 meters and a summer deadweight of 299,995 tonnes. It has a capacity of 3 million tons of crude oil. It’s not your usual smuggler’s boat, far from it.

There are six oil export terminals in Nigeria. Shell has two, while Mobil, Chevron, Texaco and Agip have one each. Shell also owns the Forcados Terminal, which is capable of storing 13 million barrels (2,100,000 m3) of crude oil in conjunction with the nearby Bonny Terminal.

According to the Nigeria Extractive Industries Transparency Initiative (NEITI), 53.28 million barrels of oil were stolen in 2018 while the following year saw 42.25 million barrels worth $2.77 billion. According to OPEC sources, Nigeria’s crude oil production averaged 1.238 million bpd in June 2022. The country was consistently producing 2 million bpd in healthier times. The kind of theft that’s happening right now between big and small oil thieves, it’s almost like everyone wants to have a piece of the action before theft goes out of fashion.

Local thieves sourcing crude oil for their artisanal refinery are only a relatively small part of the problem. While it is true that over the years young militants have become proficient in plugging into oil pipelines, the damage they cause cannot be compared to the wholesale theft carried out with oil tankers such as the banned MT Heroic Idun ,

While the significant involvement of various participants in the Nigerian oil theft business is acknowledged, there is also the web of protection that the political elite and security forces provide to lower level oil thieves. The profitability of crude oil products and the lack of government oversight in monitoring pipelines are incentives for anyone involved in the illicit trade.

The problem of oil theft in Nigeria is a mixture of corruption and incompetence. We are not able to take into account an estimated production of 2 million barrels per day whereas in contrast, Saudi Arabia counts every drop of oil it produces. Crude oil production in Saudi Arabia averaged 8220.68 BBL/D/1K from 1973 to 2022, reaching an all-time high of 12007 BBL/D/1K in April 2020.

While unveiling new Production Sharing Contracts (PSCs) with its partners, the Group Managing Director of the Nigerian National Petroleum Company (NNPCL), Mele Kyari, hinted that while the local oil theft had been contained in a To some extent, there were international cartels. implicated in the theft of Nigerian oil.

Kyari said Nigeria is putting in place a firm mechanism to mark its rough exports so that buyers can easily identify stolen rough.

So here we are, heirs of landowners reduced to tenants, descendants of local residents who must wash their faces with spit, inhabitants of a rich land defined by bewildering misery. The Independent Corrupt Practices Commission (ICPC) has just told us that the 2021 budget has been inflated by MDAs with N400 billion for duplicate projects and N50 billion for ghost workers.

We know how we got to this sad juncture and what we need to do to get out of the debtors club. Borrowed funds and the irresponsible way we have deployed some loans are surefire ways to end badly. Do you manage a budget largely financed by loans with no capital provision?

No wonder my barber asks, “Where has all our prosperity gone?”

‒(Wole Olaoye is a seasoned public relations consultant and journalist. He can be reached at [email protected], Twitter: @wole_olaoye; Instagram: woleola2021)