By Wole Balogun
S.A to VC
A professor of Finance of the Federal University Oye-Ekiti (FUOYE), Prof. Babatunde Afolabi, has proffered professional solutions to the debt burden incurred on Nigeria by successive governments who have failed to address the recurrent economic hardships befalling the nation since the late 1970s.
Prof. Afolabi advocated for a number of economic measures which included immediate stoppage of application for loans , creation of wealth rather than alleviating poverty, and reduction of the cost of governance among others.
The University don who has had rich experience in the Nigerian Banking sector before he joined the academia, made the recommendations during the 10th inaugural lecture of the University which he gave on Wednesday at the faculty of science’s lecture theatre of the institution.
Entitled: “Cut throat obligations :
Quandary in Acres of Diamonds” a title he explained as a metaphor to capture an ironic situation of Nigeria where we have been plunged into humongous debt in spite of being endowed with enormous human and materials resources because of poor management by leaders, the lecture goes down memory lane to trace the historical development of the recklessness of leaders in obtaining loans which they also mismanage recklessly.
He said: “The Federal Government appears to have been beaten by the bug of the recklessness of loan applications . The recent one being the procurement of N22.7 trillion in May 2023, for which the government could not point to anything meaningful the funds were used for. “
Afolabi observed that for over 40 years, Nigerian leaders have been obtaining loans and mismanaging such loans or diverting them for other unproductive uses and thereby:” further compounding the debt profile of our beloved country.”.
Observing further, the don said: “Reasonable borrowing to finance public and infrastructure development are the key to faster economic growth but excess borrowings without appropriate planning for investment may lead to heavy debt burden and cut throat interests payments. The outcome will manifest in form of several undesirable effects on the economy and social well-being.
“Nigerians have been plunged into one hardship after another ranging from the devaluation of the Naira through Second Tie Foreign Exchange Market (SFEM) now Foreign Exchange Market (FEM) to the rising prices of commodities, inflation etc. “
Prof. Afolabi disclosed that Nigeria has no business with borrowing loans if leaders had been prudent with managing our resources, he listed the challenges of repayment of internal and external debt as : “high debt services costs, limited revenue generation, budgetary constraints , inefficient debt management, exchange rate fluctuations , weak economic growth, corruption and subsidy payment among others.”
While lauding the strong will exhibited by President Bola Tinubu to remove the subsidy on fuel, he cautioned that the government should not totally remove the subsidy saying doing such would incur untoward hardship on the masses.
“The continuing payments of subsidies on PMS has single-handedly been a serious drain on our revenue to the tune of trillions of Naira yearly . The most intriguing part of the story is that subsidy payments do not only fluctuate but the whole process is full of controversy and corruption ridden…We are a blessed nation with rich human and material resources. We do not have to suffer if our resources are judiciously used .
“The stoppage of the fuel subsidy by the current administration is a step in the right direction as that would gradually heal our economy. However, you do not completely withdraw subsidy as doing that will make the masses to suffer. We must also work on wealth creation rather than poverty alleviation.”.
Prof. Afolabi sounded philosophical when he itemized ideas from Russel Cromwell’s book entitled, “acres of Diamonds”, to further explain what the Nigerian leaders must tdo to take the nation out of the woods of debt burden.
He listed the six ideas as, “each of us is right in the middle of our own “acres of diamonds” if only we would realize it and develop the ground we are standing on before charging off in search of greener pastures; Opportunity does not just come along-it is there all the time-we just have to get it; In life, when we go searching for “something” we should know that what that “something “ looks, smells and tastes like so that we can recognize it when we find it; The grass isn’t always greener on the other side, before we give up what we already have, we must make sure that what we”re getting is better than what we already have; And it is good to aspire for more because life is about moving forward’ but don’t let greed dictate how you value and feel about yourself.; and Your diamond are not in far-away mountains or in distant seas, they are usually in your own back yard if you will take time to look for them. “
The don equally noted that: “Nigerians” acts of diamond can be expressed in terms of population, vast arable land, oil and gas reserves , abundance of solid minerals and great potentials in tourism.”
He therefore recommended strong demonstrations of political will by the leaders, human capacity development, tackling the challenges of security, harnessing agricultural potentials , addressing infrastructural deficit , reorganizing key institutions such as the Central Bank of Nigeria, Nigerian National Peteoleum Corporation, reducing the cost of government, immediate stoppage of borrowing to finance consumption and recurrent expenditure and prioritizing wealth creation rather that poverty alleviation as solutions to permanently solving the problem of debt burden on Nigeria.