Comrade Razaq Olokoba is a man of many parts. He is a Charted Public Administrator, Management and Security Consultant and human rights/pro-democracy activist.
The Ilorin Kwara State born youthful public affairs commentator in a press conference weekend in Lagos allayed the fears of the citizenry over their concern about the debt profile of the country saying it is nothing to be panicking about.
Razaq Bamidele, who was at the conference brings the reports:
Don’t you feel that the debt profile dished out by the Debt Management Office (DMO), is frightening?
I feel good about it because it is normal for us to know. The information is just as a reminder because it is not wrong for the public to know the debt profile of our country and each of the states. As far as I am concerned, it does not however call for panic.
As a chartered Public Administrator and a Management Consultant, I know very well that the universal standard all over the world is that, what the government intends to do in most cases, funds to execute it may not be readily available. And where available, it may not be sufficient. And that is why, as demands keep increasing, if you study the ecology of public administration, we are made to understand that demands of the public keep increasing over the time and it is the responsibility of the government to address those changes.
How do you mean in clear terms?
For instance, the security challenges 20 years ago were different from what is required to secure our country today. Pattern of movement since that period has also changed. By three four, five years ago, the mode of transacting business has also taken new dimensions as a result of COVID-19 pandemic.
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So, results of all these changes would automatically inform how government would also change the pattern of government. If that is the case, resources to carry out their responsibilities might not be enough. And that is what calls for securing loans, borrowing and seeking for interventions by governments either state or federal. I know very well that, infrastructure are essential means of survival of any nation of today. And so, it cannot be delayed. It is not good to be deficient in infrastructure. And with the pace the world is moving, you cannot be tagging behind. You have to be moving as equal with the rest of the world. The rest of the world cannot be talking of metro line and you talking about horse riding as a means of transportation in this century.
But don’t you see that the figures dished out are frightening?
Even then, as far as I am concerned, there is no need to panic. However, what should bother us is about the capacity of the debtor nations and states it concerns to be able to pay. Has the mode of payment worked out? Are there assurances of capability to pay back? These are necessary such that repeated reminder from the creditors would not distract the government? So, if there are assurances of capability of payment, there would not be distraction. You borrow, you return and you carry out the responsibility of governance and so on and so forth.
Do you think states or countries that cannot pay back still take loans?
I know very well that there might be some states that may have challenges in paying back. We have said it severally that it is important to encourage our states to look at various income avenues to be able to run their states properly. This is not the best time for our states in Nigeria to rely on allocations from Abuja. This is the time all the states must realise the need to look inward for Internally Generated Revenue (IGR). They have to run government business like and not in the mode and pattern we have been running it in the past which was expectation from Abuja before salary could be paid and other responsibilities could be carried out.
For example, if you look at the cash flow projection of Lagos state, where we live and understand its economy, we know very well that the cash flow is sufficient to pay back any loan or debt incurred. If you look at population of Lagos, you cannot afford not to address the needs and demands of 25 million people. It would be dangerous for a state like Lagos not to pay attention to security, health sector, education sector, transportation sector and even the public service where various agencies carry out their responsibilities and activities.
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And for any agency not to carry out its responsibility in a metropolitan city like Lagos that is fast establishing her status as a Mega City there would be problem. And so, you need to give loans to such a state. And I am convinced that, there is no need for panic when you look at the economic situation in Lagos, I am sure we are in a safe hand. This is simply because the man at the helm of affairs in the state, Mr. Babajide Olusola Sanwo-Olu, a seasoned administrator, a tested and trusted technocrat is equal to the task.
If you look at how the state survived the COVID-19 pandemic that brought economic depression to the whole world, the #EndSARS destruction and other numerous challenges that always rear their ugly heads in states like Lagos, you will know that there is no cause for alarm on the loans that the state has acquired because it has proved beyond reasonable doubt that it has the capability to pay back. On this background, even a layman can do his economic mathematics and arrive at the conclusion that, as far as debt profile is concerned, attention should be focussed on the fate of other states but not on the fate of Lagos.
Can you give more instances of your assurance over Lagos?
Okay. For instance, the Metro Line is on board which will move half a million (500,000), people on a daily basis. That is huge in number and a very big investment for Lagos. That is why we said it earlier that it is the cash flow that we should look at before profiling states along their debt burden. So, if you now put other states side by side with Lagos, you will agree with me that other states in Nigeria have a lot of catch up to do with Lagos.
Some states with modest incomes like Kwara might also be faring well. So, the news of debt profile dished out is more of analysing states’ capacity of paying back. That is what the agency for the profiling should be doing. Since the information about our debt profile came out, some of us the public affairs analysts have been engaged by the media over the panic it generated. Well, it is important to know, but the duty of the agency that threw out the information is not supposed to be mere throwing out frightening data and go back to sleep. No. instead of blanket information, they should have taken the pain to analyse in clear terms, capacity of some states that could pay back and states that may have challenges which we civil society organizations have started doing now.
We have never stopped at looking at the states all over the federation through our dignity tests. We have done it for governors. We have done it for Ministers and we have even done it for the President. And over and over again, Lagos State has always passed our integrity tests in terms of capacity to deliver. So, what they should do is to objectively look at the capacity of other states without taking recourse to what the government has said. I mean independent analyses which we have done already. There are states that need to brace up to pay back. But with Lagos, we are in safe hands with Sanwo-Olu and his team of capable hands.
What, by your understanding, can we derive from the debt profile information?
Simple lesson if I may put it that way. We can now realise that gone are the days when citizens didn’t think they had roles to play in assisting the government to succeed. This is the time the welfare of the citizens should be uppermost in our mind. The Ukraine experience has taught us that, if there is crisis, no country would accommodate us. If Lagos or any state enters into humanitarian crisis, there would be trouble. So, the peace and harmony we have been enjoying in Nigeria, everything humanly possible must be done to sustain it. We should always try to make sure that our country, Nigeria must always stay as one.
We have said it severally and we are still saying it again that there is nothing we are consuming in Nigeria that we don’t have capacity to produce. And whatever the stumbling block against that might be, we have the golden opportunity right now to remove it by putting the right candidate in Aso Villa on February 25. The person that understands our peculiarity, who has the track record of surviving at difficult moments should be considered. And luckily for us, there is somebody who has done that already among the presidential candidates jostling for the office. That is the direction we should be looking at.
Are you asserting that borrowing is normal?
Yes I insist there is nothing wrong in borrowing because it is inevitable for development. Once you know if you borrow to pay your children’s school fees, you have salary to pay back, no problem. You would have a nice night and sweet dream. It is when you borrow and don’t have means of paying back that you will have issues. The world has recognized the need for countries to seek financial interventions knowing full well that no government has sufficient funds and resources to fully carry out its responsibilities.
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So, we have Paris Club, we have London Club, we have the World Bank and many other institutions that saddle themselves with responsibilities of lending countries money and also managing the lent out money. We are in line as a nation. What we should have as consolation is to look around ourselves as per the debt that has been incurred in the past seven years, what effect has it had in our life?!
If you look at the infrastructure in the country today, it has made it easier for businessmen to take their goods from Lagos to any part of the country through the road. And it will become further easier when the railway becomes fully functional. And it is from these services that people would pay their taxes and government would generate incomes for further ventures to pay back the debt.
That is the consolation that we should be having. If we don’t have environmental development where we see where the borrowed money is being judiciously utilized, that is where concerns could be entertained. So, we should support the government with ideas on how to hasten up payment by coming up with brilliant proposal on what the government should be doing like the need to perforate the soil to bring out its natural resources for our use.
By and large, in summary, there is no cause for panicking in the news about our debt profile; rather it is just for us to know the status of our states and also to understand what states are doing so that individual states would know how to engage themselves on the economic future of their states.
The fear in several quarters is about putting unnecessary burden on the nation through debts. But why are you still insisting borrowing is good!
Yes, I insist there is nothing wrong in borrowing. Lending agencies and institutions should keep giving money out because if they keep the money in their vaults, the money would be redundant and they would not make profits out of it! It is to the creditors’ joy that we keep borrowing. The only concern is how to identify those debtors that can pay back and those that cannot pay back. There were several examples in the past where countries borrowed money and refused to pay back. That is what money lenders in the world are always conscious of. They would not want to lend money to government they know is not popular or that does not have the capacity to pay back particularly countries that are not democratic and where the country is prone to coup de tat. Or countries run by the military or run by leaders against the wishes of their people. Those countries may not be able to enjoy that facility. So also, countries that don’t conform to the world economic standard of practice may not enjoy such lending facility
That was why when President Muhammadu Buhari came on board in 2015, the first thing he did to redeem the image of the country was to uphold all the business agreements the previous governments before him entered into. He did not cancel the agreement with the Nigeria’s government and the power sector, the Telecom Sector and all other Private Partnership agreements. All other agreement Obasanjo and Jonathan administrations entered into, he respected everything. That was what gives countries leverages to borrow money.
I pity those states that have cancelled the PPP arrangements of previous governments. Such states may not have good images with the international money lenders. There are states that on the strength that they have disagreement with the previous governors, cancelled the contract. That is not good for the government. If you don’t want the government to borrow money, there are opportunities to stop it. But the moment the government has borrowed money, it is the responsibility of the citizens to compel the government to pay back because of your image. We travel all over the world. People will assess you based on such issues. For money lenders, they are more conscious today. I know this because as chartered public administrators, we have gone through a lot of studies and we understand and appreciate the dilemma of those international money lenders. We understand the challenges they are facing throughout the world.
When Fidel Castro came on board in Cuba, he said the money his predecessor borrowed did not get to the people of Cuba. So, he said the money was not only not payable but also uncollectable. The International Monetary Fund (IMF), Paris Club, London Club, World Bank would not commit a mistake to do business with such countries again because of the danger of not paying back.
The government may have reasons for not paying back, but the moment your government has taken a loan, as citizens, you are the watch dog of your government. If you make noise about a particular facility, money lenders in the world always listen to the observations of the citizens. And immediately the citizens raise concern, the lenders will not give such a country the money. But if you keep quiet until your government takes the money, you have to pay back.
When loan was taken to do the Toll Gate at Lekki, it improved the economic standard of properties in that axis. The prices became sky rocketed and businesses improved drastically. And people say we should not pay back the money we borrowed. That is not too civilised for us to do. If you run a free market economy we are doing in Nigeria, the capitalist economy, you must respect the rule of engagement. If you engage in such economy, the bottom line is nothing but profit. Once the money lender gives you money, they want their money back with profit. You also need to use the money judiciously so whenever you look back 20 years, 30 years later, you will not regret the painstaking efforts you put in to pay back.
The Lekki corridor has become permanently the property of Lagos State today. And that is how Lagos has become the leading economy in the country today and third in Africa after Johannesburg in South Africa and Cairo in Egypt. It is not by magic but by capacity to be able to do it.
By and large, the public should take time to understand what is public debt, the advantage, how to manage it and how to guide your government either to encourage your government to incur the debt or nor to incur it. For states, those of them who don’t have the capacity to pay back should not borrow more. But states that are thriving well and having a fantastic projection like Lagos to move the state forward should be allowed to do so.
In summary, there is no need to panic. There is just the need for us to be well guided.