Nigeria headed towards economic bankruptcy, Labour raises alarm

By SOJI-EZE FAGBEMI, Abuja

As a result of massive petroleum products importation and debt overhang, the Nigeria Labour Congress (NLC) has raised the alarm, saying Nigeria is on the pathway to economic bankruptcy.

In its May Day message, the congress also cautioned that foreign debts should not be a way of life, warning that there are a lot of landmines in the plot of debt servitude.

While holding a low-key May Day celebration at the Labour House, Abuja, the NLC on Friday called for an end to official corruption and waste, adding that the organised labour in Nigeria viewed the huge severance payment and pension to political office-holders as a form of corruption.

President of NLC, Ayuba Wabba, said: “As we had cautioned earlier, foreign debts should not be a way of life. There are a lot of landmines in the plot of debt servitude.”

According to him, Nigeria needs more than $6.9 billion in emergency funds from international lenders to deal with the coronavirus challenge, while the country had approached the IMF, World Bank, the African Development Bank and the Islamic Development Bank to raise the loans.

Also quoting Bloomberg, Wabba said the IMF was set to grant Nigeria an emergency funding up to the tune of $3.5 billion.

The NLC president said: “In December 2019, Nigeria’s external debt hit a 16-year high of $27 billion with a debt servicing commitment of $1.5 billion per year. That is about five per cent of our 2020 federal budget and 75 per cent of our external reserves.

“As much as we need to deal with our liquidity challenge, we all must be concerned that we are taking steady steps back to the stormy and murky waters of bad loans to the Paris Club.

“It is very sad that our current total debt profile is almost at par with what we owed the Paris Club before the debt amnesty of about $18 billion from a total debt stock of $35.994 billion.

“Internally, our borrowing status leaves no cheer. CBN records show that the Federal Government borrowed over N4.4 trillion by ways and means in 2019. This is far beyond the maximum of N4.5 billion allowed in CBN legal statutes.”

While the congress believed that there was nothing wrong in borrowing to finance development, Wabba regretted that much had not been seen in the area of development.

He said: “Our worry as workers is that we are not seeing much of the development. We are largely borrowing to consume. Our hospitals are not being re-tooled with first class facilities. Public schools are still an eyesore to basic decency. Our roads network still does not support a 21st century economy.

“Apart from renewed vigour in the rails system, the rest of our transportation infrastructure belies our developmental aspirations. So, what exactly are we doing with our loans?”

The NLC president said related to the debt overhang is the contradictions in the petroleum sector, adding that the dependence on imported refined petroleum products have left the country perpetually broke.

According to him: “The Nigeria Labour Congress continues to shout itself hoarse that the roadmap of massive petroleum products importation is a certain pathway to economic bankruptcy. No developing country would spend her scarce foreign exchange on the importation of refined petroleum products as we do and remain solvent.

“A few weeks ago, government reduced the pump price of Premium Motor Spirit by about N18 owing to over recovery as dictated by the global plunge in the prices of crude oil. Nigerian workers insist that it is anomalous to subject the price of a product sourced from Nigeria to the volatile global commodities market. Nigerians should be the first partakers of the fruits of our resources.”

With dwindling resources available to governments all over the world to service the needs of their people, due to COVID-19 pandemic, the NLC president said it would be suicidal for any government to still tolerate waste and outright embezzlement of public funds.

“Right now, it is important for all Nigerians to see the fight against corruption as a collective battle for survival. This fight must be fought in a transparent and holistic way. Corrupt persons in and outside government must be dutifully tracked and diligently prosecuted. This requires a reformed justice system. We also reiterate our demand for specialised courts to speed up the prosecution of all corruption cases. Corruption cases must be dispensed with in a specific period of time,” he said. (Nigerian Tribune)