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Nigeria’s high debt profile is mortgaging the future of the nation – Prof. Awodun



Nigeria’s high debt profile  is mortgaging the future of the nation – Prof. Awodun

Prof. Murtala Awodun

Prof. Muritala Awodun is the Chief Operating Officer, CSDC Consulting Enterprise Solutions, (Global Revenue Consultant to Ekiti and Ondo States,) a Professor of Business and Entrepreneurship, and Director, Centre for Enterprise and Human Capital Development, Crown-Hill University, Eiyenkorin, Kwara State, Nigeria. He analyses financial and labour matters in this interview with STANLEY JOHN. Excerpts:

People have cried out against the high debt profile of Nigeria as a result of the humongous amount of loans accessed by the President Muhammadu Buhari’s administration…..

(cuts in) What we are doing by acquiring loans upon loans, debt upon debts, is more or less selling the future of this nation. Or put in a better way, we are making it extremely difficult for the next government to be able to do anything meaningful. This is because of the magnitude of debt that is being acquired now, and the fact that some of these debts, if not all of them, have some moratorium. Those monies are being acquired and utilized and are probably not due for repayment. By the time they will be due for payback, this government would have been gone and it will be the headache of the next government and they will be struggling for how to pay back those debts and at the same time, looking for money to manage the nation. So it is going to be tough and challenging for those who will come after this government because the magnitude of debt is just alarming. And what is the reason for it? Because we do not really have experts in charge of the economy of Nigeria; that is just it. So you go for the easiest way, if I do not know how to make money and there is an avenue for me to borrow money, it is easier for me to just take that money. All I need is that money. I can do whatever I want to do with it since I am not going to be the one to pay back, whoever comes after me will be the one to pay back so I worry less about the fact that I have taken that easy option. It is better that rather than trying to rack my brain on how to ensure that I turn the resources or say raw gold into gold that will bring money. It is a lot of hard work to turn the resources into money. For instance, to make the manufacturing sector to work, is a lot of hard-work. So all those things that can groom and grow the economy are not as easy as just borrowing money. It is just like saying that the government is just using the easy way to run the government. And that is what will put the future government into a lot of trouble.

So what should be done to address this looming danger?

There is nothing that the government can do. The government is not even ready to do otherwise. The government has chosen that path and nobody can bring them back from it. They need money, they borrow money either from the domestic or the foreign sources. That is the path they have chosen. So if the people in charge of the nation have chosen a particular path; they are the ones in charge democratically for now. They are not ready to look at any other option than that option because all other options are a bit difficult, particularly at this time. Nigeria is such that we have enjoyed benevolence: oil price going up, it is not that we are the ones that are making it to go up, and then we squander the money, we don’t save for the rainy days. Oil price is down, we do not know what to do because the oil price is down, so we borrow money. It is just an easy way that those who have been governing Nigeria are adopting. Nobody is actually interested in sitting down and fashioning out strategies that will make the nation work.

Is tax or internally generated revenue (IGR) collection in Nigeria effective?

With my experience, as a former Chairman of the Kwara State Internal Revenue Service and from the fact that I was a member of the Joint Tax Board for four years, it is very obvious to me that the process of tax collection in Nigeria, whether at the federal, state or local government levels is completely inefficient.

This is arising from the fact that, I x-rayed a particular state, which is Kwara . I looked at the inefficiencies and ways of turning them around to improve on the efficiency within the limit of what the political and institutional arrangement can allow. It is obvious that there are still some major things that the political and institutional arrangements are still holding onto that are making it inefficient. So, if you look at that, you will understand what I am saying.

At the local government level, you can’t say the level of efficiency is 10 percent; at the state level on the average, you can say the level of efficiency is 30 percent and at the federal level, the efficiency level is not even up to 50 percent. So if you look at it from that perspective, obviously what one will sum up is that the level of efficiency of tax collection in Nigeria is nothing to write home about.

I can back my submission with evidence. I can justify my position based on facts and figures released by the various authorities. The National Bureau of Statistics releases figures as given to them by the various internal revenue services and the federal authorities also submit them to the Joint Tax Board and they are passed on to them. If you look at what the states are churning out and statistics relating the states on other matters that should nose-dive into revenue for the state, my position will be clear.

As an academic, all of those figures make sense to me in research form. That is part of what pushed us into trying to help Kwara at that time. It was based on the study which showed that Kwara can do better than what it had. The study showed that Kwara can collect IGR of N5bn monthly when they were collecting N500m and N600m monthly. Everybody would want to see how it would be done and we proved how it can be done, by moving it from that amount to N3bn monthly before we left in 2019. What I did for them was that in 10 years, they can move to N5bn. This is based on statistics: what is the population of the state? What is the working population of the state? What can you consider as the average tax that should accrue from an individual, using the lowest mark, and then when you look at that compared to what the state is generating, then you will know that they are far from it. This includes Lagos State, Rivers State, in fact all states. It is not like one state is far better. Everybody will think that Lagos State is doing very well but Lagos State is not doing 50 percent of what it can do. But because there are so many companies that are concentrated in Lagos and by the time they face the remittances of those companies, in terms of Pay-AS-You-Earn Tax, it will be so much money. But that does not mean that they are as efficient as they should be. But compared to where they are coming from, it is a significant improvement. Just like say, compare to where Kwara came from, what you have is a significant improvement. But in terms of whether they are where they should be, the answer is: no.

For instance in Lagos, if you look at the informal sector alone, what should accrue to the state government as national income tax from the informal sector is as much as what the state is generating presently on a monthly basis. But they do not even know how to go about it because there are political considerations in tackling that kind of issue. The informal sector is a concentration of 80 to 90 percent of the residents. So in tackling that large populace, there are so many considerations that will come up. So they will rather concentrate on the few high net worth individuals, and companies and then they will have their peace. That is the way it is practiced in all the states of the federation.

What then are the challenges of effective tax or IGR collections by the government?

It is the general problem of our nation. A lot of things have gone wrong and institutions have been badly affected by those things that have gone wrong. So to correct them is always a battle. For you to get the leadership that will be able to say, “I want to face this battle and face it headlong is always a problem. Everybody will rather manage the situation and just give it a kid-glove kind of approach because the moment they start doing it the way they should do and there is noise that can topple or distort the flow of things or the statusquo, you will see from the top that there will be intervention such that you can not be able to go ahead and do what you want to do appropriately. So that willpower to go all the way, is not there at the federal, state, and local government levels. There are systemic problems and these systemic problems are the things that need to be handled. If we must turn things around, all of us must have to agree on what to do. Many states may not do that because of so many political considerations that may come up and nobody wants to disrupt the follow of peace, particularly this period of insecurity. So you can prove it that this is how to go about this and this is what the result will be but what you should do to achieve it, are you willing to do it? That is the problem.

Nigeria has been witnessing series of strikes especially in the health and educational sectors, does this not portend danger for Nigeria?

It portends more than danger. The Academic Staff Union of Universities (ASUU) was on strike for many months and it appeared that the government was not looking at their side. When they called off the strike, the government did not even attend to their needs. Also, some personnel in the health sector have engaged on strike upon strike.

It should not be like that, particularly when you look at the reason for the strikes, which is based on the previous agreement reached by the government and the unions and the government not keeping its side of the agreement. It calls for questioning that ‘Is the government even sincere in wanting us to have the economy move smoothly.’ Because how can I sit down with you, agree with you on something and then put timelines to it, I go back to do what I am supposed to do, you are supposed to do your own side of the bargain and you take it for granted and do not do it. So, that more or less, you are asking me that I am a fool. For those people to prove that they are not fools, they come back to say, ‘you did not honor our agreement so we will have to bulge that agreement’ and then the strike starts. It is like a breach of contract because when you sat down with them, it would have been better for you to have told them that we can not do it than for you to agree, and then mid-way you bring them back to the same thing. And it has been a repeated pattern for governments in Nigeria. The government also does not honor agreements with these unions.

I am not a supporter of the national strike but a situation where they go on strike and you call them, sit down with them, agree with them, you sign a Memorandum of Understanding with them, you will pay them this or that, you will provide this and that, and you sign as a government and then you renege on that agreement. What are we really preaching to even the younger ones that are looking up to us? Are we telling them that government is larger than life? That is the aspect that is painful to me more than any other thing.

So what should have government done?

It is better for govt during negotiation to insist on what it can do and what it can not do than for it to agree and renege. It is like deceiving them back to work. When government deceives them, they will get to discover later because it is obvious that government did not want to do it.

Since we were in the university as students, there had been strikes upon strikes. And it is still the same pattern. They will come together, agree on say 10 things, the government will fulfill one or two and say they will do the remaining ones later, then the lecturers will go back to school only for them to come back again, maybe a year or two, and say they have not honored some of those things. If the government knew it was not going to fulfill also the agreements, why did it then agree to do them?

Supposing the government found it difficult to fulfill all the promises?

If the government found it difficult to fulfill some of those agreements, must government wait for them to go on strike before it calls them for another negotiation? Government should have called them back for another round of negotiation, acknowledge that it made the agreement but that it is unable to fulfill all the agreements because of some reasons. At this time, they are not on strike but you just want them to know that you are unable to fulfill some of these agreements and then ask them for amendments of the agreement. Must you wait for them to go on strike before you now start calling them again, when in the first instance you are the one that agreed with them?

It shows that we do not even respect ourselves. Unfortunately, members of the government negotiating teams are professionals in their field. Look at the resident doctors’ strike, the Minister for Labour, Dr. Chris Ngige, is a medical doctor; the Minister of Health, Dr. Osagie Ehanire is a medical doctor; also the Minister of State for Health, Dr. Olorunnimbe Mamora, is also a medical doctor. These are professionals and they know that what the medical personnel is asking for is not out of place. Being in government, why is it difficult for them to convince their people in government who now are their colleagues that these things should be done? And if it not possible, why is it difficult for them to call their colleagues (medical professionals) together and say, ‘look, this thing will not be possible? Don’t let us deceive ourselves, government does not have the capacity to to do this and this. These are the things that are possible. So I do not want us to come back and go forth, so you will know the truth. Why is it always difficult for us to put the truth on the table? Government should be transparent enough for them to go and check the records. It is better for the government to agree on what it can do rather than deceiving itself by signing an MoU and renege, more so, this time that the health should be a critical factor. It is painful and we do not have good health facilities in the first instance to now get the attention of those professionals to even advise you and attend to you. We are now making it even worse.

Officials, from Saudi Arabia, a few weeks ago, came to Abuja and started the process of recruiting doctors in Nigeria……

(cuts in) It is just that this particular one was publicised. Doctors have been leaving this country in droves. And they will continue to leave. Even those who are not doctors are leaving this country in droves and they will continue to leave because of the high level of insecurity, poor infrastructure, and welfare of the people. So the fact that Saudi Arabia came to Nigeria to do the recruitment is because they wanted it to be cheap for them for the recruitment. It is cheaper for them to come here, do the interview, get the things they want to have, and ask the doctors to go before coming over. It was like a mass recruitment, particularly when our government is also taking the doctors for granted. It is a free world, nobody can stop another person from working somewhere else.

We are even regretting why we did not allow some of people who wanted to go abroad for work sometime. I have a last born of my mother who is like a son to me. I trained him and he became a medical doctor. He wanted to go abroad to work about five years ago and I told him, “if all of you are running away, who will remain here to fix Nigeria?” And that is the reason he did not go. Today, he is asking me, “Are you happy for me now with all that is happening?” He has his Post-graduate qualification. He probably would have been better off there but for the patriotic zeal in some of us that kept us here in Nigeria, that did not make us to leave Nigeria when we should have left the country. I still believe that some people must stay to fix this country. The little we were able to do when we had the opportunity at the KWIRS is an evidence that when given the opportunity, we can turn things around in this country. Things can be turned around in the various sectors of this country if the right people are put in the right places and the leaders give them the support.

This exodus of professionals to other countries, will it not affect Nigeria’s development?

It is not as if people are just moving out of the country now. People have been moving out of the country for years and they will still continue to move. Even when we thought the country was better than what it is today, people left this country. When I finished my university education in 1989/1990, I know my mates that were not waiting for any other thing than to just leave the country. Some did not even wait to serve, they left and have remained there doing well for themselves. A lot of people have that ambition and a lot of people still have that ambition to leave this country because things are not working. But that still does not mean that the rest that will remain can not do something to salvage Nigeria. Particularly if we can get governance right, Nigeria will be better. Enough of people who lack ideas ruling us. Enough of it! It is better for us to give to the ones that have ideas of how to do certain things to do it. Those who can fix this country, let them be given the opportunity to fix this country. If it is fixed, it is in the interest of everybody. But if we hold onto it until it gets destroyed, then it is to the detriment of everybody as well.

  1. With all the challenges, some doctors had an opportunity to be recruited by the Saudi Arabia official yet security agencies disrupted the exercise. How do you view that disruption?

It is just over-zealousness because in the first instance, security agencies if they thought that what the Saudi officials were doing was not right, they would not have allowed it in the first instance. And if they have reason to disrupt them, that is still not going to stop them from going outside this country. It can only delay the process. The same government that wants to recruit them, if truly they want to recruit them, they will make it open online and people will apply and they will do a virtual interview for them and they will grant them visas and appointment and they will leave this country. There is nothing anybody can do. It is a virtual world now. We have a high level of unemployment. That is why one will suspect that the government does not care.

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Nigeria’s high debt profile  is mortgaging the future of the nation – Prof. Awodun

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