Published On: Sat, Jul 15th, 2017

Revamping an economy through legacy debt settlement

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President Muhammadu Buhari and his men in power have always told whoever cared to listen about the parlousness of the nation’s economy when they took over a little over two years ago.
Undoubtedly, most Nigerians were aware that the immediate past administration of ex-President Goodluck Jonathan was only trudging on, postponing the evil days. Therefore, the defeat he suffered and the ease with which he surrendered power, even without waiting for the official announcement by the electoral umpire, merely indicated that he was already overwhelmed with state affairs.
On several occasions, the then Minister of Finance, Ngozi Okonjo-Iweala, had cried stringently on the need for the country to save for the rainy days. The nation was then about to break under the weight of local debts.
Though Jonathan made efforts to heed the advise by establishing the Sovereign Wealth Fund (SWF), his efforts were thwarted by the governors under the aegis of the Nigeria Governors’Forum (NGF). The NGF had then insisted that keeping an excess crude accounts was illegal and as such all monies must be shared. On the SWF, the governors maintained that the rains were already there then and that there was no need to invest the funds in the excess crude accounts.
The consequence of the inability of the former administrations to save has now come to stare the Buhari’s administration in the face making the nation economy to slid into ‘avoidable’ recess.
Of all measures taken by the government, the latest move to settle the N2.7 trillion negotiated legacy debt seems to be the most appropriate because it is geared towards the empowerment of the citizenry. It’s one direct attempt to put money into the people’s pockets. Those age long and forgotten debts owed contractors, oil marketers, power generation and distribution companies, employees of Federal Government parastatals and agencies, historical judgement debts as well as refunds due to State governments amongst others would finally be settled, though in phases.
Economists are unanimous in their submissions that the country has hitherto become somewhat unattractive to both local and foreign investors due to its notorious debt profile. Many local and foreign contractors have begun to foot-drag in project delivery, even when effectively mobilized, because of the fear that they may not be fully settled at completion.
The government’s resolve to complete outstanding projects and award only contracts that could be readily cash-backed has helped in restoring investors confidence and this is very critical in its determination to rescue the economy from the precipice.
Modalities for the settlement of the debts have been worked out pending the approval of the National Assembly. Promissory notes are to be issued to contractors with debt issuance to raise cash to fund promotional salary and pension liabilities.
The renewed value placed on the government workforce by prioritizing their welfare and settling all outstanding arrears in allowances, pensions and gratuities would go a long way in reconditioning their attitude to work and help in the delivery of the change campaign.
Some banks currently suffocating under cash squeeze owing to the introduction of Treasury Single Account (TSA) would now have a lease of life as funds released into the system would finally end in their coffers. A large number of contractors debt were the causes of the non performing loans (NPLs) which had crumbled several financial institutions in the country. The settlement of the legacy debt will help, in no small measure, to improve stability and increase the capacity of the banking sector to lend to their customers.
Resolving long outstanding obligations to oil marketers, electricity distribution and generation companies, will help address some of the financing constraints that these key sectors have been complaining about.

Addressing political hyenas, jackals in the polity
When the cat travels, the homestead becomes a playground for the rats, so says a popular Yoruba adage. On arrival of the cat, those ubiquitous rats take cover. This seems to explain the metaphor released by the Wife of the President, Aisha Buhari, recently. Hajia Buhari had said “God has answered the prayers of the weaker animals.
The Hyenas and the Jackals will soon be sent out of the kingdom. We strongly believe in the prayers and support of the weaker animals”.
Her metaphorical assertion was a direct response to Senator Shehu Sanni’s proverb in a tweet pasted on his wall where he likened President Muhammadu Buhari to a lion on a journey for whom prayers for his return have waned with lesser animals forming cabals ‘scheming and whispering to each other, doubting whether the Lion King will come back or not’.
According Sanni, it is the wish of the Hyenas and the Jackals that the Lion King never wakes up or come back so that they can be kings. ‘’It is the prayers of the weak animals that the Lion King comes back to save the kingdom from the Hyenas, the wolves and other predators,’’ he said.
Aisha’s response to Sani’s proverb is an indication that something is amiss in Buhari’s administration with some of his key officials working at cross purposes. Before then, there have been insinuations that the administration may have been hijacked by a ‘cabal’.
But the gladdening news from the metaphor was that the ‘King’ would soon arrive to carry out the necessary cleansing of the stable in order to place those pretenders where they actually belong.
Aside this, the President may have begun to take steps in addressing the hyenas and jackals in his government by his latest meeting with his Vice, now Acting President, Yemi Osinbajo, in London.
Osinbajo’s journey to keep date with his boss was kept away from the public until when he probably landed in London. The reason for this strategy has yet to be explained. Casual observers reason that the journey was wrapped in secrecy because certain people in government were not supposed to know.
Although the real kernels of their discussions were not disclosed, there are indications that Buhari must have given necessary instructions to his deputy on how to sanitize the political firmament pending his eventual arrival any moment from now.
Political watchers are currently on the look-out for fresh and deft political moves from Osinbajo in the next few days/weeks to signal the implementation of the latest instruction from his boss.
Nevertheless, Nigerians still continue their fervent prayers for God to heal the President so that he could return to complete his mission of salvaging the country and return power to the people.

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