[The Presidential Blog]: Dear DMO, please DPMO

I was going to start by saying “it appears that these people do not get it”. But then as I typed the words and read them myself, I realised that “it doesn’t appear”. They just do not get it.

If they did, the Presidency through the Finance ministry’s DMO – Debt Management Office – wouldn’t have released this statement in an attempt to “address the borrowing of $29.9 billion that was just shut down by the Senate.

Let’s go back to the beginning shall we? So the President informed us of his plan to seek Senate approval for the borrowing of $29.9 billion external debt last week. No, not all the pockets of unverifiable amounts we are borrowing from the AfDB and the other ones. An additional debt profile to what we already have on ground.

Why, you ask? Because we need infrastructure now. Or have you not heard?

We are in a recession and the only way to come out of it is to invest in capital infrastructure …say yeah yeah! Same story. At least this time, no one went on and on about phantom diversification of the economy.

You’ll be pressed, as we were, to ask what we have actually put in place by way of infrastructure since all of this began. What progress report do we have – other than the promise that we’ll still be expending half of our budget on recurrent expenditure in 2017 – to justify our collective approval of this additional loan.

Anyway, so on Tuesday, the Senate did us proud by throwing out this request. But what was even more beautiful about the denial was the reason the Senate gave for throwing out the letter of approval.

The Senate spokesperson – citing an instance where a letter promised they’d “find attached” but there were no attachments – says that the request was sent without necessary details.

His comment, I bet was just putting it mildly because the Presidency promised to fix up and present the request again.

Part of the effort to fix up, I believe was the benevolence of the DMO’s statement addressing the release. The full statement is on the Aso Rock facebook page. It quotes the DG of the DMO, Dr. Abraham Nwankwo, from a TV show where he tried to explain why taking the said loan is important.

The kind DG went to lengths to explain the term of the loan, if granted (3 years to be repaid in 20 to 30 years) at a head-scratching interest rate of 1.5 percent (yes, 1.5). To intensify the confusion about how the interest rate would be that low, the DG cited the fact that our Paris Club debts came with floating interest rates of 18 percent.

On why we need the loans, he stated that “when you are in this kind of economic situation, you have to decide where you want to start addressing the problem. You then come to the conclusion that the most critical point to start is to deal with infrastructure problem. If you deal with infrastructure problem, the cost of power will be lower, the cost of transportation will be lower, and the cost of most other services will be lower.”

For him (and all of us too, I must add), tackling infrastructure deficit would force down costs of goods and services on the long run, explaining that the development will have a significant impact on the price level in the economy.

But that’s the thing. That’s not what we are asking. I like to know, for one: what are the measures that the Federal Government has taken internally to generate funds before realising: “oh this won’t be enough, we need to borrow some more”. Where are the salaries that have been cut down and the benefits and bonuses that have been coughed up or donated towards this noble cause of finally tackling our infrastructure deficit?

Maybe I am not being fair here. The “Federal Ministry of Other” has been reported to have spent only NGN 312.5 billion as at the end of October -just a little over the highest spending named Ministry of Power that spent NGN 209.3 billion within the same period.

Well done. Who knows how much the Ministry of Other must have been spending before the recession of all the other capital infrastructure. Great job guys!

Another aspect where we’ve been too hard on the Federal Government is demanding too much information about the intelligence they’ve gathered on how the 29.9 billion dollar loan will be expended to improve infrastructure. After all, a break down of the specifics of these capital infrastructure projects is highly confidential information. Won’t want to ruin the surprise that will all be unveiled at the end of the 3-year spending period.

Which why all the DG could reveal about how the $30 billion will be spent is that $10bn will be spent per annum for three years and will be targeted at building infrastructure in all states of the federation, and the main focus will be on power generation, rail and road renovation and construction. All very novel sectors where no one in the Presidency can actually say for sure how much will be required to build what. Quite understandable.

Don’t forget the fact that $29.9 billion can change to $30 billion anytime. It doesn’t matter. When we borrow $29.9 billion, Nigerians will donate the remaining.

Just because- we have a Debt Management Office that just doesn’t get it.

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