Monsters that are called Loans

September 22, 2012

It is very difficult to contribute to discussions on the implications of the loans which the Federal Government said it has been sealing in recent times. This is because loans in themselves are not the evils that are waiting to happen but our experiences are full disappointments and outrage over the management of loans taken by governments in the past for supposedly public good but which did no good and that should guide any rational analysis.

 

Yes we can say politicians are preparing for elections and there must be a rash of loans that government must disburse. But what were the juntas preparing for when they were in power that made them go for wasteful loans? And what lessons must we learn from the nature of current overall management of the economy which seems so much like management of currency, regardless that we parade very senior experts in that sector?

 

Maybe we really have to go to the fundamentals of a liberalised industry to make any meaningful analysis of the loans specifically for the communication technology sector. $100million is such a huge amount that officials should be  willing, infact anxious, to explain the benefits derivable to the citizens even if only to buy their goodwill. But a take-it-or-leave-it attitude is not only undemocratic, it should be unacceptable. That is where the recent $100million Chinese loan purportedly being taken for ‘Galaxy Backbone Project’ belongs, until it is explained.

 

 

Lest we get caught unawares, this kind of loans are what is required to commence a reversal of the little progress that Nigeria made in telecommunications in the past two decades. In fact if government starts to directly construct telecommunication infrastructure again after all the debacle of NITEL, then it is this particular government that is bringing that policy summersault to the communication technology industry  since it was liberalised.

 

THE MISSING LINK, Sir Maitland’s Report of 1985 which recommended Full Liberalisation of the telecommunications sector of developing economies as panacea for closing the gap between the poor and the rich of the world did not leave much room for incompetent implementation of its recommendations. It said emphatically that poor countries that desired to migrate into prosperity had to liberalise faithfully and competently.

 

Sir Donald Maitland’s insight on the subject was recognised and exploited by ITU at a time when almost half the world’s inhabitants lived in countries with less than one telephone line per 100 people. The Report kick-started the growth of information and communication technologies (ICT) as we know them today.

 

To date, all countries which migrated into prosperity, or are about to do so, are those which implemented the recommendations as prescribed by the Report (also popularly called Maitland Report). Nigeria, not being one of them, however implemented a favourable flavour of Liberalisation which allowed her to manoeuvre if and whenever the vicissitudes of corruption demanded. Nigeria is at that signpost now. By professing Liberalisation and working towards it, Nigeria moved faster than several other poor countries by doing very well in providing mobile telephony. But that is where the good story ends.

 

The recommendations situate growth of telecommunication within the private sector. What it did not say is that it could also apply to other sectors of the economy because it regarded telecommunications as central to the economy and it needs no saying that a success achieved in telecommunications can be repeated for other sectors.

 

It is the half hearted implementation that did not enable Nigeria to repeat what it has achieved in telecommunications industry in other sectors. And the fact of what politicians (and ‘militicians’ before them) see as the blow on corruption that makes full liberalisation detestable in the energy sector. And officials go about deceiving our people with meaningless models that they falsely call privatisation.

 

Industrial growth is about world trade and economics. It is about packaging and managing loans. A bulk of these loans is usually thought out by those who offer them in un-liberalised markets while it is usually thought out by the beneficiaries in liberalised environments. It becomes bogus and monstrous when Nigeria permits other countries to determine the loans that its economy needs.

 

We will not quarrel with using foreign loans for true development but not when the process is managed as if our own economic managers prefer to continue to manage our currency when their counterparts are managing the economies of their countries.

 

The most stunning is that the bodies and organisations, professional and trade associations, that should be asking questions for the government to answer are not doing so. Everybody seems complacent and dumb.

 

Meaning that a people, indeed, get the government they deserve.

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