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A MINUTE OF THOUGHT ON OUR RISING DEBT PROFILE(1)

We all have seen where people, usually poor people, are being hassled for debt they owe. They run from their house, hide from it. Get scared whenever they hear someone coming. They turn-off their phones and live like ghosts all in an attempt to hide from their creditors. Such scenes make owing debts seem like a very unfortunate predicament that brings shame and humiliation, stripping the individual of all dignity. It’s hard which is more indignifying between begging and owing.

Like I noted earlier, this is usually common among poor debtors. Not that rich people do not owe debt, actually, they owe even more, staggering amounts. You know what they say, big man big trouble. I don’t know how well this applies in debt. A person who commands a minimal level of wealth or affluence may be hassled by banks or Police or have their properties foreclosed. But at a higher level up the ladder of fame and affluence, you see that people on that pedestrian are “pampered” for their debits. They go on and accumulate so much debt and when things become dire, government even comes to their rescue by bailing them out with supply of funds. No drama, no shame. It’s almost as if the wealthier a person is, the more indifferent they are to owing debt. Apparently, the shame and embarrassment that comes upon the poor debtor is not (also) accorded to the rich one.

People used to say that there is a curse that follows people who borrow money from Banks. They say no matter how hard the individual tries, they are usually unable to pay up the loan and its interests, thereby losing their property which was used as collateral to foreclosure. Not to undermine the potency of curses, but different factors undermine the viability of a business(idea), more especially in our Nigerian environment. And when these factors come into play, they undermine the take-off or success of the business(idea), thereby leading to its struggle or eventual collapse. Hence the owner’s inability to pay up the loan borrowed for its set-up.

A report by AMCON(Asset Management Corporation of Nigeria) says that just 350 Nigerians owe the company 4.3 trillion of its 5.4 trillion debt. Some time ago, the Central bank of Nigeria released the names of the country’s highest debtors and the list was shocking as it featured the names and companies of very reputable people in our society. People may have thought that the wealth of these affluent people comes from profits and success, not knowing, they are living off borrowed money.

Not just individuals owe, companies, governments (LGs, States, Federal) all incur debts too. Regardless, a debit is a debt and is an embarrassment to the debtor, or should be whether the debtor is an individual, a company, a state or a country.

Most states in Nigerian owe staggering debts, if not all and as the country, our debt profile is monumental. And as a continent, it’s even more so. Like I already said, it seems the higher the debt, the more indifferent the debtors are, or seem to it.

Practically, debt means cutting into funds from your future. With the reckless abandon our Nigerian states and federal govt accumulate debt, one would wonder what would be left to spend and enjoy in the future if we mortgage all of its funds today. Currently, 24% our national budget goes into debt servicing. And ironically, the budget is running on deficit already, ie, we are going to borrow to run our costs and borrow to pay our debts too. In 2017, 2.014 trillion was voted for debt servicing. This year, 2.01 trillion of the 9.12 trillion in the national budget is to go to debt servicing.

One would then wonder when the vicious cycle of indebtedness would end, both for our country and our continent. In the event we become a progressive nation, a portion of our progress would be sunk into paying up the debts amassed over the years. This one fact has kept Nigeria and most African countries in an unprogressive rut.

A pop-star Bono of the U2 fame in the 90s was moved by the poverty, hunger and famine that plagued and still plagues some African countries. In the benevolence of his heart, he rallied his rich friends round and they organized concerts to raise funds to aid the impoverished and dying Africans. Is effort was a great success as at some point he was able to raise $200 million. A staggering amount in today’s world, more so in the 90s. Yet, even after the money was expended(judiciously), the poverty, hunger and feminine remained. A little research revealed that these African countries cough out amount that same amount in debt repayment in one week only. This led Bono to begin his debt cancellation campaign which has achieved great success since it began. But with African countries(and debt), it seems “great success” is hardly enough.

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1 thought on “A MINUTE OF THOUGHT ON OUR RISING DEBT PROFILE(1)”

  1. Nice observation, Many don’t know that 89% of Access bank total assets were financed with people’s money and 88% of First bank total assets were financed with people’s money.

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