Expert (Ubani) Decries Nigeria’s High Debt Profile

Kehinde Emmanuel, Ilorin

The Managing Consultant, BVL Investment Trust Ltd; Mr. Ubani Uchechukwu Ubani, has decried Nigeria’s high debt profile.

He stated that it is imperative to address the challenge.

In an interview on Sunday, Ubani who is Chief Examiner for The Chartered Institute of Bankers of Nigeria (CIBN); former Chief Inspector, Capital Bank International Plc now merged into Access Bank Plc during 2005 consolidation, and former Managing Director/Chief Executive Officer, Peniel Microfinance Bank Ltd, said it will be counter-productive for Nigeria to continue to borrow especially for consumption.

He stated that his two new books: Breaking the Shackles of Poverty: Foundation and Building Blocks for Lasting Wealth; and Internal Controls in practice: Armour against frauds, business and financial failure; could provide guidelines to solving some financial and business challenges of the country, corporate organisations and even business concerns of individuals.

Ubani said, “When a man is living beyond his means of income, the person will keep on borrowing to remain alive or devise means of earning more revenue. In fact, as at end of 2020, Debt Management Office (DMO), reports that Nigeria’s revenue to debt ratio appears to be the worst in the world. Its revenue ratio stands at 10.39% out of its total public debt of about N32.9 trillion.

“This figure has increased to N38.005 trillion or $92.626billion as at the end of Quarter 3 of 2021.

“In fact, as at May, 2021, the Federal Government of Nigeria had spent N1.8 trillion on debt servicing in the first five months of the year, representing about 98% of total revenue generated within the same period.

What this 98% implies is that for every 100 Naira earned, we spent N98.00 on debt servicing; leaving only 2kobo for the running of the Government and you will agree this is impossible. That is why borrowing will continue to rise, thereby worsening Naira devaluation and inflation in the economy as well as the poverty situation of the citizenry.

“My problem is not that we are borrowing but that we are borrowing for consumption and not for productive or capital projects that we can see and would yield revenue for the economy or that can pay back itself. All these are predicated on the oil revenue. That is why our foreign reserves will not rise because as the foreign reserves are coming in, we are using them to service the debt we have borrowed. If we continue with the present trajectory, the future looks very bleak. In fact, the future of the generations yet unborn is being mortgaged by this current practice of consistent borrowing without adequate revenue or adequate income-generating projects that will pay back those loans.”

He added, “My book: ‘Internal Control in Practice: Armour against Frauds, Business, and Financial Failure; is situated within the financial services industry whose services can be regarded as the lifeblood of the economy. Their services are built around money and this is what everybody is looking for and some people are ready to get this money by all means. That is where fraud comes in.

“If you look at the preface to the book, I wrote that “a vehicle without good steering and braking systems lacks control and would, for certain, crash. The consequence would be serious harm/damages to lives and property”. That is what has happened to our nation Nigeria because it is being handled without good steering and braking systems. Most times, lives are lost and the vehicle might become a write-off. God will not allow it. Nigeria will not be a write-off. In the same vein, business organisations or Nations without effective internal control systems along with strong proactive risk management processes in place are like moving vehicles without steering and braking systems; and they are disasters waiting to happen.

“If the principles that have been enunciated in this book are applied, both in the private and public sectors of the economy, we will be able to control the magnitude of fraud and corruption. But with proper control, management, and monitoring, some of those frauds and corruption can be nipped in the bud with the right tone from the top. Whether in the private sector or the public sector, if the head is rotten, the body will ultimately be rotten but if the head is sound, it will send out the right message and actions and everybody within the system will imbibe the habit of integrity or practice of monitoring and be able to safeguard the assets of the company or the nation.

“The book is aimed at curtailing fraudulent activities and making businesses run safely and profitably, thereby perpetuating the productivity of the economy.

“Why I wrote the book: Breaking the Shackles of Poverty: Foundation and Building Blocks for Lasting Wealth, is because I discovered from personal experience that no matter how much somebody earns, no matter the circumstances of your birth if you are determined and disciplined and you are ready to make necessary sacrifices, you can build wealth from ground zero to the top.

“While many people are poor today is simply because of a lack of discipline, to discover the information that will liberate them from poverty. People are very lazy in reading or searching for information and some people will search the information but lack the discipline to apply the information.

“In this book, there is a place I said, that for you to make effective use of the information provided in this book, there is a formula that has been provided. It is information plus action equal to wealth. So the essence of this book is to arm people with relevant information that will liberate them from poverty if they are willing to apply these pieces of information. These are universal principles. Everybody that has followed these principles or patterns has always come out of poverty into wealth. A principle can only work for somebody that applies it. And you cannot apply what you do not know. So there is a need for people to be disciplined and determined and be willing to apply or make use of available information to save them from poverty.”

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