To darkly amuse themselves, Nigerians sometimes fantasize about the day the creditor will come to take over the country. They crack jokes about the day the creditor will move in to take over key national assets because of delinquent debts.
When such fantasies as farfetched as they are come to mind, the creditor is usually China, and there have been dark tales to boot about how the Chinese have moved to take over critical national assets they helped finance in some African countries through loans, when those loans have not been repaid as at when due.
Over time, international bodies like the International Monetary Fund and the World Bank who give out loans have come to acquire a dark reputation as undertakers.
In countries, many of them in sub-Saharan Africa, where poverty and failed leadership maintain an asphyxiating grip, a mere mention of these organizations by politicians desperate to acquire political power by all means is usually enough to whip the people into a nationalist frenzy and send the government of the day into a meltdown.
In the modern world of macroeconomics, very few countries can live free of debts, especially external debts. These debts weave into the vortex of international finance and diplomacy that form the basis of the mutual obligations of countries to each other, and is the foundational nucleus of globalization.
A bit of debt here and there is inevitable. But what happens when a country is up to its knees in debts?
An unsustainable model
It is now beyond doubt that no country can work its way through the thicket of development when it cannot stand on its feet because it is bogged down by a mountain of debt.
According to data from both the Debt Management Office and the financial statements from the World Bank, the total debt owed to the World Bank Group by Nigeria rose by $660m in the first six months of 2022.
Also, according to the World Bank` financial statements for the fiscal year 2022, Nigeria owes the lending institution $13.04bn as of June 30,2022.
Also, over the years, the International Bank for Reconstruction and Development and the International Development Association, which make up the World Bank, have advanced loans to Nigeria.
Nigeria`s debt to the IDA and IBRD stood at $12.55bn and $486m respectively as of June 30,2022, compared to $11.97bn and $410.60m in December 2021.
Nigeria`s rising debt has seen the country shoot up one spot up the latest top 10 International Development Association (IDA) borrower`s list.
The latest data shows Nigeria placed as the fourth most indebted country, with a $13 billion debt as of June 30,2022. Last year, Nigeria ranked fifth on the list. But an additional debt stock of $1.3 billion naira within a year has seen it move up to fourth behind India, Bangladesh and Pakistan. Other countries that make up the top ten are Vietnam, Ethiopia, Kenya, Tanzania, Ghana and Uganda.
But just how much debt can a country afford at any point if it is to be counted when a count is taken of countries that are financially healthy?
Since there is hardly any country that can do without borrowing every now and then, what is to be the threshold? Beyond which level must the alarms sound?
In Nigeria as in many other African countries, many years of failed leadership has seen the debt mountain rise with very little to show for it in terms of commensurate development and better lives for citizens. Indeed, that the debt mountain continues to rise in many African countries is itself a telltale sign that many countries are woefully failing at the basics on which to build a better future for all.
For many countries, thieving governments have specialists at borrowing money and siphoning them, leaving even unborn generations to inherit humongous amounts that were not used to create better lives for them in any way.
Like many countries have shown, the day Nigeria will begin to exit the borrowers` list is the day its journey to any form of economic stability whatsoever will truly begin.