Amalgamation Day in Lagos, 1914

Amalgamation Day in Lagos, 1914

01 November, 2012

Debt and the "Maintenance Culture"


I had a conversation with a citizen from one of our states. Initially, he effusively praised the state's current governor for his "pro-people" policies. He was particularly appreciative because this governor had embarked on an expansive road-building and road-rehabilitating programme.

He hailed from a town that has had exactly zero tarred roads from the beginning of time till now.  The governor's roads programme is connecting his home town essentially to the federal republic's network of tarred roads generally, and will specifically cut travel times to the nearest large towns and cities.

He also likes his state governor because of his governor's announced "free" education policy. Per this policy, the governor promised to extend the pre-existing "free" education programme, which covered primary schools and junior secondary schools, to include senior secondary schools and state-owned universities; state indigenes attending universities located in the state but not owned by the state will be included in the free education programme via scholarships in its second phase (non-indigenes would still have to pay to attend the state's-owned universities). As I understand it, university students will be expected to pay back a portion of the "free" tuition/room/board/bursary/etc after they graduate and get jobs.

The governor also announced a commitment to eventually providing "free" healthcare to all indigenes of the state, while simultaneously making the state a "health tourism" destination for Nigerians from other states.

Like other state governors, his state governor has embarked on a massive construction programme, to build hospitals in each local government area, to build new universities, to build .... other things.


These things, he told me, speaking continuously without pause, not letting me get a word in.


When he was finished, I asked him how his state governor intended to pay for these things.


He started ... laughing.


In fact, he laughed for a good long time. As his laughter subsided to a combination of grins and chuckles, he told me he didn't think his state government could afford it, that he had noticed that other states that are much richer than his state were finding it impossible to pay for similar-sized construction binges .... and that he though his state governor was duping the contractors.

Apparently, his state governor has not paid the contractors for their work, and has insisted he will not pay them until the work is complete and he (the governor) inspects their work to make sure it isn't the usual wuru-wuru job contractors do to maximize the amount of profit they make from projects. So the contractors are borrowing to finance their work, on the presumption that once they are finished, they will get paid.

What this friend of mine said is he thinks when the projects are completed, the governor will not be able to pay the contractors, and that he suspects the governor knows this, and that this is the real reason he has a policy of not paying them until the projects are finished.

Let me say I do not think his governor is duping the contractors.  Let me go further and say that I do nothing it will be possible for his governor to avoid making payment, even if he wanted to. The contractors borrowed a lot of money and are not just going to go away quietly if they are not paid.  His governor has presidential ambitions, and our political system is built on patron-client networks and relationships that must be sustained with fiscal transfers, be they illegal (i.e. "corruption) or legal (e.g. "contracts" awarded to the politically favoured).  If he doesn't pay, they will turn on him and he won't return as state governor, much less make any kind of run at the presidency.

Having said that, if the governor decides to run in 2015, he might do what other governors have done which is leave office before the bills come due, sticking his gubernatorial successor with huge bills and an empty treasury.  This has been a frequent pattern in the Fourth Republic.

But this conversation highlights a problem I have with supposedly "pro-people" policies.  Over the decades, our governments at all three tiers have tended to do a lot of things, even positive-seeming things, in an unsustainable way.  We praise them when they do it, as it is usually something we rather desperately need, but it is always done in such a way that the benefits of it don't last. In some cases, over the decades, the benefits didn't last beyond the day the project is commissioned.

It is not just a question of poor construction of infrastructure, which falls apart long before it should, but one of funding the infrastructure construction in such a way as to have nothing left with which to maintain it.  To put it in a simplistic sort of way, the Federal and State governments have racked up enormous amounts of debts in the Fourth Republic, a lot of it to do things that the public might actually approve of it the public were given a chance to vote on it. Unfortunately, in the years to come the Federal and State governments are going to be struggling to repay a lot of this debt, probably not all of it, and whatever funds would otherwise have gone to maintenance will go to service the debts that brought the infrastructure into existence.

And so we will watch, as always, as expensively-built infrastructure wither way.


The Surulere National Stadium in Lagos, and for that matter the Abuja National Stadium, are emblematic in this regard.  We spent a lot, and I mean a lot of money to build (Abuja) or refurbish (Lagos) these two stadia, but there was subsequently nothing in the way of making the stadia financially self-supporting and nothing in the way of governmental funding to sustain maintenance in the absence of commercial self-support.  Those are beautiful, iconic facilities, or at least they used to be. What a waste! We keep having to cough up ever-larger sums of money to do "rescue missions" on the National Stadium in Surulere when the Nigerian government decides to host a major sporting competition, and each time we just let that money flush away once the tournament is over.

A lot of people in my acquaintance's home state love their governor because of his "free" education policies, but you know and I know that it is not sustainable. Even in the short-term, quality will fall as the state struggles to find money from somewhere else to cover whatever has been lost in the way of fees that were not sufficient to begin with.  What has happened in the past is teachers and professors invent "fees" of one kind or another outside of the normal school fees, to make up for lost funds, and the government begins to be slower in replacing fixed infrastructure like desks as it struggles to pay for all the different things (education being just one) that are now "free".

Even the part where the university students have to repay the funds. When I first arrived in the USA for university education, one of my nearby neighbours was a Nigerian professor who had been educated abroad at the expense of the Nigerian government decades ago on the understanding that he would come back to Nigeria to work once he graduated. He never went back and he never repaid the money, and that is true of a lot of other people (a minority to be fair) living abroad.

In the case of my friend's home state, what is likely to happen is an appeal (if the governor in the future is amenable) or a protest (if he or she is not) against making the students repay the loans, given the scarcity of jobs and the low level of pay received by students who are lucky to get jobs. Perfectly kind and reasonable arguments will be made (e.g. when they should be thinking about how to support their family or start one of their own on a "small" salary, they are having to repay their loans), and a lot of genuinely nice citizens will feel genuinely sympathetic. Besides, the truth about politics in Nigeria and in the rest of the world is politicians know that giving people things for free brings in votes, even if nothing on Earth is actually "free".  For the same reasons that the current governor has made education "free", the future governor will magnanimously forgive the students their debts, after all, it isn't coming out of his pocket and the state can always go into more debt.

Look, you probably think I am a wicked person for opposing "free" social services. It is quite the contrary. The people who are today praising this governor because he is building roads everywhere will be the same people in the future who start complaining about the lack of "maintenance culture" and the "Nigerian Factor" when a future government cannot maintain those roads and potholes start swallowing the coal-tar.

If we want things to be permanent, we have to do things in a sustainably permanent way.  This is something we innately understand, which is why any number of community improvement unions and self-help organizations levy funds for projects (as opposed to borrowing) and/or make members pay back what is lent (in the case of micro-credit self-help associations).

And for the record, this is not just a Nigeria-specific problem. Everywhere you go in the world, it seems politics revolves around politicians promising to do things that cost a lot of money, for free (as in not making the people pay for it).  Every week it seems, there are massive demonstrations somewhere in the world to demand that the governments give people things without the people having to pay for it. And governments, both from the so-called right-wing and the so-called left-wing, compete to see who can give the most free stuff to the most key constituencies necessary for their particular faction to win an election.

And you know what?  Even in those supposedly "richer" places, eventually they come up against the reality that nothing is free ....

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