During last spring meeting of the World Bank in Washington DC, our Minister of Finance, Dr. Mansur Muhtar, told Nigerian journalists at a press briefing that the country may resort to external borrowing as a result of the knock-on effect the financial global meltdown has had on the global economy including, of course, ours.

            “We have a financial gap,” he said according to The Punch (April 29), “and we must look for ways to bridge the gap. If we can get resources that will not be harmful, there is nothing wrong with accessing these resources. And there are lots of resources being made available now at zero interest rates.”

            The necessity for external borrowing, he reportedly said, would raise Nigeria’s external debt stock from the current 3.2 billion dollars to 3.75 billion by the end of the year.

            The question is, is external borrowing really necessary for us to balance our budget when we have been repeatedly reminded all these years that we have huge external reserves, in spite of the over 12 billion dollars we paid out of it about four years ago to secure what many, including this reporter, said was a dubious debt relief from the Paris Club of creditors?

            If the answer seems obvious it is because the question is merely rhetorical. As an Igbo proverb says, he who lives by the river should not wash his face with spittle. To go a-borrowing when we have huge external reserves sounds to me like worse than washing our collective face with spittle.

            In any case it seems strange to me that we should resort to external borrowing so soon after all the wonderful things former senior officials of the Federal Government, from the middle ranks all the way to former president, Olusegun Obasanjo, claimed our exit from the Paris Club would do to our economy. Not least among such claims was that it would make Nigeria free from external debt for ever.

            Of course every sensible person knew that this was a gross exaggeration, to put it mildly. After all, Paris Club member-countries were not Nigeria’s only creditors, big as their loans to us were. There were other multilateral creditors like the World Bank. There were also private creditors, including banks, whose debts are handled by the London Club.

            All this did not, of course, stop Obasanjo and his lieutenants from claiming that the exit from Paris Club would make us permanently debt free. According to the boss himself in a remark during a visit to Aso Presidential Villa by the Organised Private Sector on July 15, 2005 to congratulate him for securing the debt relief, it has, he said, removed “the burden of debt on Nigerians today and in the future”.

            Dr. Muhtar, himself, then as Director-General of the Debt Management Office, spoke in a similar vein. “It makes good sense,” he said in an article in Thisday of July 30, 2005, “to use those reserves (i.e. our external reserves) to secure a PERMANENT exit from the debt trap.” (Emphasis mine).

            Muhtar’s comment was in response to an article by Mr. Chu Okongwu in Thisday of July 25, in which Okongwu said the celebrations over the debt relief were “both myopic and a strategic blunder.”

            Muhtar was, of course, not alone in disagreeing with Okongwu who was a minister of finance in the regime of military president, General Ibrahim Babangida.

            Muhtar’s immediate boss at the time, Dr. Ngozi Okonjo-Iweala, as finance minister, also vigorously defended the celebrations which were triggered by a special broadcast by the president on June 30, 2005, on the debt relief.

            If Muhtar and Okonjo-Iweala were content with merely defending the exit, there were others who went on the offensive. Among them was Mr. Sanusi Lamido Sanusi, the Managing Director and Chief Executive Officer of First Bank, but at that time one of its executive directors.

            “One wonders,” he said, “why it is that Babangida’s supporters are not happy that we are paying off the debt.” We should, he said, pay it “even if it means emptying the reserve before the locusts return for a second helping.”

            If it was wise to have used our reserves to settle our external debts as both Muhtar and Sanusi said, why is it now foolish to use the same reserve to balance our budget? Not that the minister of finance has said so. It is clear, however, that this is the meaning of his warning that we may soon resort to external borrowing.

            Our foreign reserves are not the only source available for funding our needs. There is the balance from what has since become the practice of “benchmarking” our petro-dollar earnings at a level lower than the going global market price for the purpose of budgeting, ostensibly as a precaution against price instability. The public has never been told what has happened to the difference.

            Any government that lays claim to the level of accountability and transparency that President Umaru Yar’adua’s does should have since stopped this dubious practice of “benchmarking.” It is not too late for it to do so. If it does, there would be no need for the country to go a-borrowing to balance its budget.

            Taking loans is, of course, not necessarily a bad thing, so long as they are used judiciously. Trouble is, the history of Nigeria’s debt shows they have hardly ever been so used. Instead they have largely been misapplied or even out rightly stolen. Worse, those debts have been used by crooks in and out of government to create spurious debts that are used to further deplete our treasure.

            No, Mr. Honourable Minister. After all the promises of a debt-free economy that Obasanjo and your good self, among others, told us our exit from Paris Club debt would turn our country into only four years ago, it is too soon to go a-borrowing – that is, if it is ever necessary to borrow. We should never forget the old saw about the sorrows that invariably afflicts the fellow who goes a-borrowing instead of cutting his coat according to his clothe.