Only in America can you have this magic: annointed as the richest country, as the wealthiest country, and the most indebted country (by amount), at the same time! Yes, “The US Treasury Department announced on Monday that it expects to borrow $776 billion in the fourth quarter of 2023, a record high for the period and a 35% increase from the same quarter last year.”
The borrowing estimate is $271 billion higher than what the Treasury projected in August, when it expected to borrow $505 billion in the fourth quarter. The Treasury said that the increase is mainly due to higher outlays and lower receipts than anticipated, as well as changes in cash balance assumptions.
The Treasury also said that it expects to end the quarter with a cash balance of $800 billion, which is the level that it considers sufficient to meet its operational needs and potential contingencies. The cash balance at the end of September was $433 billion.
Remember, the World Bank, IMF, etc will preach to Nigeria and most other countries to avoid debts. They are correct because while the US is borrowing at home, Nigeria and most others go offshore.
In an Igbo novel (Uwadiegwu), the man dropped a great hint: when you borrow, go to your kinsman so that if the debt goes bad, he may lock you up but at the same time he would be expected to take care of your family since he is your kinsman! Indeed, debt- pains are lesser when the debt is localized.
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America borrows at home and can order more machines to print dollars. But Nigeria has to EARN US dollars by selling something someone else values. Magically, that changes every Nigeria’s policy equation because earning (sales, tax, etc) is the only way to pay the debts!
Friends come and go, but you live with your kinsmen, the axiom says. In other words, make peace with them, because who knows when the next debt will become due. If Nigerian banking is big, Naira will have great cousins and kinsmen as the debts will be wholly localized.
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