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By Stephen Ubanna
The era when President Muhammadu Buhari, a retired army General, could bail out the states in times of budget difficulty is over. This is because the Katsina born Nigerian President and his two key economic Managers, Hajia Zainab Ahmed, minister of Finance, Budget and National Planning and Godwin Emefiefele, governor of the Central Bank of Nigeria, CBN, may have taken the decision to withdraw support from the state governments to force them to sit up.
The trio are not happy that the governors who ought to work with the Administration are effectively criticising it of throwing the country into huge debt burden without showing any sign of repayment. Indeed, the duo, Hajia Zainab, and Emefiele, may have spoken the mind of the Nigerian President, who has just returned from his over two weeks medical vacation in the United Kingdom, Uk. They had described Godwn Obaseki, the governor of Edo state’s recent emotional outburst that the Nigerian economy is is in trouble because of its huge debt as a blatant lies.
Obaseki, had raised an alarm penultimate week that Nigeria’s economy has shown signs of imminent collapse because of its huge debt, noting that the Buhari Administration had printed an additional sum of between N50 billion to N60 billion ‘’to top up the state allocations to be shared at the Federal Allocation Committee, FAAC, March , 2021, meeting’’.
He may have hit hard at the All Progressive Congress, APC, government, led by Buhari when he said that the Administration will throw the country into a deepening debt profile of between of N15 trn to N16 trn by the end of 2023 by sharing borrowed funds.
The governor may have alluded to the May 29, 2015, claims of the Party when the Transition Committee set up by the Nigerian President who was then awaiting in the wings o take over from the former President Goodluck Jonathan , who had lost the 2015, Presidential election. The Transition Committee had accused the Jonathan’s Administration of leaving the country with an unsettled debts of N50 billion.
Hajia Amed had, said that there was nothing wrong with the alleged huge debt s as claimed by Obaseki, aDemocratic Party, PDP, governor, because it still falls within the ‘’sustainable limit of the country’’. She maintained that Nigerians have nothing’’ to worry about it because it is 23% of the country’s Gross Domestic Product, GDP’’.
The minister may have dismissed Obaseki’s claims that it was borrowed funds that are usually disbursed by the government to be shared at FAAC, meeting by the three levels of government, Federal , states and the Local government Areas . According to her, ‘’it was revenue that are generated by the Federal Inland Revenue Services, FIRS, Nigerian Customs Service, NCS, and the octopus, the Nigerian National Petroleum Corporation , NNPC, that are disbursed at the FAAC, monthly meetings for sharing by the three levels of government.
An aggrieved Hajia Ahmed who could not hide her feelings had said that’’ the issue raised by the Edo state governor was not a fact’’. What we distribute at FAAC is a ‘’revenue generated by FIRS, Customs and NNPC, noting that ‘’ it is a public information’’. The PDP, governor of Edo state, who believes that he is more knowledgeable than Hajia Ahmed on issues that had to do with the Fiscal policy management has advised the minister ‘’to rally round Nigerians to stem the obvious fiscal slide facing the country’’. ‘’Nigeria has changed. The economy of Nigeria would never be the same again whether we like it or not’’, he had said.
He disclosed that since the end of the civil war and now, the country have been managing. He may have alluded to the claims of Yakubu Gowon, a retired army General and a former military Head of State who had said that ‘’ money is not our problem as long as we are pumping crude oil every day’’, an indications that the country is going though hard times because of failed implementation of the government Fiscal policies in the past and now.
Following on the foot step of the minister of Finance, Budget and National Planning, to speak on the alleged printing of N50 billion to N60 billion to make up for the states short fall allocations in the month of March 2021, Emefiele who was forced to open up at Tunga, Awe Local government Area of Nassarawa L state had said that ‘’printing money is a key mandate of the Central Bank’’. He has justified the alleged printing of money on the ground that ‘’the Bank must always act to support the government at times of financial difficulties’’. He had said that the country’s fiscal situation is ‘’worse today’’.
He may have introduced a dimension to the concept of printing money in Bankers lexcon, describing it as’ lending of money’. The CBN, governor who may want the likes of Obaseki to know that it is part of the CBN, job to print money. He noted that the printing of money must not be seen as ‘’if we are going to the factory , printing naira and distributing on the streets’’.
He recalled that between 2015 and 2016, when the country faced the same bad fiscal situation , the government had provided a budget support facility to all the 36 states of the Federation, stating that the loans remain unpaid till date.
Despite the Controversy surrounding the alleged printing of N50 billion or N60billion to support the states shortfall allocation in the month of March, 2021, Emefiefele had said that what the Nigerian Central Bank has done was basically expected of it to support the government He stated that it is not different from what most other countries Central Bank could have done to their home governments when confronted by not only health-care crisis from the Asian country of China emerged coronavirus, popular COVID 19 or economic crisis.
He opined that’’ it would be irresponsible on the part of the apex Bank of any country to stand idle and refuse to support their home government at this time’’. ‘’Whatever the CBN, has done is not different from what obtains in other countries’’, he had said.
The Nigerian Bureau of Statics, NBS, may have may have made matters worse for the states by exposing their weak financial bases which is informed by their weak monthly Internally Generated Revenue, IGR. The NBS, has highlighted the various states 29020 IGR, which was below N1.2trn.
Notwithstanding the states monthly poor IGR, as exemplified in their 2020 general IGR Collections, the CBN , has vowed to recover the ‘’printed money or money that was granted to the states between 2015 and 2016.
There are indications that the Bank and the Revenue Mobilisation and Allocation and Finance Commission, RMAFC, have made all the necessary arrangements on how to recover the loan from the states which runs into billions of naira, from source. This is bad news to the state governments which are hit by the COVID 19 and rising insecurity in the country. The NBS, in report had said that apart from Lagos, the nation’s Commercial nerve centre, Oil Rivers state and the Federal Capital Territory, FCT, thatbecause of its strong IGR, base, others may not, because of their weak IGR, base.
Take for instance, Lagos state was said to have generated about 420 billion, Rivers, N118 billion and the FCT, N92.1 billion in 2020 fiscal year. Edo state under Obaseki, an Investment Banker, who was said to be behind the success of his estranged godfather, Adams Oshiomhole’s Administration in the state and incidentally was a former National Chairman of the APC, was said to have generated about N30 billion .
There is no gainsaying the fact that if the Buhari Administration so decides to turn its back on the states based on the acusations of Obaseki, who had penultimate week said that Nigeria’s economy is running into serious trouble because of crippling debt burden.
This is an indications that Delta, Kaduna, Ogun, Kano, Oyo, Akwa –Ibom, Anambra, Edo, Ondo, Enugu, Osun, Kwara and Plateau and Niger states , will also be in trouble . This may be the lot of Zamfara, Kogi, Imo, Cross-riveer, Abia, Kebbi, Eboyi, Bauchi, Nasarawa, Bayelsa, Sokoto, Borno, Katsina , Benue , Ekiti and Jigawa states. Also,Gombe Adamawa, Taraba and Yobe, may be forced to go cap in hand to the Presidency to beg for funds to survive.
Many believe that the north east states of Gombe, Adamawa, Taraba, Thephilous Danjuma, a retired Arymy Lt.General and former of Defence, during the Administration of Olusegun Obasanjo, a retired army General and Yobe , may not find it easy. The three states IGR, were said to have fallen below N10 billion in 2020. The situation was the same in the south west state of Ekiti and the north central state of Jigawa.
Aware that the 2023, general elections is about 24 months away, may have informed why Buhari, may not want to abandon the states despite pressure from different quarters to do so because he needed the support of the APC governors, particular, who belong to the poverty-stricken states, to mobilise support for the party.
Political Observers believe that there is no way the north east states of Adamawa, Borno , Yobe, which had been under the attack of the Islamic Fundamentalist Group , BokoHaram and the Islamic State of West African Province, ISWAP, and the north west states of Zamfara, Kaduna and Katsina, Buhari , home state, could stand on their own because of the activities of Bandits, which have gradually spread to the south east by finding a base at Eboyi state, from where they could launch attacks in other parts of the region, thus blocking all areas of generating revenue by the state government without the Federal government Budget support to survive.
The Opposition PDP, had said that the Buhari , acting on the advise of Hajia Ahmed and Emefiele, had divided the ranks of the Nigerian Governors Forum, NGF, under the Leadership of Kayode Fayemi, governor of Ekiti state, believed to have a Presidential ambition in the forth coming 2023 , general elections.
Some of the governors were said to have already dissociated themselves , particular, the APC, governors, form the Edo state emotional outburst about the country ‘s rising debt profile to between 15trn and N16,trn by the end of 2023, in order to remain in order to be in the good book of the Nigerian President and get bail- out funds from him whenever demanded.
