Debt: Nigeria Fiscal Situation Worse Today As Governors Struggle To Win Buhari’s Heart For Budget Support


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: Edo State Governor Started A Controversy On Nigeria’s Debt

 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’’.

Hajia Ahmed: Minister Of Finance: Described Obaseki’s Comments On Nigeria’s Debts As Sad

  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.

Emefiele: CBN Governor: Unhappy With Obaseki’s Recent Remarks About Printing Money

  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.

Gov.Wike : State Can Survive Without Bail Out Funds From The FG

 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.  

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