Monetary Policy Committee of the CBN recently complained that Nigeria’s debt profile has become something to be worried about
Reports have revealed that Nigeria’s budget deficit has risen to not less than N30.58 trillion within the last seven years of President Muhammadu Buhari’s leadership, which some Nigerians have described as the result of an unprecedented level of incompetence.
This was based on the analysis of data from budget implementation reports for the third and fourth quarters of 2015; the four quarters of 2016, 2017, 2018, 2019, 2020; the first three quarters of 2021; and the first four months of this year.
The data revealed that from 2015 when President Buhari came to power to the first quarter of this year, the present administration has spent not less than N54.98 trillion on budget implementation.
However, it has only financed the spending with N24.39 trillion. This leaves a deficit of N30.58 trillion.
Further breakdown of some of the government expenses showed that within the period under review, the Nigerian government has spent at least N23.66 trillion on personnel costs, pensions, overhead costs, presidential amnesty programme, other service-wide votes, and special interventions.
At least, the sum of N14.13 trillion has been expended on domestic and foreign debt servicing while not less than N10.47 trillion has been pumped into capital expenditure within the period.
The Budget Office reports indicated that the deficit financing has been mainly financed by government borrowing.
According to the budget implementation report for the fourth quarter (Q4) of 2015, in President Buhari’s first year in office, the Federal Government of Nigeria (FGN) arranged to raise short-term credit from the Central Bank of Nigeria (CBN) through the mechanism of Ways and Means subject to a ceiling of 12.5% of the government’s total revenue.
“This amount will be retired and therefore not considered as new borrowing outside the borrowing approved to finance the budget deficit. However, due to current fiscal challenges, the CBN had agreed to increase the Ways and Means advances threshold hence the FGN’s ability to raise N615.96bn from this source.”
Meanwhile, it was discovered that since allowance for raising the ceiling was made, total borrowing from the CBN has risen to the sum of N19.01 trillion as of April this year from N648.26 billion it was in June 2015.
Similarly, the Debt Management Office on June 7 reported that of March this year, Nigeria’s total debt profile rose from N12.12 trillion to N41.06 trillion.
Minister of Finance, Budget & National Planning, Mrs Zainab Ahmed, in a presentation of a document, tagged ‘Public Consultation on the Draft 2023 – 2025 MTFF/FSP’ pointed out that “Revenue generation remains the major fiscal constraint of the federation. The systemic resource mobilization problem has been compounded by recent economic recessions.”
Also, the Monetary Policy Committee of the CBN recently complained that Nigeria’s debt profile has become something to be worried about and that there was a need for urgent diversification of the country’s sources of revenue.
This explains the reasons the country has gone into recession twice, continued to rank high in the world poverty index and continued to slide into one of the most unsafe, terrorised countries.
Unfortunately, despite the daily rise in the inflation rate, deteriorating security situation across the country, especially in the Northern region, the biting poverty and rising life dependency rate due to rising unemployment rate, Zainab Ahmed on Wednesday confirmed that President Buhari approved the sum of about N1.2 billion for neighbouring Niger Republic for the purchase of vehicles to tackle insecurity.
Ahmed, while making the confirmation justified the approval of the funds, saying that providing intervention to the neighbouring Niger Republic is not new and it is the prerogative of President Buhari who made the approval.
SaharaReporters on June 15, 2022, exclusively obtained a document detailing how President Buhari's government procured 10 Toyota Land Cruiser vehicles for officials of the Niger Republic with public funds.
The newspaper described it as yet another shocking revelation of the nefarious activities of the insensitive regime of Buhari which has subjected Nigerians to unnecessary hardship in a report titled ‘EXCLUSIVE: Buhari Regime Spends N1.2Billion On 10 Vehicles For Niger Republic's High-ranking Officials While Nigerians Wallow In Abject Poverty’.
From documents seen by SaharaReporters, the newspaper reported that the Nigerian government, through the Ministry of Finance, Budget and National Planning, approved N1,145,000,000 for the purchase of 10 Toyota Land Cruiser V8 vehicles, for government officials in the Republic of Niger.
The contract was awarded to one Messrs Kaura Motors Nigeria Limited and approved by President Buhari on February 25, 2022.
According to the document sighted by SaharaReporters, the Nigerian government, in order to cover up its fraud, had obtained Due Process Certificate of No Objection from the Bureau of Public Procurement (BPP) to Direct Procurement Method.
The contract was said to be funded from the Ministry of Finance's 2022 Appropriation sum of N282 billion.
The document is titled, “Approval For The Award Of Contract For The Procurement Of Vehicles For The Republic Of Niger For Logistic Support".
It read, “The purpose of this memorandum is to seek Council's ratification of the President's approval for the award of Contract for the Supply and delivery of 10 Toyota Land Cruiser V8 vehicles, for the Republic of Niger, as logistic support, in favour of Messrs Kaura Motors Nigeria Limited, in the sum of N1,145,000,000.00 inclusive of 7.5% VAT, with a delivery period of one week as indicated in the table below:
“2021 Model, V8 Toyota Land Cruiser: Specification: V8 Engine, Automatic Transmission, Alloy Rims, Power Steering, Power Windows, Power Door Locks, Keyless Entry, Air-Conditioner, Push Start, Airbags, High Mount Stop Light, Radio/MP3.
“Three (3) years or 100,000km Warranty. Delivery to Niger Republic, Flight, Logistic, Insurance & Foreign Customs Duties.
“Unit Price (N) N80,600,000.00
Total Amount (AD) (for 10 units) N806,000,000.00
Delivery to Niger Republic, Flight, Logistics, Insurance and Foreign Customs Duties - Unit Price N33,900,000.00 —(10 units) N339,000,000.00
Grand Total-N1,145,000,000.00.
“The Presidency of the Republic of Niger requested for logistic support from the Presidency of the Federal Republic of Nigeria vide letter with Ref. 000104/PRN/DIRCAB, dated 20 January, 2022. A copy of the letter is attached to memorandum as Annex I.
“It is noteworthy that Nigeria and Niger have enjoyed close and long-standing diplomatic relations as captured in several Bilateral Trade and Economic Agreements, as well as various memoranda of understandings (MOUS) ranging from migration and human trafficking, to drug trafficking, and infrastructural development in line with integration policies of ECOWAS.”
Meanwhile, government-owned universities across the country have been completely shut down for over five months since February 14 when members of the Academic Staff Union of Universities (ASUU) embarked on strike over university funding, earned allowances, and other government-reneged agreements.
Ironically, the Nigerian government has maintained that it could not meet the university lecturers’ demands because there is not enough money in the government purse.