Africa’s biggest economy faces “financial challenges” that have affected her expenditure, minister of finance says.
Africa’s largest economy is borrowing money to pay salaries as it struggles through a “difficult cash shortage” brought on by fall in oil prices, Nigeria’s finance minister uncovered.
This sad news was revealed as Nigeria prepares to welcome a new government at the end of this month and the country’s naira currency remains in a mess, swinging between 180 and 220 naira to the US dollar. It was trading at 160 a few months ago.
The coordinating minister of the economy Ngozi Okonjo-Iweala tried to be upbeat in a speech on Tuesday after lawmakers approved the 2015 budget – which was revised three times because of halved oil prices that provide 80 percent of Nigerian government’s revenue
She revealed that “revenue challenges” had prohibited the release of any funds for capital expenditure this year but that food prices and single-digit inflation remained quite stable. And she said the economy still was on course to grow 4.8 percent this year.
“We have front-loaded the borrowing programme to manage the cash crunch,” Okonjo-Iweala told lawmakers.
“Out of the 882 billion naira budgetary provision for borrowing, the government has borrowed 473 billion naira to meet up with recurrent expenditure, including salaries and overheads.”
That is really a sad news for the incoming government of President-elect Muhammadu Buhari, who will over on May 29 from incumbent president Goodluck Jonathan.
Buhari acknowledges that constricted revenue and endemic corruption threaten his will to deliver on development and reconstruction of areas devastated by a nearly 6-year-old rebel uprising in the northeast.
He says his fight against corruption should produce the money needed to bring change to a country where oil proceeds benefit a small clique while the majority of the 170 million people in Africa’s most populous nation live hand to mouth.
Critics and observers blame the financial crisis partly on the electioneering, which was termed as the most expensive though no one knows how much exactly politicians from both sides spent during their campaigns.