Buhari Govt Secretly Admits Printing N60billion, Says Nigeria Facing Hard Times, Blame State Governors
Zainab Ahmed, Nigeria’s Minister of Finance, Budget, and National Planning, admitted on Monday that the country’s economy is in trouble, adding that states must increase their internally produced revenues.
According to Ahmed, who reported this in an interview on the Nigerian Television Authority’s Good Morning Nigeria daily breakfast show, the money shared at the March Federation Account Allocation Committee fell short of N50 billion.
The minister was responding to a backlash sparked by Edo State Governor Godwin Obaseki’s allegation that the Central Bank of Nigeria printed N60 billion in March to supplement the money distributed at the March FAAC.
Last week, however, the minister and the governor of the Central Bank of Nigeria (CBN) both dismissed Obaseki’s argument.
The finance minister reported in an interview on NTA on Monday that the country’s economy was stabilizing since the country exited the recession a few months ago.
“These are very tough challenging times because revenues are low and demand for spending is very strong understandably because we have to keep intervening to ensure that the pandemic is controlled as well as the economic damage it has caused,” she said.
“In Nigeria, the drop in crude oil prices hit us hard in terms of income. We have very low sales and extremely high expenses. So far, what we’ve done is provide some continuity by ensuring that wages and pensions are paid on a monthly basis, that funds are sent to the judiciary and legislature, and that debt service obligations are met.
“That’s exactly what we’re doing. It also means that we have had to borrow more money than we had expected before the COVID-19 began, in order to continue investing in infrastructure with our national budget. We borrowed to fund key projects such as roads, rail, airports, seaports, and a variety of other investments in health and education, as well as to improve our people’s social standards and quality of life. Nigeria is not alone in this regard, as several countries around the world have experienced economic downturns.
“Almost every other country has had to borrow more money than it had budgeted for. It means that our deficit grew at a rapid pace in 2020. We believe that 2021 will be a year of recovery.”
According to him, the government aims for a three percent growth rate in 2021, while some multilateral organizations estimate it at 2.5 percent.
“It’s a very tough time,” she said. I can tell you how challenging it is, not just for the federal government but also for the states. We are seeing the declines in our FAAC revenues; FAAC revenues are the monthly totals that we compile from the NNPC (Nigerian National Petroleum Corporation), the FIRS (Federal Inland Revenue Service), and all other revenue collection agencies from both the oil and non-oil sectors.
“ So, FAAC decreases, and once FAAC decreases, it is a very difficult situation, and over the last year, we have tried to fall back on certain particular accounts that are supposed to be saved; savings that, in such a situation, you fall back on and augment.
“As a result, we take funds based on Mr President’s approval, either from the Excess Crude or Stabilisation Accounts, or in some situations, from LNG (Liquefied Natural Gas) dividends. We had an FAAC shortfall of around N50 billion in March; we didn’t have enough accrued in all of those accounts except for some N8.5 billion from the exchange rate differential account, which we applied to the FAAC of N605 billion.
“An average FAAC that is safe for us is N650 billion, so we had a N50 billion shortfall. To be frank, the states wanted us to go to the central bank and borrow money to supplement FAAC.”
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