IS NIGERIA 'BROKE', CASH-STRAPPED, INSOLVENT OR WHAT?




 
In the last couple of weeks I have heard various complaints from different quarters which are troubling. The first shots came from the States. On more than two occasions, the State Commissioners of Finance came back from Abuja without Collecting money from the Federation account. The monthly FAAC meetings were aborted or abandoned. I understand that the commissioners were protesting that the Federal Government was owing them and that they were not putting all the money to be shared on the table. I have watched some Governors on the Television complaining bitterly.
 Just as we thought that the matter was being resolved, we began to hear other stories, indicating that We are having challenges with funding our budget and meeting our cash commitments. And I am wondering what is the matter. As far as I know we have been selling our crude oil above the budgeted benchmark price per barrel.Certainly not less than 90 dollars per barrel. I am also not aware of any major disruptions to oil drilling or export. Yes we have heard several Lamentations of oil theft and all that but are we saying that the theft is such that our National Budgetted income is grossly threatened. If that were so, then a National Emergency should have long been established.
 Recently, I was confronted with the reality that some MDAs are finding it difficult to fund their capital budget and that some are currently unable to even reach 50% of their budget, essentially due to inadequate cash backing by the Budget office. A few days ago, I saw the Hon Minister of Finance before the National Assembly, defending these matters. She admitted that there is a shortfall in National income but that the releases had been steady,higher than many were claiming .She denied that any money was missing in the excess crude account though that story has persisted in the media.
 I am worried because across the States and even within the Federal Ministries, Departments and Agencies(MDAs),there are loud complaints that the Budget office is not releasing money. Consequent on that,Contractors and suppliers all over are crying that they are not being paid and a number are stalling work or threatening to pull out of sites. Even in some States, Salaries are being owed and everybody seems to be blaming the federal ministry of Finance and it's budget office. How come we are in this situation which has the potential to slow down the economy. Yet release from the Ministry of Finance indicates that 1.01 Trillion naira has been released as capital budget( 400 Billion in Q1, 200 Billion in Q2, 250 Billion in Q3 and now 160 Billion in this Q4) and that 72.3% of the releases have been utilised by the MDAs leaving about 229 Billion unspent at end of Q3. Nevertheless the total releases so far falls short of the Budget at about 65%( 1.01T vs 1.59 T).

  It is convenient to blame the Budget office. But is it really their fault? I hate to think that the money is in the Central Bank and the Minister  and the director of Budget are sitting on it and starving the State Governments and the MDAs. Why would they do that ? What benefit would they derive? Does it give them joy to be accused,abused and harassed by the State Governors, the National Assembly and even by fellow ministers and officers of the Central government.
 First, there is so much misinformation and disinformation floating around, some trumped up by the National Assembly and given vent by the Media, which many times act as Robots regurgitating statements and data which are unverified. A few days ago, I read a headline in a National Newspaper that 500 Billion Naira was missing from the SURE-P funds. The newspaper quoted the Chairman of a Senate Committee as the source of the information. The Senator was said to have said that according to the NNPC, about 800B had accrued from the Subsidy savings since last year but that the Chairman of the SURE-P Committee said that only 300 billion had been remitted to it. On the basis of this, a Senator of the Federal Republic announced to Nigerians that 500 billion Naira was missing. And the media carried it verbatim, some as headline, without asking any questions or even doing any analysis.
  A few days earlier another story was in the media credited to the same Senator and his adhoc committee that the SURE-P programme was a failure. Why? Because the Minister of Works failed to show up at the National Assembly to explain how the SURE-P money allocated to projects under his ministry had been used. I am at a loss to understand why the fact that a minister of Works did not honour the invitation to meet with the Senate Adhoc committee translates to the fact that the SURE-P has failed. This assertion is made more ridiculous by the fact that the SURE - P Committee had appeared before this same Senate Committee to account for how all SURE-P monies, including those for projects under the Ministry of Works have been utilised up to date. I do not hold brief for the Works Ministry nor do I support any official of Government not responding to invitations by the Senate Committee but these alarmist and unfounded declarations can not be justified.
 When we raise false alarms of missing monies too frequently, two things happen. One is that, it gives the wrong impression of our Country and worsens our ranking in the Corruption Perception Index (CPI) and two, readers begin to ignore such declarations and may lead to their ignoring the correct stories, because they have difficulty in knowing which alarm is correct and which one is a hoax. There have been many such alarms in the past and nothing seems to have eventually come out of them.Take the example of the false alarm that 500 Billion SURE-P money was missing. How could this be? First is that the Senator knows that all expenditure by the Federal government is appropriated by the National Assembly. If he checks the record, he will find that the total appropriation in 2012 and 2013 for SURE-P will be in the range of 300 billion naira, which is in sync with the statement allegedly made by the Chairman of the SURE-P Committee. Infact the maximum accruable to the Federal Govt each year is 180 billion naira and for two years since the programme began would be a maximum of 360 billion naira, though there were shortfalls in 2012, because the programme started late.
 Second is that the Senator ought to know and if he had forgotten ought to have been reminded by an informed media that the SUBDIDY SAVINGs are shared by the three tiers of Government. The Federal governments share is about 41% or so while the other tiers receive the balance of about 59% or so. If therefore 800 billion naira is the Subsidy savings, then the Federal Government's portion will be around 300 billion naira and the balance 500 billion naira or so will have gone to States and Local governments. So the missing money will be in the coffers of the 36 States, plus Abuja and the 774 LGAs. And yet the headline news that 500 billion naira is missing has been beamed to the whole world. An informed press would have been asking the States and Local  Governments to declare how they are utilising the bigger portion of the Sudsidy savings, just as the Federal Government has been making efforts to account for its portion. It is worse that this lack of understanding still exists after the Federal Ministry of Finance recently published the account of the August distribution of the Subsidy savings in the media.

If we must fight corruption and if we ever intend to win, we must separate facts from fiction. Our Media should stop over sensationalisation of Corruption, because it is not yielding any good result. Rather, it assaults the psyche of the ordinary Nigerian who often believes these stories and begins to wonder why he must keep working hard and keeping straight while 500 billion has 'disappeared' into some people's pockets. There is so much Corruption in Nigeria and I believe we must expose and fight corruption. But for the fight to be meaningful and to yield the expected result, we must not just dramatise or sensationalise every accusation or declaration, We should carry out preliminary enquiries and reviews before being parties to circulating false information that only glamorises corruption, makes us look worse than we truly are and worsens our global image and our competitiveness, including our ability to attract investments. If 500 billion naira can just disappear, then anything can disappear in  Nigeria.
  But for me, the real critical issue in all these stories about our being 'broke' or cash- strapped is that it truly exposes the risk our Country is running by fully depending on the sale of crude oil to fund our budget. If we are in dire straits just because of sudden or temporary short falls in production or sales of crude petroleum, I shudder to think of what will happen if there is a prolonged shortfall. Yes we have experienced the burst of the bubble more than once and it seems  that we have learnt nothing or are not taking appropriate strategic decisions and actions fast enough to avert this impending 'doom'. America has found shale oil and has become a major oil producing Country, drastically reducing its reliance on imported fossil fuels. And America is Nigeria's biggest importer of crude oil! Soon, America will be exporting oil and Energy. On top of that Many African Countries have found crude oil and gas in their territories, thereby increasing global supplies, with potential for a supply glut and the crashing of prices soon. Again Asia especially China and the other importers of our crude oil are aggressively seeking cleaner energy and soon their demand for fossil fuels will decline. The signs are ominous. It may be more strategic for us to declare a state of Emergency now on diversifying our economy, than blaming the Minister of Finance or Director of Budget alone. The diversification of our Economy though being led by the Government must be driven by the Private Sector but we are certainly moving too slowly. We can be 'BROKE' now or CASH-STRAPPED but we may eventually become INSOLVENT  and that would be really terrible, except that there may no longer be any 500 Billion Naira that will disappear or be declared missing in fact. It would only be fiction!
 
                           Mazi Sam Ohuabunwa OFR

Comments

  1. Sir,thank you for this write up. Yes Nigeria is corrupt but there are positive visible signs in the fight against corruption but to some people nothing is been done. The problem with some of our legislators is that of nothing is good syndrome, lack of love for the nation and intellectual laziness in search of truth.They say what ordinary Nigerians want to hear ,which is mis leading and not the truth .. Their stock in trade sells because of support from the media who are on their pay roles and do not take time to investigate these claims before rushing to press.These acts do not in any way help our cause as a nation. On the diversification of the economy from oil,this is the only way to go for the survival of the nation.

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