Federal Government borrows money to pay workers’ salaries……as cash crunch bites harder

Nigeria, Africa’s biggest economy is borrowing money to pay salaries as it struggles through a “difficult cash
crunch” period — brought on by dwindling oil revenue, Nigeria’s Finance Minister, Dr. Ngozi Okonjo-Iweala, has revealed.
The news came as Nigeria prepares to welcome a new government at the end of the month and the country’s Naira currency remains in a slump, hovering between 180 and 220 Naira to the US dollar. It was trading at N160 a few months back.
Okonjo-Iweala, who is also the Coordinating Minister of the Nigerian Economy, tried to be upbeat in a speech on Tuesday after lawmakers approved the 2015 budget, which has been revised three times because of slashed oil prices that provide 80 per cent of revenue for the government of Africa’s biggest petroleum producer.
She said: “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. Adding that the economy was still on course to grow 4.8 per cent 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,” she said.
That is bad news for the incoming government of President-elect Muhammadu Buhari, who takes over on May 29, from incumbent Goodluck Jonathan.
Buhari acknowledges that constricted revenue and endemic corruption threaten his will to deliver on national development and reconstruction of areas devastated by the nearly 6-year-old terrorist Boko Haram uprising in the North-East of the country.
He says his fight against corruption should produce the money needed to bring changes to a country where oil proceeds benefit only a small clique while the majority of the about 170 million people in Africa’s most populous nation live from hand-to-mouth in abject poverty.
Critics blame the financial crisis in part on the most expensive elections ever held in Nigeria, although no one knows how much politicians from both sides spent during their campaigns.
Meanwhile, the outgoing President’s men have produced evidence of corruption by the PDP’s National Working Committee’s (NWC) members.
Some of the President’s associates have released documentary evidence that members of the National Working Committee of the People’s Democratic Party (PDP) stole funds belonging to the party’s treasury shortly after President Jonathan lost the presidential election on March 28, 2015.
Two close associates who spoke to our sources revealed what one of them described as “shameless stealing of party funds by officials entrusted with running the affairs of the party.”
The sources disclosed that President Jonathan felt betrayed by the “greedy actions” of the NWC members, who shelled out over a quarter of a billion naira in unexplained fees to themselves on April 8, 2015.
The monies, which were paid out of the party’s Zenith Bank account revealed that the party’s NWC members were paid various sums of money ranging from N30 million to N100 million through the bank.
Presidency sources stated that the NWC members contributed in a large measure to the defeat of President Jonathan, as they were more interested in pursuing their private material interests than the party’s corporate interest. “They were too busy helping themselves to party funds as President Jonathan’s campaign suffered,” the source said.
In a fierce rebuttal, several of the NWC members told our sources that President Jonathan was the architect of his own failure.
“He was the person running the country, not members of the NWC. If Nigerians turned against him, it’s not because of anything the NWC did or didn’t do,” one member said.
Another NWC member accused the president and his closest associates of operating the president’s multi-billion dollar campaign by using structures outside the party.
One member of the NWC accused President Jonathan of planning to hijack the party in order to place his loyalists in place in anticipation of running for office again in 2019.
The NWC member accused a governor in one of the South-South states of leading the plot to remove the Muazu-led NWC.
“We are determined to ensure that nobody can just pocket a party that many eminent Nigerians contributed to establish,” one NWC source vowed.
Before going to press, the PDP Publicity Secretary, Olisa Metuh, told our sources that the payments cited were made to assist NWC members for the governorship and states’ house of assembly elections. He clarified that the party’s secretariat funded these elections. He also revealed that the NWC had not been paid their housing allowances for two years.
Another member of the NWC reacted to the allegations angrily saying that since the Presidency was more concerned about transparency, the Presidency Campaign Council should publish how it gave out N700 million to each state and most importantly how the Presidency spent Nigerian resources in the last six years.