Edo State governor, Godwin Obaseki’s call to the Federal Government last week to end what he described as “monetary rascality” is the latest reminder that all is not well with the Nigerian economy, and that behind the scenes, the Federal Government appears to have been cooking the books in its desperation to put a good face on things. Addressing a state transition committee stakeholders’ meeting in Abuja, Governor Obaseki alleged that, at the Federation Account Allocation Committee (FAAC) meeting for March, the Federal Government hastily (and, it would seem, questionably) printed “an additional N50 to N60 billion” to bridge the shortfall in its allocation to states and local government areas (LGAs). In light of this revelation, Governor Obaseki urged the Federal Government to stop “playing the ostrich” and “take urgent steps… so as to prevent the prevailing economic challenge from degenerating further.”
Not unexpectedly, the Federal Government has moved swiftly to deny the governor’s allegation. Speaking to State House correspondents in Abuja, the Minister of Finance, Budget and National Planning, Ms. Zainab Ahmed, described Governor Obaseki’s claim as “untrue.” Although the minister did not deny that the Federal Government had indeed printed additional money, she claimed, implausibly, that the Federal Government had sourced it from revenues from various unspecified government agencies. Central Bank Governor, Godwin Emefiele, also weighed in, dismissing Mr. Obaseki’s allegation as “unfortunate and totally inappropriate.” Yet, his defense seems to have contradicted Ms. Zainab’s, especially as he appears to imply that the monies were indeed distributed, but as loans to be paid back by recipient states.
Said Mr. Emefiele: “If you understand the concept of printing money, it’s about lending money. That’s our job‑to print. It’s about lending money…” Either Ms. Ahmed or Mr. Emefiele is not telling the truth, and after their counter-attack, the public is none the wiser. What cannot be disputed is that the Nigerian economy is in dire straits, and for proof, look no further than a former holder of the office that Mr. Emefiele now occupies. Speaking last week at a roundtable discussion on “Debt Relief for a Green and Inclusive Recovery in Nigeria” organised by the Heinrich Boll Foundation, one-time Central Bank governor Sanusi Lamido Sanusi pointed out that, between 2011 and 2020, the ratio of the country’s external debt to total revenue increased from 8 per cent to 400 per cent. In other words: the country is up to its neck in debt and has been relying on borrowed money to pay its bills. Incidentally, the country’s ballooning debt profile is another issue raised by Governor Godwin Obaseki.
We do concede to Ms. Ahmed and Mr. Emefiele that many countries all over the world are struggling to balance their books after the devastation caused by the Covid-19 pandemic. Nevertheless, the issues raised by Mr. Obaseki, and amply illustrated by Mr. Sanusi, predate the pandemic. The truth of the matter is that the Buhari administration has shown a shocking lack of imagination in its handling of the economy. It would be a different economy if the Federal Government handled it with the speed and decisiveness with which it tends to respond to its critics.
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