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Economy

Financial Crisis: Nigerians Speak on FG’s Decision to Print N60bn

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By Adedapo Adesanya

Reactions have started to trail reports that the federal government printed N60 billion to share to states and local governments to support the payment of salaries and others in March 2021 as the country could no longer generate enough revenue to sustain its huge expenses.

Last week, the Edo State Governor, Mr Godwin Obaseki, while speaking at a meeting with the state’s Transition Committee in Benin City, had stated that the financial crisis in Nigeria was getting worsen, noting that the nation could no longer rely on global oil prices because major oil-producing companies were now investing in alternative sources of energy.

“Nigeria has changed. The economy of Nigeria is not the same again whether we like it or not. Since the civil war, we have been managing, saying money is not our problem as long as we are pumping crude oil every day,” he had said.

“So, we have run a very strange economy and a strange presidential system where the local, state and federal governments, at the end of the month, go and earn a salary. We are the only country in the world that does that.

“Everywhere else, government rely on the people to produce taxes and that is what they use to run the local government, state and the federation.

“But with the way we run Nigeria, the country can go to sleep. At the end of the month, we just go to Abuja, collect money and we come back to spend. We are in trouble, huge financial trouble.

“The current price of crude oil is only a mirage. The major oil companies who are the ones producing are no longer investing much in oil. Shell is pulling out of Nigeria and Chevron is now one of the world’s largest investors in alternative fuel. So, in another year or so, where will we find this money that we go to share in Abuja?” he had queried.

He had further disclosed that things got worse last month when the federal government mandated the Central Bank of Nigeria (CBN) to print N60 billion to share to states and local governments as the revenue generated in February 2021 was not enough to disburse to the tiers of government.

The revelation sparked outrage from Nigerians who warned that this would further compound the problem facing the nation which includes inflation, high unemployment, insecurity, and a weak economy that recently came out of a recession.

Reactions

The spokesman of the Central Bank of Nigeria (CBN), Mr Osita Nwanisobi, has said that he was not aware that the CBN printed N60 billion for the Federal Government of Nigeria.

In his words, “I am not aware of that (N60 billion printed by the government).”

In the same vein, the Federal Ministry of Finance, Budget and National Planning said questions on the matter should be directed to Governor Obaseki.

On Twitter, a user with the handle @OtunMori drew a comparison with the South American nation of Venezuela saying, ”Venezuela started like this. If Nigeria keeps Buhari more than necessary, the inflation would surpass Venezuela. It is so disastrous. With high unemployment, disaster looms.”

Another user – @Kentaloguess added, “it has entered the last critical stage welcome to super hyperinflation, Nigerians know that this is one of the big reasons inflation will not go down but  keep increasing in the coming months and years because the money printer is in town.”

As for @KolaEDUN3, he posited that, “We are printing money to give away without backing it with strong productivity. Productivity has to match the value of goods and services. But do we have the industrial output statistics? The excess money supply will further erode the Naira purchasing power & inflate assets prices.”

Another via @BlueAng28345209 noted that, “The time is now that state should control their resources. Enough of political stupidity and mediocrity. Ondo State has bitumen, cocoa, fertile lands, tourism sites etc all untapped because of lack of vision, unwillingness and corruption.”

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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