President Muhammadu Buhari

Former President
Olusegun Obasanjo recently expressed concern that “Nigeria may be on its way to another crisis of debt overhang if the current fiscal challenge is not creatively addressed.’’
Obasanjo expressed the viewpoint at a conference of the Ibadan School of Government and Public Policy (ISGPP), which has “Getting Government to Work for Development and Democracy in Nigeria: Agenda for Change’’ as its theme.
“If the current fiscal challenge is not creatively addressed, Nigeria may be on its way to another episode of debt overhang which may not be good for the country,’’ he said.
“It will be recalled that a few years ago, we rescued Nigeria from its creditors with a deal in which the Paris Club of sovereign creditors wrote off 18 billion dollars of debt, Africa’s largest debt cancellation,” he added.
He, nonetheless, attributed the critical economic situation to the continuous fall of crude oil prices in the international market.
Observers, however, insist that Obasanjo’s sentiments, which are seemingly alarmist, are not completely misplaced, as the Federal Government has admitted that the N1.84 trillion-deficit out of the N6.08 trillion 2016 budget proposal would be financed via local and foreign borrowing.
All the same, President Muhammadu Buhari tried to allay such fears recently when he said that Nigeria might need not to borrow money to fund the projected budget deficit.
Buhari gave the assurance when he addressed some Nigerians in Addis Ababa, Ethiopia, on the side-lines of the 26th Summit of Heads of State and Government of the African Union (AU).
He said that the money recovered from those who looted public funds would be used to reduce the deficit in the 2016 budget.
He also said that for the first time in recent times, Nigeria’s budget would be largely financed from non-oil revenue.
“Recovered assets of the country would also be used to reduce the budget deficit.
“Besides, the theft of oil by some Nigerians that happen to live there who feel that the oil belongs to them and not the country is an irritating thing for those of us who participated in the civil war for 30 months in which at least 2 million Nigerians were killed,’’ he said.
Buhari said that the proposed budget would focus on increasing efficiency and transparency in government operations, while blocking leakages from revenue generating agencies.
He, however, emphasised that the on-going war against corruption in Nigeria would not be very effective without the active support of the country’s judiciary.
He said that far-reaching reforms of the judiciary were imperative in efforts to achieve the goals of the anti-graft agenda of his administration.
“On the fight against corruption vis-à-vis the judiciary, Nigerians will be right to say that is my main headache for now,’’ he said.
The president, however, expressed the confidence that with the support of the Chief Justice of Nigeria, he would strive to improve the nation’s judicial administration system.
On the provision of basic infrastructure, Buhari announced that the Federal Government had ordered a review of the contracts signed by the previous administration with the Chinese government on several railway transport projects.
“The Chinese Government was very generous to Nigeria on the projects signed with the previous government because they agreed to fund 85 per cent of the projects’ cost.
“But the Nigerian Government had been unable to meet up with its counterpart funding of 15 per cent and so, the Chinese government was unable to make any impact on the projects,” he said.
He said that he had directed the ministers of transportation, finance as well as power, works and housing to revisit the agreements and explore ways of re-approaching the Chinese Government for sustained assistance.
Besides, Buhari said that the Chinese Government had indicated interest to assist Nigeria in project financing through its Export-Import Bank.
To further strengthen his administration’s resolve to ensure transparency in the cost of governance, the president disclosed that his administration had saved about N2.2 trillion through the initiation of the Treasury Single Account (TSA).
Apparently giving a progress report on his administration at a roundtable with Nigerians resident in the United Kingdom during his recent visit to London, Buhari said that the feat was achieved in the last three months alone.
He said that prior to the implementation of the TSA; the Nigerian National Petroleum Corporation (NNPC) had over 45 accounts domiciled in different banks, while the Nigerian military also had 70 accounts in different banks.
“We are really in trouble. We just tried to enforce what we called the Treasury Single Account (TSA) and the reason was simple.
“This government did not initiate the TSA; it was the previous government that initiated it but it was so unpopular to the bureaucracy and the previous government, for its own reasons, couldn’t enforce it.
“When we came and found that we were broke, we said this is the way to do it. And I will just tell you two examples to convince you.
“First, NNPC, the cow that was giving the milk, had more than 45 accounts, the Ministry of Defence, that is the Army, Navy and Air Force, had over 70 accounts. Tell me which account we can trace in these several accounts. So, we enforced TSA.
“We said there must be TSA. By the end of December, coming to January this year, that is last month, we mopped up more than N2.2 trillion which we have used through the bureaucracy system to raise vouchers and sign cheques so that they don’t go into the next budget.
“We found out, when I say we, I mean the present Federal Government, that some of the directors in the Central Bank own bureau de change businesses. So, whenever foreign exchange comes, they take it and give government the change. Therefore, we stopped the Federal Government giving bureau de change foreign exchange.
“Fellow country men and women, I am giving you a tip of the iceberg of the problem that we inherited and we are getting so hard because we have no other way of running the country unless we make everybody accountable,” Buhari said.
Shedding more light on the steps being taken to stimulate greater economic growth in the country, the Minister of Finance, Mrs Kemi Adeosun, said that the priority of the Buhari-administration was on how to grow the economy and achieve a Gross Domestic Product (GDP) growth rate of 4.2 per cent through the 2016 budget.
Presenting a paper titled: “Nigeria’s Economy: The Road to Recovery’’, the minister said that the full and diligent implementation of the 2016 budget would facilitate the Federal Government’s efforts to achieve meaningful economic growth.
She said the administration was equally determined to reduce cost of governance, provoke quality public service delivery and enhance revenue collections.
Adeosun said that the decision of the Buhari-administration to increase government expenditure on infrastructure, transport, roads, housing and power, was aimed at achieving a substantial increase in gross capital formation.
“This will keep the government within the acceptable and sustainable debt ratio expected of most emerging economies,” she said.
She further explained that main macroeconomic objective of the Federal Government in 2016 was to combine an expenditure-led growth strategy with a stimulant approach, based on injection of more efficiently collected revenues and blocking of leakages.
“The combination of these fiscal injections will have a catalytic multiplier effect on the GDP growth rate,” she said
According to her, the government has developed a “shadow budgeting process with tactical responses to build in flexibility in the country’s borrowing needs”.
Adeosun pledged that the administration would go ahead with its robust commitments on infrastructure development in spite of its dwindling resources occasion by the fall in crude oil prices.
“For an economy dependent on crude oil for 70 per cent of government revenues, the 12-year-low in oil prices, the downward revisions to the global outlook and the re-ordering of the global economy are ominous signs.
“For years, oil prices were at historic highs, and at 114 dollars per barrel; we spent, government spent, people spent and our economy seemingly ‘grew’ but this growth masked much vulnerability.
“There were consistent warnings about the volatility of oil prices and the need to diversify our economy to support our huge population.
“Whilst we paid lip service to this need and extolled the potential of many sectors, we did not plan adequately to ensure that we worked towards this,’’ she said.
By and large, economic analysts urge the National Assembly to hasten the passage of the 2016 budget in order to assuage the hardships of the ordinary citizens.
They also underscore the need to channel a substantial part the recovered loot towards the rehabilitation of the north-eastern states that were ravaged by the Boko Haram insurgency.
Adamu is of the News Agency of Nigeria (NAN)

Sani Adamu