Nigeria is now at the risk of running out of cash in five months, according to a report by Premium Times: “Nigeria nears economic collapse; external reserves down to $15 billion contrary to CBN’s $36 billion claim”. It is not rocket science: if NNPC does not pay into the reserves, the numbers will not improve since we hardly make money from any other source. The biggest challenge is that many citizens still think that Nigeria has a positive financial positioning.
May I tell ASUU and the striking university professors, the probability that the government will fund (fully) whatever you are asking for is close to zero. In short, as you strike, you are making it easier for your line items to be removed from some of the problems at hand.
The minister of labour, Chris Ngige, was blunt: ““I can tell you that Nigeria is broke. There is no money to fund capital projects next year. As you can see, the dollar that has been hovering around N500 and N600 is now above N700. The truth is that there is no money anywhere. The National Nigerian Petroleum Company Limited (NNPC) no longer remits money to FAAC. So, the situation calls for patriotism from all Nigerians. The lack of money to fund capital projects would have implications on capacity to create jobs. If jobs are not created, poverty will increase in the country.” With debt servicing absorbing the little revenue we generate in Nigeria, we have crises ahead.
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(Of course, it is hard to believe the government when it still has enough funds to buy vehicles for politicians in the neighbouring Niger Republic.)
But get this from me: provided you plan to vote in 2023, there is HOPE. In FUTO, we skipped meals to balance our budgets as students. But one day, we started working in the bank, and they paid tons of money – and that past immediately became a distant one. A new leader can fix Nigeria even though it may take a lot of work. #believe
As Nigeria prepares for general elections next year that promise to be one of the most keenly contested in its history, evidence is emerging that the economy faces a double whammy: an empty treasury and rapid decline.
Government officials and business leaders knowledgeable about the situation say there have been concerns in Abuja and Lagos after an elected official drew the attention of the Central Bank of Nigeria governor, Godwin Emefiele, to the fact that Nigeria’s external reserves amount to only $15 billion, well below the $36 billion balance on the gross external reserves claimed by the bank.
With the country spending N5.9 trillion on imports in the first quarter of the year, irrespective of the preferred exchange rate, reserves of $15 billion would barely cover four months of import.
Financial analysts claim this would not have mattered much but for recent difficulties in different sectors of the economy, especially the export constraints that have seen the nation’s petroleum monopoly unable to add to the reserves in the last six months.
The NNPC’s inability to remit oil sales receipts to the CBN, despite elevated crude oil prices, is seen as one reason why the naira has nose-dived recently in the parallel market.
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