Nigeria’s revenue shortfalls are beginning to hit home with brute spikes. The federal government has issued warning to ministries, departments, and agencies advising them to prudently expend their November salaries as their next pay may only come from January 2022.
The advice was contained in a circular dated November 25, released on Wednesday, signed by the FMC Keffi’s head of finance and accounts, Samson Adegoke. The circular reveals that federal workers will not be receiving their December salaries due to shortfalls in budgetary allocations.
“Due to the recurrent trends of shortfall in budgetary allocations and its attendant effect on the payment of salaries in recent times across various MDAS, the management wish to regrettably inform all staff that there might be an envisaged delay in payment of December 2021 salary in the Centre.
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“Accordingly, all staff are advised to be cautious in spending their November 2021 salary and to make provisions for Christmas celebrations therefrom,” he said.
The circular confirms the outcry of some members of the Nigerian Police Force, who have lamented the “delay” in payment of their November salaries. The police authority had in a signal message sent around 1:50 p.m. on December 3, informed personnel of the situation, citing delay in processing funds from the Federal Ministry of Finance.
“Information received from the Integrated Personnel and Payroll Information System unit of the office of the accountant general of the federation indicates delay in the processing of funds salaries which implies that there will be a delay in payment of November salaries,” the IGP of Police, Mr. Usman Baba said in the signal.
While the police blame the delay in payment of its personnel salaries on the Finance Ministry, pointers are indicating that it has more to do with the federal government’s revenue shortfalls.
As the oil economy dwindles, the Nigerian government has depended on loans to fund budgetary allocations, and that has come with weighty consequences. The Debt Management Office (DMO) said Nigeria’s total public debt has risen to N35,465 trillion as of June 30 2021. This means, currently, the federal government is spending over 98% of its revenue on debt servicing.
The situation has been largely compounded by Nigeria’s plummeting oil output, insecurity and poor fiscal policies. While the federal government boasts that the economy has been diversified to yield sustainable revenue, export and import indices are indicating the opposite.
The Nigerian Bureau of Statistics (NBS) disclosed on Monday that Nigeria recorded N3 trillion negative foreign trade balance in the Third Quarter (Q3) of 2021 as total imports hit N8.2 trillion against N5.1 trillion during the period.
The Statistician General of the Federation and Chief Executive Officer of National Bureau of Statistics, Dr. Simon Harry revealed that Nigerian export trade was mainly dominated by Crude Oil, which amounted to N4 trillion Naira.
“In terms of exports, Nigerian Export trade was mainly dominated by Crude Oil which amounted to N4 trillion (78.47%) of total export in the Third Quarter. This was followed by Natural gas, liquefied with 487.49billion (9.50), floating of submersible drilling platforms with N163.70 billion (3.19%) and Urea, whether or not in aqueous solution with 107.17billion (2.08%).
“On the other hand, imports were mainly motor spirit valued at N1.1 trillion (12.91%), Dur wheat valued at 315.17 billiom (3.87%), Gas Oil with N225.63 billion (2.77%), Used Vehicles N185.41 billion (2.27%),” he said.
The Nigerian National Petroleum Commission (NNPC) said last month that it recorded a revenue deficit of N1.29 trillion from January to September this year.
With covid variants meddling with oil market’s chances of rebound, Nigeria’s revenue shortfalls is expected to linger into the future. Federal government’s inability to pay workers shows how broke the country has become as a result of the oil revenue downturn.
Last month, the Senate approved more than $17 billion fresh loan request made by Buhari. Given the current situation, it appears the federal government is counting on the loan to offset its workers’ salaries.
Finance Minister Zainab Ahmed has said that Nigeria will depend on loans to fund its 2022 budget, painting a dire picture for workers and the country’s economy.
The backdrop is stoking concern that the government’s failure to pay workers will exacerbate corruption, especially within the Police – exposing more Nigerians to harassment, extortion and brutality.