Nigeria is in financial trouble, and the Federal Government of Nigeria printed N60bn to share in March, according to a hard to watch video (below) by Edo State governor, Godwin Obaseki. This is not really news because we know that Nigeria has been printing money recklessly. After the freeze on bank dormant accounts, and unclaimed dividends, the only option was printing since the lenders are getting stricter.
Everyone prints, including the United States. But the difference here is that the US has a roadmap on how to cover the flanks while Nigeria is still digging. As the governor noted in the video, you are like a family which keeps expanding spending even when your source of income has diminished, pretending that everything is fine. Certainly, that playbook will not work in the long-term as one day the system will collapse.
Nigeria’s biggest challenge today is that our government is not communicating very well to the citizens. We continue to create the impression of abundance when scarcity has hit the land. In the days of Sam Mbakwe, ex-governor of Imo State, he might have printed a document and showed the citizens on the state TV, making a case why he needed help. He did those things many times and the citizens responded.
As primary school kids, we contributed money to help him on building palm plantations, poultry, power plants, etc for the state. He never borrowed money from any foreign government. Mbakwe was like: if you need it, you have to fund it – and from the sincerity of his heart, Imolites responded. You pay school fees for your kids and you also send government money to fund developments.
I am still expecting President Buhari to come out clean and speak to his fellow citizens on the way forward. He needs help and now is the time to ask for it.
In a speech last week, with eminent Northern Nigeria leaders, I presented a template on how Southeast leaders, post-war, rebuilt and positioned the region, that 40 years after the war, from real estate holding to business to education, not many would remember that every family in Southeast began to rebuild with 20 pounds, from 1970.
Yes, that Imo state records more than 96% literacy rate today, and a former FCT Minister noting that Southeast real estate investors control more than 70% of Abuja’s real estate, are strong data points to show that Nigeria has winning models. Across all domains, Southeast from the zero-ing which happened in 1970 should be exceedingly poor, but they turned it around.
In 2007, the Minister for FCT,Mallam Nasir el-Rufai declared that “Igbos have acquired about 73 percent of landed property in Abuja”. He was addressing a gathering of South East elected officials, he also revealed how the National Chairman of the Peoples Democratic Party, PDP, Senator Ahmadu Ali abused him for demolishing his house in Asokoro District in Abuja.On a lighter mood, el-Rufai called on the Igbos to take Abuja as the sixth state of the South East in view of their dominance of the real estate sector of the FCT.
People write of Bitcoin wealth, but I tell them that the fastest accumulation of wealth in human history was done by Southeast Nigeria where in less than 40 years, men and women turned 20 pounds into empires! That is a Nigerian story and one we need to scale!
I have taken time to understand what happened and how they did it – Nigeria needs to use it to rebuild the nation. In a document I have titled “Readiness for Fly of the Eagle”, I have articulated everything in case the moment comes.
People, be hopeful – Nigeria will be fine.
Daily Trust has a piece on it and I am producing below.
Speaking at a programme in the state on Thursday, the governor said the federal allocation for March was insufficient, forcing the Federal Government to print between N50 billion and N60 billion for states to share.
“When we got FAAC for March, the federal government printed additional N50-N60 billion to top-up for us to share.
“This April, we will go to Abuja and share. By the end of this year, our total borrowings is going to be within N15-N16 trillion. Imagine a family that is just borrowing without any means to pay back and nobody is looking at that, everybody is looking at 2023, everybody is blaming Mr. President as if he is a magician,” he said.
Lamenting the overdependence on crude oil, Obaseki said the rising debt profile is worrisome.
He said oil companies are shutting down in the country, challenging the government to come up with other means of revenue generation.
“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 everyday.
“So we have run a very strange economy and strange presidential system where the local, state and federal government, at the end of the month, go and earn 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 asked.
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