Anarchy looms....

The Federal Government’s retained revenue, which is the actual revenue realised before its augments with borrowed and deficit financing resources, is dwindling by the day.
It is dwindling when compared with the expenditure and the need for investment in all sectors of the economy. However, the surprise is that this low revenue to expenditure situation is not making the headlines. We are stuck with headlines about permutations on the 2023 presidency, one year after the 2019 elections, incessant killings and corruption in high places. Nigeria is going bankrupt and it seems no one in a position of authority cares.

Last week, the media reported the interaction between the Minister of State for Finance and the House of Representatives Committee on Finance during the consideration of the Medium-Term Expenditure Framework 2021-2023. The minister stated that the retained revenue for the period January to June 2020 was in the sum of N1.81tn which represents 68% of the prorated target. Thus, we missed the projected revised revenue mark by 32%. On the other hand, the Federal Government had spent N4.45tn within the period and this represents 89.3% of the prorated N4.99tn which should have been spent within the period in accordance with the revised budget. The implication is that we spent N2.64tn which we have not earned. The earned revenue of N1.81tn represents 40.2% of the overall expenditure of N4.45tn. Essentially, we have not realised up to 50% of our expenditure and the extra N2.64tn which is 59.8% of total expenditure is based on borrowing and deficit financing. Even if we got 100% of the revenue projection, we would still have been in great deficit.

The breakdown of the expenditure showed that N1.57tn was spent on debt service while personnel including pensions took N1.61tn. Combined, debt service and personnel amount to N3.18tn which is 71.4% of the overall expenditure. The minister further indicated that by July, about N1tn had been released for capital expenditure which came up to 22.4% of the overall expenditure for the period. It is important to note that while other expenditures were stated as of the half year of June, it is the capital expenditure that we got the figures up to July, may be to shore it up a little. And the remaining money to complete the N4.45tn figure must have gone to statutory transfers.

The revenue performance showed that the Federal Government’s oil share was N859.1bn which is 169% performance and above the prorated sum in the reviewed budget. This is understandable considering that oil now sells above the crude oil benchmark price adopted in the revised budget. Non-oil taxes totalled N581.23bn which is 72% of the revised target, being off the mark by 28%. This shows that we are not in control of the realisation of resources needed to fund the federal budget. The price of oil is not within our control and the fact that it has picked up in the international market has nothing to do with our inputs or managerial ability. The non-oil taxes which are ours to administer did not meet the target. Even if it is admitted that the coronavirus pandemic had badly affected economic activities making it impossible to generate targeted non-oil taxes, the revenue generating capacity is still too weak to meet necessary expenditure.

The implications and breakdown of the foregoing figures show that if we are to live on our actual earnings, after paying salaries and pensions of N1.61tn, the Federal Government had only N200bn left in its kitty which was not enough to pay for debt service in the sum of N1.57tn, even if we are to discount capital expenditure of almost a trillion. The crystalising fact is that we are borrowing to service previous accumulated debts. However, the minister stated that recoveries and stamp duty collection during the period had yet to be computed and added to the revenue. This raises the poser; why then is it taking so long to account for stamp duty and recoveries?

what has been the reaction of the government to this literal fire on the mountain fiscal scenario? Is anyone in government taking a haircut on his entitlements? Have we stopped the culture of waste? Have we stopped the culture of corruption? It is within this period of poor revenues that the officials of the Niger Delta Development Commission awarded fat unapproved and illegal COVID-19 support to themselves. What action has the government taken on its proposed reduction in the cost of governance in terms of reviewing and making actionable the Oronsaye committee report? In other climes, there should have been several expert groups working on how to shore up the finances in the short, medium and long terms. No, not in my dear country, Nigeria. We keep walking like drunks from one challenge to another and never resolving any.

[b]The above figures show clearly that our debts have become unsustainable because in every sense of it, we are no longer able to service the debts, not even paying back, if we do not further borrow. [/b]Once any organisation or country has reached the state of borrowing to pay back previous debts, any attempt to put a spin to the debt crisis is an exercise in futility meant only to deceive the uninitiated. The unfortunate aspect of it is the Federal Government has legislative approvals for new loans which have not been drawn down. Imagine what the ratio of the retained revenue to debt service will be when we draw down about $22bn more in loans. Playing the ostrich and hiding our head in sand will not solve this huge fiscal crisis. It will rather make it get out of hand.

So, where do we go from here? In considering the MTEF 2021-20123, the National Assembly should put a moratorium on all fresh borrowing; and take time to reconsider already approved but to be drawn down loans. But the bulk of their time should be spent on blocking leakages in the system. They should also tell themselves the truth, which is that they can block leakages and stop corrupt practices if and only if they live above board because Nigerians are tired of the embarrassment of federal legislators being taken to the cleaners by officials called to account for their stewardship.

https://punchng.com/nigeria-is-on-the-edge-of-bankruptcy/

So bad,we predicted it but children of hate from the waste side voted for this disaster now we are all suffering.

To your tenth oh Isreal I pray

Nigeria is keeping black man down.

: Anarchy Looms'; As Nigeria On The Edge Of......na today

NGpatriot:
[s][/s]




[s]Eze Onyekpere


ipob of course, no surprise here..
[/s]

You don't care about the truth worthiness of the news..your only problem is that the article was written by a 5%er..
tribalism and ethnicity has blinded you

nairalandankrah:

You don't care about the truth worthiness of the news..your only problem is that the article was written by a 5%er..
tribalism and ethnicity has blinded you

There is nothing truthful about this, Nigerian has always been on the edge of collapse since the late 70s. It will never collapse.

Forget this country and fight for your pocket

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Una never see anything. There is fire on the mountain. Vote wisely una refused. Only God will help us.

Debt to GDP ratio is 26%

What sort of dooms day economist is this


I laugh at idiots thinking credit facility Chinese EXIM bank, world bank , IMF are offering us that we are doing Chinese and world bank a favour ..

If we foolishly don't take these infrastructure loans and credit facilities now Ghana would take it, Ethiopia would take it, even almighty US would grab it through bonds


.

Anarchy can be stopped with deep thinking... Nigeria definitely have potentials if only we can seat down and think while also stop killing each other on ethnic and religious lines. We have got a great country and a wonderful people minus the looters and those tarnishing our image.

NGpatriot:
[s][/s]

Eze Onyekpere


ipob of course, no surprise here..

You're most time at the same side with me on national issues, but you're wrong here. It has absolutely nothing to do with ipob. Fowler was doing a great job until Buhari removed him and replaced him with someone who seems to have no idea of this job. It's a terrible situation here.

Keep on wailing. A lot of us that are hard working are seeing the slow and gradual emergence of a New Nigeria of our dream. If past government had rule this way imagine were we would be in terms of development. Buhari continue. If I have the power I will give you another 4yrs to consolidate on the humongous developmental projects across Nigeria.

Fantasticcc:
So bad,we predicted it but children of hate from the waste side voted for this disaster now we are all suffering.

You guys are the ones that make it all about hate, hatred for Buhari even before he contested for the 2015 elections. Then the hatred got to psychosis levels after he defeated a Ebele Azikwe. The hatred was then transfered to the "wasted side" for voting for the disaster as you put it, despite Buhari garnering only about 40% of the actual votes.

You guys conveniently forgot that Ebele Azikwe was already borrowing just to pay salaries when crude fell to about $70 to the barrel, and his finance minister warned of tougher times ahead.

Now, I am not exoneration the Buhari administration for financial recklessness, but the blame should not squarely lie with the administration. The National Assembly which comprises of people from the " Waste side" and the "potopoto republic " also carries most of the blame. That is because the power of the purse belongs to the national assembly. The government cannot borrow $1 without the approval of the National Assembly, in fact it cannot spend N1 without approvals from the national assembly. So how come the national assembly are behaving as if they are oblivious of the precarious financial status of the country? It is either they are not doing their job or they are complicit.

The reasons we might go bankrupt under this administration are just too numerous, but the most prominent ones are:
The inability of the current administration to reduce the cost of governance and block the leakages/loopholes in public finances as promised
Overreliance of this administration on oil despite their promise to diversify the economy
The people currently managing Nigeria economy are not competent enough. This is very glaring for all to see.
Political appointments under this administration are simply compensatory and not really based on merit.
More than 80% of our state governments are not economically viable; they're unproductive and are not contributing anything to the treasury.
Due to our poor educational system, more than half of Nigeria population are extremely ignorant and unproductive, hence they have become heavy burdens and liabilities instead of contributing to Nigeria's socio-economic growth.

A country who failed to plan, has already planned to fail!

Our current Financial status has never been clearer, the rising number of taxes is evident enough to tell you Govt is scrambling for money from anywhere and everywhere..

From the writers point of view, of what use is joining hands trying to breath when heavy stolen funds that could make an impact are not probed...

Sad reality really.

I guess this is part of the reasons they want to stifle voices.

You talk about thier incompetence, they label it hate speech;

A patriotic public servant tries to expose their thievery, they label it hate speech;

People try to protest against their failure' they label it hate speech;

You complain about killings; hate speech;

I think Buhari is trying his best just that he inherited governance from an incompetent otuoke man who messed this country up with his gang of thieves

Ceegar01:
I think Buhari is trying his best just that he inherited governance from an incompetent otuoke man who messed this country up with his gang of thieves

....... and you think BUHARI is averagely competent to represent you as president...?

What’s the direct connection of the state of the economy with Fowler? And wasn’t he found wanting with his performance?



Kindly explain...

Olominira:


You're most time at the same side with me on national issues, but you're wrong here. It has absolutely nothing to do with ipob. Fowler was doing a great job until Buhari removed him and replaced him with someone who seems to have no idea of this job. It's a terrible situation here.

Not only at the edge alone, it in the pit already..


abeg my signature is saying something ...

incompetence of GMB has further damaged the economy

We are stuck with headlines about permutations on the 2023 presidency, one year after the 2019 elections, incessant killings and corruption in high places. Nigeria is going bankrupt and it seems no one in a position of authority cares.

The most corrupt selfish greedy nepotistic clueless wicked hypocritical senseless supporters and govt

EVILFOREST:

....... and you think BUHARI is averagely competent to represent you as president...?

GMB has done worst. he is a reinforcement of failure

Nigeria can never go bankruptcy. Let's see anyway.