Nigerian Government Broke; Targets Pension Savings
Posted: June 28, 2013 - 10:39



Federal minister of finance, Ngozi Okonjo-Iweala
By SaharaReporters, New York

The Nigerian government is financially broke and barely able to pay its bills, an investigation by SaharaReporters has revealed. The portrait of the Nigerian government’s dismal financial situation is in sharp contrast to recent propaganda by Nigeria’s Finance Minister, Ngozi Okonjo-Iweala, and Central Bank governor, Sanusi Lamido Sanusi. Both officials have sought to depict the Nigerian economy as vibrant and robust.

Several sources in Abuja, including a legislator, a senior bureaucrat and an insider in the Presidency, told SaharaReporters that the government in recent weeks had failed to release budgetary allocations to various ministries to meet their obligations.

The sources also disclosed that the Federal Government has also borrowed massively from local and foreign banks to pay its recurrent expenditures. They added that President Goodluck Jonathan’s administration was now eyeing the N3.4 trillion pension funds to enable it to finance its deficits.

The Presidency source also revealed that Nigeria’s net oil export has been cut by half as elements close to Mr. Jonathan have engaged in massive oil theft with the connivance of the Nigerian Navy as well as members of the Joint Task Force in the Niger Delta region.

Since her second tour as a prominent minister in Nigeria, Ms. Okonjo-Iweala has constantly told the public that the Nigerian economy was buoyant. But in private she has told close associates, officials of international finance bodies as European and North American nations that Nigeria’s economic outlook was getting worse especially with decreased oil sales. With her blessing, Nigeria has also resorted to massive borrowing from China and several other non-traditional loan sources to plug financial deficits.

An economic analyst in Abuja told SaharaReporters, “By the end of Mr. Jonathan's tenure, Ms. Iweala would have borrowed Nigeria back to the Stone Age,” referring to the period Nigeria racked up loans from the IMF as well as Paris and London Clubs essentially to finance the grasping needs of Nigeria’s corrupt elite.

Another source, a legislator, stated that he was disturbed by the dire economic portrait. He described Mr. Jonathan as “overseeing the biggest era of corruption in Nigeria's history.”

At the heart of the latest plot to loot Nigeria’s resources is the plan to plant one of President Jonathan's trusted allies at the helm of the country’s pension fund to facilitate the diversion of funds meant for retirees for political and other goals.

The Presidency source said Mr. Jonathan’s inner circle was anxious to keep news of Nigeria’s poor economic outlook and financial rating from public view. “As you know, Nigeria has been downgraded in recent weeks by international financial rating organizations, but the government wants to maintain that everything is rosy.”

The lawmaker, who belongs to the same Peoples Democratic Party that is the ruling party, said he was sad that President Jonathan and his closest associates are engaged in mindless looting of the treasury for the purpose of buying victory in the 2015 general elections.

REHOZIBAH: There is no gain-saying d fact that GEJ is a profligate president

Irrespective of whatever d nay-sayers might think, all available financial indicators lends credence to d story above

That what u get when u av a shoeless,clueless n thougthless individual @ d helm of affair of a potentially great country such as dis

Little wonder he wanted 2 remove fuel subsidy when indeed he should av propose to reduce monumental corruption of his ilk

The Presidency source also revealed that Nigeria’s net oil export has been cut by half as elements close to Mr. Jonathan have engaged in massive oil theft with the connivance of the Nigerian Navy as well as members of the Joint Task Force in the Niger Delta region.

Sibrah: Fresh Air at a price!
No big surprise to those who know where they are coming from.

bloggernaija: As a member of the diaspora and as someone who socialises with traders and speculator in order to glean a poor man's investment info ,I can authoritatively confirm that Nigeria's outlook is as bad as depicted.
Casual observer of the Nigerian landscape cannot but fail to notice the similarities between today and the profligacy of the gowon - shagari years.
The import dependent economy was suddenly expanded (bubble)without any appreciable increase in productive and legacy activities.
A rapid expansion of the public sector via dubious recruitments,creation of additional layers of bureaucracy and the outright corruption of the politicians.
Add to this the inflationary pressures of such policies.add to this is the fact that the value of the naira is artificially high.right now,the federal government is spending to defend that value .while not a bad thing,but If these pressures were to continue,the money will simply run out .when that happens,the sharks will be circling to pick up the pieces.many will go poor as the baira loses value and standard of living plummets.expect crisis and instabilty everywhere and another brain drain as professional seek golden pastures abroad.expect a fire sale of all government assets for peanuts.
I hope Nigerians are ready for what is about to hit them

The sources also disclosed that the Federal Government has also borrowed massively from local and foreign banks to pay its recurrent expenditures. They added that President Goodluck Jonathan’s administration was now eyeing the N3.4 trillion pension funds to enable it to finance its deficits.

awodman: ".....a legislator, a senior bureaucrat and an insider in the Presidency..."

Hahahahahhahahahahha...I laff siddon for ground...

enigma_otr: It's on record that Nigeria loses about $1billion to oil theft in a single month. Every big scam in this has the backing of the presidency. The fuel subsidy scam, the pension fraud and now, oil bunkering. This's why the real thieves will never be caught or-when caught-punished...the presidency is involved. Now we know what this oil bunkering is on about. The presidency in order not to raise unnecessary dust like that of subsidy fraud, decides to steal before it gets to government purse. I believe if the government is not involved in it, with all the noise about 'we lose billions of dollar to oil theft', the JTF has the capacity to stop oil bunkering within a month.

otokx: There is no smoke without fire some say, well lets keep in view.

skyfall: When Pastor Bakare said that Jonathan's destiny was to bankrupt Nigeria, it sounded like a joke. Now it's happening before our very eyes.

I guess it's a good idea to convert one's savings to $$$ or even £££ before they crash the damn Naira. Or what do you finance pros think?

Worries Over Greater Reliance on Oil, Neglect of Real Sector
Posted by Editor on September 3, 2012.
By: Moses Ebosele and Femi Adekoya.

ALTHOUGH Nigeria’s revenue from oil is still rising, some key players in the economy have expressed concern over the nation’s increased dependence on oil and called for an immediate diversification of the economy.

In their appraisal of President Goodluck Jonathan’s economic policies at the weekend, the experts claimed that nothing serious had been done to diversify the economy.


According to them, opportunities in the wider sectors of the economy, particularly agriculture, have been untapped contrary to the claims by the authorities that significant progress had been made.

Consistently, in the last one decade, Nigeria’s level of dependence on crude oil for government’s spendings has been hovering around 76 per cent.

Indeed, crude oil exports accounted for 90 per cent of the country’s foreign exchange earnings in 2010 and rose to 95 per cent last year.

This year, the country’s reliance on crude oil exports for government revenues and budget, based on the benchmark oil price and assumed production, which was set at 2.4 million barrels a day, is 80 per cent.

The economic report of the Central Bank of Nigeria (CBN), for the second quarter of 2012, showed that oil revenue still accounts for 76.3 per cent of the country’s total earnings for the period.

The report also showed that Nigeria’s federally-collected revenue hit N2.59 trillion within the last three months, with non-oil revenue standing at 23.7 per cent.

Of the total revenue generated during the period, N1.98 trillion or 76.3 per cent accounted for gross oil receipts, while non-oil receipts stood at N614.6 billion or 23.7 per cent.

According to the CBN, the total revenue recorded within the period represents an increase of 7.1 per cent and 8.7 per cent above the proportionate budget and the level in the corresponding quarter of 2011.

Worried by the sustained mono-cultural profile of the economy, Managing Director of Financial Derivatives, Bismark Rewane, stressed the need for the Economic Team to be dedicated to the diversification agenda.

Also, an economist, Matthew Otoide, described Nigeria’s dependence on revenue from the petroleum sector as “funny and not sustainable.”

Similarly, a financial analyst and management consultant, Dr. Kennedy Izuagbe, said government must express its readiness to diversify the economy, not just through words, but also through effective implementation of policies.

At a recent event, the Co-ordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, had advocated the need for diversification.

Mrs. Okonjo-Iweala said: “We need to diversify the economy into sectors such as agriculture where we have a strong comparative advantage. I think Nigeria should not even be importing most of the food it currently imports. We spend about $10 billion a year on food imports of things that we can grow, such as rice, fish, sugar, and wheat for bread. Actually, we do not grow wheat very well, but we can substitute cassava flour for wheat flour. If we pursue the development of these sectors, then we will create jobs and we will diversify.”

According to Rewane, Nigeria’s continued dependence on oil is no news. Every vision and plan that have been in place over the years have always been targeted towards that end.

“Policy-makers have been talking about it but implementation has been a problem. It goes beyond saying or revealing plans, but implementing the goals. If Nigeria embarks on its diversification exercise, it will become accomplishable in the long-run if government is dedicated to the goal,” he said.

He said if states are already showing commitment to the diversification of their economies, the central government cannot remain indifferent.

Rewane cited Delta State, which he said had begun an economic transformation programme aimed at reducing dependence on oil.

Izuagbe warned that Nigeria’s dependence on oil for revenue would linger until the Federal Government realises the need to take strategic, proactive and well-measured steps towards stemming the tide.

He said: “The Federal Government needs to put together a deliberate plan that targets the development and transformation of the agricultural sector, which for me, is a major income earner that is non-exhaustive, that has super employment generation potential. Oil deposits are exhaustive unlike a well-harnessed and packaged agriculture sector, which can outlive generations and place Nigeria in the league of food sufficiency nations.

“The process of putting this policy together must be driven by sincerity and commitment from the part of the Federal Government for it to succeed. It must be a painstaking process devoid of political considerations. This is the only way forward. In his magnanimity, God has given our country probably the best arable land on earth. We probably have one of the best weather conditions on earth.

“Unfortunately, the past and present governments at best, have paid lip service to the development of this vital sector of our economy, arguably due to the sacrifices involved in developing this sector. Successive governments do not have the patience to go through the whole hog of putting a workable master-plan for this sector. They would rather maintain the status quo and continue to pray for increase in the prices of crude oil. This would not take us anywhere,” Izuagbe added.

Otoide said successive leaders in Nigeria have deliberately refused to demonstrate the “political will” to reverse the trend and keep the country on a path of growth and prosperity.

According to him, Nigeria’s economic potential lies in the agricultural sector. “If you travel round this country, you will weep. While we are fighting over how to share revenue from oil, the potential in the agric sector remains untapped.

“The only way forward is to develop our agric potential. That is the only way to create jobs on a sustainable basis. Nigeria is blessed with numerous resources. If properly harnessed, agriculture can create millions of direct and indirect jobs coupled with other multiplier effect too numerous to mention.”

Otoide further explained that the first thing the government should do is to restructure the revenue allocation formula by deploying more resources to all the councils to meet the needs of genuine farmers.

“The government should engage the farmers directly. Amenities such as good roads, water, electricity, health and security should be made available in all councils. That will go a long way to kick-start the process,” he said.

An analyst, Kayode Oluwa, said the country cannot achieve sustainable development as long as the economy depends on just one product, saying “the sole dependence of the economy on crude oil export as the main source of revenue and foreign exchange earner puts the country in a risky position that makes it vulnerable to oil price volatilities. Consequently, there is the urgent need to move away from the present monolithic economy, diversify the country’s economic base, within and away from crude oil, and explore other sources of revenue.

“Sustainable development is about ensuring that, while satisfying the needs of the present generation, a country’s natural resources are not depleted, or jeopardised, so as to meet the needs of future growth and secure the livelihood of coming generations. To achieve inclusive growth, macro-economic stability and sustainable development of the Nigerian economy, we must begin to de-emphasise the habit of consumption and ostentatious living as a nation (i.e. consuming what we do not produce) and imbibe the culture of savings and wealth creation, based on increased productivity/output, value addition, economic diversification and self-sustenance”.

He said, “the rapidly changing dynamics and volatility of the oil market has, therefore, underscored the need for rebuilding national fiscal savings. This has become imperative, more so, in view of the recent report that Nigeria may be exposed to potential oil price shock due to the combination of new supplies from non-members of the Organisation of Petroleum Exporting Countries (OPEC) as well as lower imports from the United States (U.S.) (Nigeria’s largest market).”

Corroborating statistics from the National Bureau of Statistics (NBS), the apex bank attributed the growth in the GDP from 6.2 per cent in the preceding quarter to 6.6 per cent to the increase in the contribution from the non-oil sector.

Also, foreign exchange inflow and outflow through the CBN amounted to $10.02 billion and $9.61 billion, in that order, resulting in a net inflow of $0.41 billion during the quarter.

Foreign exchange sales by the CBN to authorised dealers amounted to $8.66 billion in the second quarter of 2011, compared with $7.98 billion in the first quarter of 2012.

In the money market, the value of money market assets outstanding however, declined by 5.2 per cent below the level in the preceding quarter to N5.53 trillion. The development was attributed to the 16.5 and 98.9 per cent decline in Bankers Acceptances (BAs) and Commercial Paper (CPs).

According to the bank, the significant decline in CP was as a result of the reversal of some misclassified items. Activities on the Nigerian Stock Exchange (NSE) in the second quarter of 2012 were mixed.

Source: The Guardian.

Demdem: Not surprised. Retardeen is quietly but surely ruining the country no doubt

Alxmyr: I can see Gbawe dancing up and down this thread.
Saharareporters have just served him his right delicacy.

Believe what you like, those that know Nigeria better are smiling to bank and doing great.

taharqa2: *yawns*.... An Article on an Economy that intends to show that that Economy is 'Broke/dead' without using a SINGLE Economic parameter (Inflation rate, Foreign Reserves, Exchange Rate, FDI inflows, Capacity Utilization, Balance of Payments, Balance of Trade, Growth of NonOil sector, Stock Market Index, International Ratings, Growth or otherwise of Capital to Private Sector, GDP, GDP per Capital, etc etc) to argue that supposedly 'clear' point about the Economy, BUT rather bases its entirely argument upon 'opinions' purportedly expressed by 3 'highly placed Govt officials' (called 'sources' ) who are of course conveniently left ANONYMOUS!! ......Of course none of those Economic Parameter can be used if one wants to pen concortions like this and hookwick sm small nos of WEAK minds, since Every single one of those Parameters show an Economy in d exact direction to d one the writer(s) of this article want it to be. Talk about reasoning backwards, confidently!!!

REHOZIBAH: U hardly wil see any Pro-GEJ on a thread lyk dis owing 2 dia sycophantic disposition to evri serious issues

Dey can't match serious socio-political discourse and d reality of such with d grandstanding n self adulation which av bcum d hallmark of d GEJ govt

If dis thread were about North n South,Religion n Minority sentiments,dey wud av flooded dis place

They are educated yet uninformed,have eyes yet can't 

Little wonder dey get sucked in by paper GDP growth in d real sense of d word,GEJ is seriously under immense pressure owing to d fast declining revenue frm Crude sales due to d criminal activities of people who are eating frm d same table of Mr President hence his resort to plunging us back 2d days of massive indebtedness

He is making Billionaires out of criminals n praise singers while driving d country to d precipice of destruction!