A Senator, Bukola Saraki, on Tuesday insisted Nigeria is broke.
Mr. Saraki’s submission contrasts the position of the Federal Government which, via the Minister of State for Finance, Bashir Yuguda, said the nation is not broke “in spite of the challenges on revenue stream coming from source – the oil sector”.
Mr. Yuguda, after the Federation Account and Allocation Committee meeting, said it was mischief makers who were peddling claims that Nigeria is broke.
He challenged critics to come up with evidence of “what they mean for a country to be broke”, as “nobody has depleted our foreign reserves”.
“I have spoken to various people on this issue. We have never skipped holding Federation Account Allocation meeting for a month. We have not failed to pay salaries of workers, or missed our payment terms on the bond we raised in Nigeria. I do not know the issue about the country being broke.
“If not for the devaluation of the Naira, nobody has taken out all the money the country has in excess crude account. Nobody has said we have wiped out what we were able to save through the sovereign wealth fund. Nigeria is working. States are getting their money. There are challenges on the revenue stream coming in from one source – the oil sector. And we are trying to improve the revenue stream from the non-oil sector,” Mr. Yuguda said.
But Mr. Saraki disagrees.
“The country is broke. If you are having problem and are unable to meet your fiscal commitment and obligations, you are broke. Even the FAAC meeting has failed to hold twice because the Government could not see sufficient money in the account. So it’s just waiting for when the revenue would go up a bit.
“We have to tighten our belt. Hard time is ahead. There is no point pretending there is no problem. This Government of President Jonathan lost a golden opportunity to prevent this problem before oil price slide in the international market. It did not prepare,” the lawmaker told PREMIUM TIMES.
Asked why the country is facing economic problem now, Mr. Saraki, representing Kwara Central Senatorial District in National Assembly, blamed “leakages” and “mismanagement” that he said has characterise the management of the Excess Crude Account by the Federal Government, thereby eliminating safety net that could have cushioned the effect of oil price slump.
“Because we did not do the right thing when oil price had not declined,” the ex-Kwara governor said. “Other countries in Asia also face this problem but they are not feeling the effects like we do because they prepared. They were not wasteful. But unfortunately we didn’t prepare.”
“Mismanagement, corruption, wastage and leakages characterise oil subsidy management. Oil subsidy amounting to $8 billion annually accounts for about 80 per cent draw down from the ECA. But with proper management and without corruption we could have been spending 20 per cent of that,” Mr. Saraki said.
He said Nigeria pays about $4 billion for kerosene subsidy but Nigerians are not benefitting.
“You are just throwing the money to some persons,” he lamented.
Mr. Saraki also countered the claim of the Minister of Finance and the Coordinating Minister of Economy, Ngozi Okonjo-Iweala that the pressure by state governments to share the ECA led to the depletion of the funds.
“No. Subsidy payment accounts for 80 per cent of the draw down from the ECA. It was not because states are demanding their share every time. If it is true that it is the states that caused the depletion, and not Federal Government and its waste, they (FG) should not have spent their share.
“By now, that problem arises, they could have shown example by telling Nigerians to see their own part saved in an account; that it’s only states that needed the money, hence the pressure to share the money every time as said by the Minister of Finance.”
Currently, Nigeria’s ECA stands at about $2.45 billion while foreign reserve is down to $34.38 billion when compared with $43.2 billion a year ago.