Nigeria head towards a precipice over rising debt – Obaseki

Governor Godwin Obaseki of Edo state has lamented that Nigeria has a huge financial burden, with no ideas on how to pay back its debt.

Obaseki spoke on Saturday, during the state transition committee stakeholders’ engagement, said at the end of the month, governors just go to Abuja, collect money and come back to spend.

Obaseki, an economist, and former investment banker revealed that the federal government printed N60 billion as part of federal allocation for March, noting that the country’s growing debt is becoming unsustainable.

“First, what we used to rely on, crude oil, forget what we are seeing now, $60, $70 per barrel, it is only a mirage; it is only a question of time. Because, the major oil companies- Shell, Chevron- who are the ones producing; they are no longer investing as much in oil.

“Chevron is now one of the world’s largest investors in alternative fuel. Shell is pulling out of Nigeria. So, in another year or so, where would we find this money that we go to Abuja to share every month? Last month, we got FAAC (Federation Account Allocation Committee) for March; the Federal Government printed an additional 50 to 60 billion to top-up for us to share.

He stated that by the end of 2021, Nigeria’s total borrowing is going to be in excess of 15 to 16 trillion. “My worry is that we would wake up one day, like Argentina, the naira would be 1000, 2000 to a dollar, and it would keep moving. You can imagine a family, you don’t have money coming in, and you just keep borrowing and borrowing without any means or idea of how 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.

Obaseki also lamented that Nigeria was the only country in the world where the federal, state and local governments earn salaries at the end of the month.

“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 every day.

“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 salaries. We are the only country in the world that does that,” he added.