Minister of finance in the outgoing Goodluck Jonathan’s government Ngozi Okonjo-Iweala revealed that Nigeria has no money to pay salaries to government workers.
Minister Ngozi Okonjo-Iweala blamed falling oil prices in that situation. Oil prices, which nearly halved, caused what she called a “difficult cash crunch” as they oil revenues provide nearly four fifths of total revenue for Nigerian government.
“We have front-loaded the borrowing program to manage the cash crunch,” Okonjo-Iweala told lawmakers in a speech concerning the approval of the 2015 budget, which had to be revised three times due to oil price slump.
“Out of the 882 billon naira budgetary provision for borrowing, the government has borrowed 473 billion naira to meet up with recurrent expenditure, including salaries and overheads“, she added.
That means that the treasure has no funds for capital expenditure this year, having to borrow money simply to meet the ends in wages fund. Nevertheless, Ngozi Okonjo-Iweala tried to remain optimistic, stating that inflation is quite stable and remains within single digits, while the economy is even expected to grow moderate at 4.8 percent this year.
Nevertheless, this is going to be a huge challenge for the incoming government of Muhammadu Buhari as it has to face the costs of servicing loans, accompanied by naira’s inflation and growing food prices.
Empty treasury is a serious obstacle on the way to fulfill Muhammadu Buhari’s election promises. Besides that, some critics say that financial crisis caused by the decreasing oil prices has been worsened by presidential election campaign in Nigeria, which some consider to be the most expensive elections Nigeria has ever held."
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