Latest news on economic crisis in Nigeria

Ignore fake video, news against Gov AbdulRazaq — Kwara  govt

December 8, 2022

By Demola Akinyemi

Special Assistant to Governor AbdulRahman AbdulRazaq of Kwara State on Political Communications, Bashir Adigun, has urged members of the public to ignore what he described as doctored video and fake news claiming that the governor accused the legislators of non performance.

In a statement yesterday in Ilorin, Bashir Adigun, said “Our attention has been drawn to a fake story, accompanied by a doctored video, purporting that Kwara State Governor AbdulRahman AbdulRazaq accused the state lawmakers or the government of not performing.

“The said information is being peddled by known peddlers of fake news whose masters was recently captured on video asking them to spread lies and propaganda against the Government. They went as far as doing a photoshop of Daily Trust and planted a false story in some other news platforms to lend credence to their shameless lies.

Economic crisis: What to expect in the coming days – Experts

August 13, 2022

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•Current fiscal distress may  threaten Nigeria’s sovereignty

•More Nigerians to fall below  poverty level

•How to save Nigeria

By Babajide Komolafe, Economy Editor, Udeme Akpan, Peter Egwuatu, Yinka Kolawole & Gabriel Ewepo

The worsening finances of the Federal Government, reflected in declining revenue, increased borrowing and debt service, will impact more misery on Nigerians, prominent economy experts and civil society groups have warned.

 The  warning is coming on the heels of recent  revelations by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, that the FG, recorded a N3.09 trillion deficit in its 2022 budget implementation in four months, from  January and April,  as subsidy on fuel gulped N1.94 trillion, exceeding revenue for the period by 19 per cent.

 Speaking at the Public Consultative Forum on the draft federal government 2023 – 2025 Medium Term Fiscal Framework & Fiscal Strategy, in Abuja, Ahmed said,  “As of April 2022, FGN’s retained revenue was only N1.63 trillion, 49% of the prorata target of N3.32 trillion,” adding, “The actual spending as of April 31st was N4.72 trillion.”

Out of the N4. 72 trillion, Ahmed explained that N1.94 trillion was spent on debt service; N1.26 trillion on Personnel costs, including Pensions; and N773.63 billion on capital expenditure.

This development, which follows a pattern, that led to the doubling of  the national debt to N41.6 trillion at the end of March 31st, 2022  from N12.6 trillion at the end of 2015 as well as the continued depreciation of the naira and rise in  inflation to 18.6 per cent in June. It adds to the reason for the high unemployment rate of 33 per cent and widespread poverty in country, experts who spoke to Vanguard said.

While also outlining measures to address the downward economic trend and its impact on the welfare of the people, the experts, however  warned Nigerians to brace up for increased hardship should the FG persist in its spending and borrowing spree.

Less provision of critical infrastructure, amenities

In this regard, the Director General, Lagos Chamber of Commerce and Industry (LCCI), Dr. Chinenye Almona, stated:”In the face of rising debt servicing costs accompanied with dwindling revenue, provision of critical infrastructure and amenities like healthcare services, education, power, roads, and security will be hard hit as funding shrinks.

We see the unfortunate closure of our universities since February and till now no respite in sight.

 Reinforcing this position, Dr. Bayo Adedokun of the Department of Economics, University of Lagos, explained, “If government revenue dips, it will affect all the various sectors of the economy, especially Economic Affairs, which by categorization involves, agriculture, works and infrastructure, transportation, commerce, industry and solid minerals, once these sectors are affected, they can’t create jobs directly and remotely as a result of dwindling govt revenue.”

Adedokun, who is a trade, finance and development expert,  added that, “The issue of mounting debt servicing, it is no longer sustainable to use all the revenue to pay debt charges, it will have crowding-out effect on all other sectors such as education, health and social welfare, infrastructural development will be negatively affected, thereby creating wider infrastructural gap in the economy.”

Weak purchasing power & job losses

Similarly,  CEO, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said:  “The prevailing economic conditions portend a very disturbing outlook for the welfare of the average citizen.

“Weakening revenue performance,  growing fiscal deficit and rising debt service burden are indications of a vicious cycle of fiscal vulnerabilities.

“The implications for citizens and investors are far reaching and include the following:

•Mounting inflationary pressures.

•Weakening purchasing power.

•Worsening poverty conditions.

•Widening inequality.

•Further depreciation of the currency.

•Deteriorating balance of payments position.

•Escalating operating and production costs.

•Ability of governments to meet financial obligations , including payment of salaries will be undermined.

•Capacity of employers to retain and create jobs will be constrained.”

“The extreme hardship that citizens are currently experiencing is partly traceable to the impact of FG’s fiscal rascality.”, said David Adonri, Vice Executive Chairman, Highcap Securities Limited, stressing that  the current fiscal distress of FG arising from structural failures and monetary distress due to forex illiquidity have brought misery to the citizens.

“Most worrisome is the reckless  borrowing by FG from the CBN through Ways and Means advances which stands at about N21 trillion. This is about 50% of FG’s total debt exposure of N41 trillion. It fuels inflation because this credit is not predicated on any principle of money creation. It is not tied to production but mainly to finance consumption.

“If the current fiscal distress of FG leads to sovereign default, foreign creditors whose funds are currently trapped in Nigeria, can threaten the country’s sovereignty by seizing public assets. Foreign lines of credit can be cut off and Nigeria’s letters of credit may no longer be honoured. If that happens, the impact on production and availability of imported merchandise is better not imagined.

“The resultant consequences of macroeconomic instability, dwindling supply of social goods, underproduction, unemployment and loss of investor’s confidence are now challenges confronting citizens.”

Common man already paying huge price

Commenting as well, Investment Banker/Stockbroker and CEO, Wyoming Capital and Partners, Tajudeen Olayinka, said:  “Whatever hurts the economy, hurts the people. The common man is already paying a huge price for poor economic management, through persistent inflation and declining purchasing power. So, the common man will continue to suffer under this disturbing condition, while insecurity could be heightened in the process. Government must pay urgent attention to this disturbing development in Nigeria.”

Similarly, Professor Emeritus in Petroleum Economics and Executive Director, Emmanuel Egbogah Foundation, Wumi Iledare, said, “another point is that the public investment to create a level playing field for the rich and poor kids will be badly impacted as federation funding declines. Education will be badly affected because of centralised planning.”

More People will fall  below poverty level

Also weighing in on the worsening financial conditions of the FG, Civil Society Organisations, CSO warned that more Nigerians will fall below the poverty line.

Ignore fake video, news against Gov AbdulRazaq — Kwara  govt

December 8, 2022

By Demola Akinyemi

Special Assistant to Governor AbdulRahman AbdulRazaq of Kwara State on Political Communications, Bashir Adigun, has urged members of the public to ignore what he described as doctored video and fake news claiming that the governor accused the legislators of non performance.

In a statement yesterday in Ilorin, Bashir Adigun, said “Our attention has been drawn to a fake story, accompanied by a doctored video, purporting that Kwara State Governor AbdulRahman AbdulRazaq accused the state lawmakers or the government of not performing.

“The said information is being peddled by known peddlers of fake news whose masters was recently captured on video asking them to spread lies and propaganda against the Government. They went as far as doing a photoshop of Daily Trust and planted a false story in some other news platforms to lend credence to their shameless lies.