Nigeria Borrows Money To Pay Salaries

Nigeria Borrows Money To Pay Salaries

The country with the richest economy in Africa has to beg for credits to pay government salaries. Nigeria is borrowing money to pay its expenses, Nigeria's finance minister reveal – and that’s going to be a huge problem for Buhari's incoming government.

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.

READ ALSO: Kogi State Slashes Salaries Nearly In Half

"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.

READ ALSO: Nigeria Suffers Tensity Rise Because Of Unpaid Salaries

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.

Source: Legit.ng

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Khadijah Thabit (Copyeditor) Khadijah Thabit is an editor with over 3 years of experience editing and managing contents such as articles, blogs, newsletters and social leads. She has a BA in English and Literary Studies from the University of Ibadan, Nigeria. Khadijah joined Legit.ng in September 2020 as a copyeditor and proofreader for the Human Interest, Current Affairs, Business, Sports and PR desks. As a grammar police, she develops her skills by reading novels and dictionaries. Email: khadeeejathabit@gmail.com

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