By Mike Hunder
For eight straight years, the Buhari administration had been turning up the “no money” rhetoric. Added to the puzzle, at a time when oil-producing countries were reaping sustained windfalls from high oil prices, at above $100 per barrel on average in 2022, following the Russia-Ukraine war, the NNPC made zero remittance to the federation account for most of the year.
Now, a series of striking revelations have contradicted the administration’s “no money” claim, at a dramatic speed.
First, the Auditor General, in a 2022 letter to the Senate revealed that “a total of 17,877,705 barrels of crude oil valued at $1,020,969,281.12 (over one billion, twenty million dollars), were exported between 2016 and 2020, without proper records. This perhaps explains the non-remittance of funds by the NNPC into the federation account that characterized the administration.
Second, things got so bad that, the then Minister of Finance, Mrs. Kemi Adeosun, locked horns with NNPC over shortchanging the government on several occasions. In one instance, in June 2018, there was a standoff between the National Economic Council and the Nigerian National Petroleum Corporation (NNPC), when the then Minister of Finance, Mrs. Kemi Adeosun, pointedly accused the NNPC of short-changing the government. She declared NNPC’s account to the federal accounts allocation committee (FAAC), “unacceptable” and asked that they render the full account of the “missing billions”!
What happened there after? The “deep state” clipped her wings, with allegations that she forged her NYSC certificate. Three months later, she resigned, and life went on.
Another revelation came to fore on the floor of the Senate in December 2022. That about 100 federal MDAs failed to account for the sum of #1.9 trillion naira from 2017 to 2021, despite several invitations. More shocking, most of the agencies involved, report to the presidency. This included the State House, Presidential Fleet, Ministry of Finance, the armed forces, Police, Accountant General office, NEMA, Ministry of Defence, Special Assistant to the President on Niger Delta Affairs and many others.
The fourth was a bigger problem than many first thought. The CBN embarked on unfettered “printing of money” for the Buhari administration since 2015, in repeated disregards of the laws. Under the CBN Act, “ways and means” facility (a code for printing money for government), should not exceed 5% of the previous year’s revenue of the government and must be paid within the financial cycle. Then again, Section 38 provides that, “ways and means”… must be refunded before the collection of another one.” Yet, the Buhari administration kept collecting “ways and means” from the CBN, without making a refund, in a zeal not seen before, hitting #23.7 trillion by December 2022.
When the Edo state governor, Godwin Obaseki, first spilled the beans about CBN’s printing of money for the federal government back in April 2021, the government denied it. Now, realizing that the “ways and means” account, cannot possibly be kept way from the public beyond May 2023, the president has sent a request to the Senate to give it a second life. Asking for a legislation to restructure it, and pass the repayment to future generations over a period of 40 years! Added to the puzzle, the request contained no records of how, when and what the #23.7 trillion was spent on.
Until recently, the administration claimed that Nigeria does not have a debt problem, but a revenue problem. Then, it embarked on constant external borrowings, increasing external debts by 300% between June 2015 ($10 billion) and June 2022 ($40 billion), without a corresponding increase in foreign currency earnings. Now, Patience Oniha, the director general of the Debt Management Office, when appearing before the House of Representatives to defend the 2023 budget, revealed that Nigeria does have an external debt problem. To the extent that Moody’s and Fitch downgraded Nigeria to a Category ‘B’ economy in 2021, the international market has closed its doors of borrowing against Nigeria, making it difficult for the country to borrow.
On top of this, fell the huge national debt stock, at seventy-seven trillion Naira.
Thus, an ugly spiral has developed: huge sums of money that are unaccounted for, constant external borrowings without a corresponding increase in foreign earnings – and a gigantic national debt of seventy-seven trillion Naira, completes the circle!
In the current climate, what is puzzling to people is, where did all this money go? Many who have defended the administration on financial prudence, now say they cannot go beyond this caricature. Then again, post-May 2023, things will probably get worse, before they get better. So, now comes the hangover!
*Mike Hunder, an economist and business-training consultant based in Lagos, is a former General Manager at Union Bank Plc and Oceanic International Bank, respectively. He can be reached at: hundermike@mikehunder.com