Obaseki: bombshell on the economy

By Taiwo Okanlawon

Governor Godwin Obaseki has thrown a bombshell over the state of Nigeria’s economy, its heavy indebtedness, the shrinking oil revenue and oil majors reducing investment.

The real bomb was when he said the Federal Government literally printed an additional N50-60billion to augment the revenue shared in March by all tiers of government.

Obaseki threw the bombshell while addressing a meeting of transition committee stakeholders’ in Benin on Friday.

He said: “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 a 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.

“Everywhere else, the government relies on the people to produce taxes and that is what they used to run the local government, state, and the federation. But with the way we run Nigeria, the country can go to sleep, the country can go on holiday. At the end of the month, we just go to Abuja, collect money, and we come back to spend.

“I’m an economist and investment banker, We are in trouble, huge financial trouble,” he said.

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Obaseki, who described the current price of crude oil as only a mirage, lamented that the country had continued to borrow despite unclear means of repayment.

“What we used to rely on, crude oil of 60 to 70 per barrel, it is only a mirage, it not a question of time because the major oil companies, Shell, Chevron who are the ones producing are no longer investing as much in oil.

“Chevron is now one of the world’s largest investors in alternative fuel, so in another year or so, Shell is pulling out of Nigeria.

“So in another year o so, where will we find this money that we go to share in Abuja?

“Last month, when we got FAAC for March, the Federal Government printed an additional N50-N60bn to top-up for us to share. We say remove subsidy, they say no. This April, we will go to Abuja and share. By the end of this year, our total borrowing, it could be in excess of N15trn to N16trn.”

“And my worry is that we will wake up one day like Argentina and the Naira will be 1000, 2000 and moving. You can imagine a family that we don’t have money coming in, we are just borrowing without any means or idea of how to pay back and nobody is looking at that, everybody is looking at 2023. Everyone is blaming Mr. President as if he is a Magician.”

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