The Nigerian finance Minister Ngozi Okonjo Iweala has said that Nigeria has already used half the borrowing allowance it has budgeted for on over heads and has not released any funds for capital expenditure so far this year.
She mentioned this in an email statement to Reuters confirming how dire the situation is amidst lower oil prices and dwindling government revenues.
“We have serious challenges,” Finance Minister Ngozi Okonjo-Iweala said in an emailed statement. “Things have been tough since the beginning of the year and they are likely to remain so till the end of the year. The borrowed money has been spent to cover overhead, including salaries.
“As a result of the 50 percent decline in oil revenues, the country has faced a difficult cash crunch … Out of the 882 billon naira budgetary provision for borrowing, the government has borrowed 473 billion naira to meet up with recurrent expenditure,” the finance ministry said.
Nigerians have been facing up to fuel scarcity in the past few weeks as oil marketers fail to lift badly needed products following complaints about non-payment of subsidy dues. This has grounded the economy in most parts of Nigeria, particularly Lagos and Abuja. The government came out earlier in the week to claim payments have been made but the scarcity still persist. Most state governments are also reported not to have been able to pay salaries for months as allocation from the federation accounts continues to drop.
Nigeria’s external reserve is also depleting with the CBN reporting just a little over $29billion in reserves as at April ending.