Barely three months since he got sworn in, Nigeria’s new President, Muhammadu Buhari says his government is facing a severe financial shortage. He says that the country’s Treasury is “virtually empty” and Nigeria is in billions of dollars of debts.
Buhari’s government is in “so much pressure” that meeting even the regular paycheck for some state workers is proving to be difficult. While speaking to reporters on Monday in Abuja, Buhari said: “This is the bad management that we find ourselves in.”
Buhari, who is yet to name his cabinet close to four weeks now after becoming the President of Nigeria, took the reign of power at a time when the country was facing dropping crude oil prices. Thus forcing the government cut down on budgeted spending and devalue the local currency (naira) as the foreign-currency reserves dwindled. The Nigerian government depends on crude oil for up to 70% of its revenue.
A senior lecturer of accounting and finance at Lagos Business School, Akintola Owolabi told Bloomberg: It’s just saying the obvious. We all know about the reckless abandon with which the last regime carried out its affairs.”
As of January 2015, the foreign reserves held by the central bank stood at $34.5 billion, by June 18, the reserves had reduced to $29 billion. The central bank spent a lot of the foreign reserves in a bid to defend the naira against the dollar, but the naira declined by 7.8% over that period. The International Monetary Fund has also given a chilling forecast for Nigeria’s economic growth, putting the 2015 forecast at 4.8% from the previous year’s 6.3%.