There have been numerous calls for the sack of Nigeria’s Finance Minister, Zainab Ahmed over the alleged printing of N60 billion by the Central Bank of Nigeria (CBN) to support the federal allocation to the three tiers of government for the month of March, 2021.
Governor Godwin Obaseki of Edo State kick-started the controversy, when he alleged, during the Edo transition committee stakeholders engagement in Benin, that the Federal Government had to print N60 billion to support allocation for the month of March.
The governor, who painted a grim picture of the economic situation in the country, 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 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 use to run the local government, state and the federation. But with the way we run Nigeria, the country can go to sleep. At the end of the month, we just go to Abuja, collect money and we come back to spend. We are in trouble, huge financial trouble”, he said.
Not done, Obaseki, released the bomb that has continued to reverberate all over, when he said:“When we got FAAC for March, the Federal Government printed an additional N50-N60bn to top up for us to share. This April, we will go to Abuja and share. By the end of this year, our total borrowing is going to be within N15trn to N16trn.’’
This revelation has continued to upset many, including the Minister of Finance, Budget and National Planning, Zainab Ahmed and the Governor of the Central Bank of Nigeria, Godwin Emefiele, who both reacted but differently. While the finance minister outrightly denied printing of the said amount and insisted that whatever money was shared came from the country’s revenue, Emefiele tried to be smart by half, without completely admitting or denying but rationalizing such a hugely important national discourse.
In her response, the Minister, Ahmed said the claim by Obaseki was not just false but sad, insisting that the money being shared monthly at FAAC is revenue generated. “The issue that was raised by the Edo State Governor, for me, is very sad because it is not a fact.
“What we distribute at FAAC is a revenue that is generated and in fact, distribution revenue is a public information.
“We publish revenue generated by FIRS, the Customs and the NNPC and we distribute at FAAC.
“So, it is not true to say we printed money to distribute at FAAC. It is not true’, Zainab Ahmed said with a bold face.
However, standing by his claim, Obaseki called out the finance minister, accusing her of playing the Ostrich and the federal government of monetary rascality, in a series of tweets.
Obaseki tweeted: “While we do not want to join issues with the Federal Ministry of Finance, we believe it is our duty to offer useful advice for the benefit of our country.
“The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed should rally Nigerians to stem the obvious fiscal slide facing our country.
“Rather than play the Ostrich, we urge the government to take urgent steps to end the current monetary rascality, so as to prevent the prevailing economic challenge from degenerating further.
“We believe it is imperative to approach the Nigerian project with all sense of responsibility and commitment and not play to the gallery because ultimately, time shall be the judge of us all.”
Emefiele, while trying to rationalise and justify the action of the government, ended up painting a grimmer picture of the state of the economy, even worse than Obaseki had done in his initial allegation.
According to the CBN Governor, it was the job of the CBN to print money and lend it to government, slamming the allegation by Obaseki, which he failed to deny, as “unfortunate and totally inappropriate”.
Insisting that printing is a key mandate of the apex bank, Emefiele said the bank must always act to support the government at times of ‘financial difficulties.’
He said: “If you understand the concept of printing of money. The concept printing of money is about lending money.
“That’s our job – to print. It’s about lending money and so there’s no need putting the controversy about printing of money as if we are going into the factory, printing the Naira and start distributing on the streets.
“For us to see some people playing some games, overheating the polity talking about printing of money, I think it is unfortunate and totally inappropriate. I would like to advise that this should stop. We should all work for the growth of our country and not play politics.
“It is very inappropriate for people to just give some colouration to the word ‘printing of money’ as if it is a foreign word coming from the sky.
“In 2015/2016, we were in a similar [fiscal] situation, but it is far worse today. We provided budget support facility to all the states of the country and that loan remains unpaid till now. We are going to insist on the states paying the loan back since they are effectively accusing us of giving them loans.
“Most countries of the world today are confronted by not just the health crisis from the COVID-19 pandemic but also economic crisis. I keep saying this: it would be irresponsible of the Central Bank of Nigeria or any Central Bank to stand idle and refuse to support its government at this time. Whatever we do in Nigeria is being done in any clime.
“Nigeria is unfortunately in a very bad situation and we cannot pretend about it in the sense that we are facing problems about productivity output which is gross domestic product (GDP). We are working very hard to see how we can get our heads above water. We are also concerned with issues of inflation.”
For Emefiele, printing of money to lend to government for sharing among the three tiers is not a new thing, as he alluded that it had been done in 2015/2016 when the situation was not this bad. He also said it is the same thing that is being done in other countries facing similar challenges.
The question most Nigerians are asking is why the finance minister, Zainab Ahmed denied the allegation. Most of them are worried as to Why she tried to cover up what will eventually become public knowledge with time.
For many Nigerians, Minister Ahmed’s denial only follows what the Nigerian government has been known for over the years; denying the obvious and painting the picture of an Eldorado that only exists in the minds of government officials and their spin doctors.
According to Oladele Bello, a banker and economic expert, what is happening is obvious, as the current government has tried hard to keep the real situation away from Nigerians, just to hoodwink citizens with fake reports of performance and reeling out numbers that only exist in their imaginations.
“This is not rocket science, the boat of government was rocked by the revelation by Governor Godwin Obaseki. I can tell you for free that they never expected that the printing of the money will become public knowledge, thereby, rocking the boat of the artificial image of performance and robust economy it had always laid claim to.
“The reality is that Nigeria is not just broke but the economy is already in shambles. Government is not generating enough revenue to keep up with what is needed, and they do not want to admit it. We are indeed in trouble with the insatiable appetite of this administration for loans, with those saddled with running the economy constantly telling us that the nation’s debt is still tolerable. How can the debt profile of a country that uses a huge chunk of its budget to service be tolerable? These people qualify to be called Voodoo economists!”, he said.
For Akintoba Olaore, a chartered accountant with an audit firm in the Ikeja area of Lagos, what the federal government did is indefensible, reeks of financial recklessness and portends greater danger for the nation.
Olaore said: “What government did through the CBN cannot be defended at all. It is better government opens up that the nation is in distress and we all will know what has come upon us. I do not think it is right hiding behind one finger, telling Nigerians all is well when nothing is actually well. That’s deception and it will not help this government or Nigerians.
“As it stands, what government has done is concealing the true position of the national economy from Nigerians. It is just like the management or board of a publicly quoted company concealing the true financial position of the company from shareholders. It is a major corporate infraction that can lead to the sacking of the board. Government needs to urgently give a full disclosure of the true situation of the state of the economy and stop living in denial.
“Also, government officials must know that their offices and positions are held in trust for the Nigerian people and they must be accountable to them at all times. The people are their employers and only them deserve their loyalties.”
Also, reacting to the controversy, the opposition Peoples Democratic Party (PDP), called for the sacking of the Finance Minister for attempting to cover up the printing of the money.
According to the PDP, the admission by the CBN Governor has vindicated it that the apex bank has been printing the nation’s currency at the behest of the Buhari administration and that the government under the APC has been characterized by “concealments, deceit, and falsehood”.
The party said in a statement by its spokesman, Kola Ologbondiyan on Friday: “Indeed, the admission by the CBN governor that “Nigeria is unfortunately in a very bad situation” further justifies our position that the Buhari-led APC administration has wrecked the economy of our nation.
“Our party is worried over the huge negative impact of indiscriminate printing of currency which has led to the unprecedented rise in inflation rate to 18.17% as disclosed by the Federal Bureau of Statistics on Thursday.
“The PDP calls out President Buhari to come clean on the amount that has been printed so far by the CBN to finance the deficit caused by the financial mismanagement of his government as well as what the funds had been used for.
“Furthermore, for failing the full disclosure test, the PDP demands that the Minister of Finance should immediately be relieved of her position, while the President accepts responsibility for the indiscriminate printing of currency in our Naira.
“Our party implores President Buhari to save our nation by allowing better hands to manage and salvage our economy before it is too late.”