Going forward, maybe Nigeria should have two vice presidents, a VP expenditure and a VP income generation

By Ayo Akinfe

(1) Over the last 48 hours, enough has happened to make serious alarm bells ring across Nigeria. We are unable to sell crude oil to anyone and our debt profile keeps growing by the day at an alarming rate

(2) This coronavirus has arguably hit Nigeria harder than any other country on earth simply because we are the world’s largest mono-economy. There is no other nation on the planet that has a population of 200m and is dependent on one primary commodity for 95% of its government revenue

(3) Earlier this week, the World Bank approved another $1.5bn loan to Nigeria, bringing the total amount we have borrowed since the pandemic troubles begun to $4.9bn. This is not capital for investment but just cash to fund recurrent government expenditure in the 2020 budget like the payment of civil servants salaries

(4) Over the last 48 hours, President Buhari has also written to the National Assembly asking it to approve another loan of $5.5bn. If approved, this will mean that about $10.5bn of the $28.8bn 2020 budget will be funded by loans. I do not know of any other nation on earth where 36% of its annual budget is funded by foreign loans

(5) Our woes do not end there though. It has just been reported that Nigeria cannot sell 50 cargo ships of crude oil because there are no buyers. Already, we have something like 80m barrels of crude oil sitting in our four export terminals which we cannot sell

(6) Breaking all this down into simple English, what it basically means is that Nigeria has no revenue source because the one commodity we rely on for survival is no longer being bought. If Nigeria is to avoid becoming another Afghanistan or Somalia, we need to find other sources of income fast

(7) This matter is so serious that I think we should consider changing our constitution and creating the office of vice president income generation. This person will be in charge of ensuring that the state governors are self-reliant, that crude oil or any one sector never accounts for more than 25% of government revenue and that wealth creation and diversification is at the centre of government economic policy

(8) We should then have a vice president expenditure whose job it will be to make sure revenue generated is properly invested and spent on social services like education, healthcare, transport, housing as well as major capital projects

(9) As things stand, there are simply too many fault lines running through Nigeria’s economic structure. Our budget-to-GDP ratio is too low, as is our GDP-to-tax ratio. Both our GDP and budgets themselves are woefully inadequate to cater for the needs of 200m people

(10) Even if we had zero corruption in Nigeria, our economic situation would still be dire. All it takes is one little problem in the global crude oil industry and 200m people suddenly become dependent on Breton Woods loans to survive. What do we do when debt servicing consumes 50% of our budget? I doubt if this message has got across to most Nigerians but believe you me, there is fire on the mountain