Borrowing to Borrow….


From January to June 2017, the Federal Government of Nigeria (FGN) earned and retained N1,004b but spent N927.74b alone on domestic and international debt service. In the same period, the FGN did not spend a kobo on Capital projects in Nigeria. In summary, the FGN spent 92% of its income on debt service and 0% on CAPEX

If I was to be polite, I will say this is not the way to run the largest economy in Africa, if I was to be realistic, I will call this economic treason. Let us follow the money for the six months of 2017, lets compare FGN 2017 budget assumptions to actual.


  1. Universal Basic Education has received 32% of her half year budget,
  2. National Judicial Commission has received 21% of her half year budget,
  3. Salaries? Salaries paid are just 19% of half year budget.


Like you, I am surprised, the FGN has paid only 19% of budgeted workers salaries in 2017. The balance 81% represents families without salaries in a weak economic recovery, how does the FGN intend to reflate the economy when it is not meeting its budget on salaries? However, one line item does strike me as odd, the FGN has not made any financial commitment to its Special Intervention Funds in 2017. To be clear the FGN according to her own figures has not spent a kobo on projects such as “A Meal A Day” or NGAP or N5000 Conditional Cash Transfer.

There are only two conclusions,

  1. The schemes do not exist
  2. The FGN own budget figures are false

So where is the money going to? Debt, to be specific local debt. The FGN has achieved 117% of its half budget on debt. Yes, not a typo, the FGN is not borrowing to pay salaries, the FGN is borrowing to pay debt. How does a progressive government put debt repayment over building schools?

In the 2015 budget, President Buhari said, “oil-related revenues are expected to contribute N820 billion while non-oil revenue, will contribute N1.45 trillion.” The 2016 Budget was informally dubbed the first budget not funded by crude oil. President Buhari further said the budget will be funded by

  1. enforcing strict compliance with the Fiscal Responsibility Act, 2007
  2. public expenditure reforms in all MDAs
  3. recoveries of looted public funds
  4. savings from recently established Efficiency Units in Ministries, Departments and Agencies (MDAs ) by the new Minister of Finance, Mrs. Kemi Adeosun.

None of these has happened, I am yet to see a kobo of recovered funds in any Federal Budget, where are these funds that EFCC has announced are recovered? where are they held?….but I digress


President Buhari has replaced crude oil as a source of funds with the Central Bank of Nigeria (CBN).

According to the CBN statistical database, the CBN claims on the FGN, which means how much the CBN has borrowed to the FGN was N513b in May 2013, that figure is now N5,634b a more than 1,000% rise.


Who has authorized the CBN to lend N5t plus to the Federal Government of Nigeria?

The CBN Act of 2007 is clear in section 38(2) says  “The total amount of such advances outstanding shall not at any time exceed five per cent of the previous year’s actual revenue of the Federal Government.”

The total revenues of the FGN for 2016 were put at N2,947.49, this means the FGN can only get N147b from the CBN in 2017, but the CBN have given out almost N6t, on whose authority? If the FGN spends 92% of her half year income on debt service, does Nigeria have an economy? is the naira value real? The GDP growth posted is it funded by the CBN as well?  I have edited this post over and over, to make it less financial so its importance can be understood. Nigeria today is surviving not on exports of oil or yams, not on taxes or anticorruption funds but from cash printed and borrowed to the FGN by the CBN, which is illegal.

I consider myself a pragmatic man, if the CBN printed N100t and the funds was used to pay for bridges and hospitals, this would be a different post. If these funds were borrowed to pay salaries, maybe there could be an argument that salaries are “simulative”. The CBN may be independent, but it is not sovereign.

I want to close by challenging your imagination, think about how your life would be better today if the CBN invested this N5t i.e. $14b in Agriculture, Power or Railways.

We are better than this.

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