Yesterday, Nigeria announced that she would be borrowing from international Lenders. This has re-enforced the analysis on this blog about the true state of our economy. If you have been reading this blog on the economy, the announcement by the statistics bureau that Nigeria is in recession would have been an announcement earlier foretold. I do not understand how people expect an economy that depends wholly on oil to survive, through some abracadra from economic experts, when the crude sale is low. That we are even surviving as it is should be another study in the world of economics because it’s just a mystery to me. At $45/barrel, I’m still at a loss as how the system is functioning at all. Little wonder why there’s so much pressure on the Nigeria customs to bring in cash. It’s no longer funny.
I have said it that Nigeria needs a healthy injection of quick cash into the system. Please don’t tell me about the TSA, looters funds or diversification stories. The way the government with the system is set up, there’s an immediate need of serious inflow into the government coffers. The crude oil that used to offer such has a low value that would just barely satisfy the greed of the industry operators and the bankers. The crumbs would be so difficult to satisfy a system that is not configured to “manage” money. Buhari is totally helpless in this scenario. He is managing a very bad situation and I must confess I’m baffled at how he’s managing a terrible situation. That it could only get worse is not an intelligent guess; it is a reality.
In my earlier posts, I said Nigeria can breathe if the crude oil price increase substantially to accommodate the recurrent expenditures that the system is carrying or the system is reduced to the level where the current crude oil sale could sustain. In the alternative I also proposed that any natural resources that could offer close to the amount of inflow that crude oil brings would be a God-sent in this respect. Additionally, the last option was to borrow but we all know that no one would borrow Nigeria money to pay Government people’s salaries and allowances. No one would give us loan to sustain the kind of bureaucracies we have in the federal and state Governments. It would be difficult for anyone to come out with physical cash that would continuously sustain the senators and the house members with all the corruption that is embedded. Collecting loans must always come with conditions,your guess is as good as mine. However, does the Government really have a choice?
A man who suddenly lost a lucrative job after 25 years of working needs to get another job immediately to sustain his sanity.Alternatively, he must have a means of inflow into his account because he has never been used, for decades, to not having a good monthly income . Once that is not possible, which can happen, he gets into a world that he has forgotten or never been used to. Not everyone is good at managing financial crisis. Nigeria, for over 25 years, has never been short of serious cash inflow. We are now faced with it and it is not funny.
I have written a lot on this economy issue so repeating my gist makes no sense.
I am not surprised that Government is now talking about borrowing because I knew all along that the Government is broke. All the nice platitudes to the people are just sermons to encourage hope. The Fact is clear; the Nigerian system needs immediate injection of cash for sanity to reign. We might need the “Babalawos or dibias” that manufacture money(dollar o!!) from the spirits or Buhari turns himself to money. Like I said: it is not funny…Ewolewoo
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