In the face of dwindling oil revenues, Minister of Finance, Ngozi Okonjo-Iweala, said the Federal Government has borrowed about N473billion to pay salaries and fund the 2015 budget.
The Minister, who was speaking in Abuja on the details of the N4.493trillion appropriation already passed by the National Assembly, said the federal government had to raise its borrowing level from N570 billion to N882 billion to enable it meet its financial obligations to workers and contractors.
The minister blamed it on the decline in oil revenue in late 2014, which accounted for 50 per cent cut in the total federally collectible revenue as well as the low revenue receipts from non-oil sources.
Nigeria borrows to pay salaries with cash crunch worsening. (Vanguard)
A cash shortage caused by low oil prices has forced Nigeria to borrow heavily through the early part of 2015, with the government struggling to pay public workers, officials said Wednesday. “We have serious challenges. Things have been tough since the beginning of the year and they are likely to remain so till the end of the year,” said Finance Minister Ngozi Okonjo-Iweala.
Nigeria typically sets its benchmark crude price between 75 and 80 dollars, and is supposed to deposit excess revenue in a savings account. But even when crude was selling above $100 last year, Jonathan’s administration struggled to build savings. Critics say the excess crude account has been repeatedly raided by powerful political actors.
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