A disaffected insider within President Goodluck Jonathan's administration as
well as several banking executives have told Sahara Reporters that Nigeria
faces a deep economic crisis and massive social gloom after the 2015 general
elections. Speaking from differently, the sources said President Jonathan had
virtually vacuumed the Nigerian treasury to serve his re-election campaign,
leaving Nigerian banks in dire straits and many states on the verge of failing to
pay salaries this month.
"The truth is that Mr. President has almost emptied the treasury, and some of
us close to him are even beginning to get worried about what will happen after
the election," said the political insider.
The bankers echoed the sentiment. "The reason the Naira has taken such a
dramatic plunge over the last three or so months is that politicians moped up
the hard currency for elections," said one banker. " I have never seen anything
on this scale, where politicians snatch up every hard currency in sight, whether
dollar, Euro or pound sterling," he added.
Asked who is responsible for the situation, the banker said he would not
engage in partisanship. "All I know is that this country is now in a frightening
economic position — and all these politicians running up and down to retain or
take power have created the situation," he asserted.
But another banker was not shy in pointing a finger at Mr. Jonathan. "The
president has been indifferent to the economic crisis caused by the ongoing
campaigns. And the reason he is indifferent is that he is the major culprit,"
said the executive. He added that the distribution of largesse by Mr. Jonathan
had now become "one of the few lucrative businesses in Nigeria."
The bankers said massive layoffs were inevitable in the banking and other
sectors of the Nigerian economy. They said numerous companies that
depended on imported machinery or other components sourced from abroad
were bleeding cash. "Many Nigerian companies are experiencing severe cash
flow problems. Many of them are defaulting on long and short-term loan
repayments. So the banks are suffering heavily as well," one banker told
SaharaReporters.
Two of the bankers disclosed that the banking industry would have laid off
thousands of workers, but that officials of the Jonathan administration
pressured them to wait until after the elections. "It will take a long time before
banks recover from the current shocks in the system. There's no bank strong
enough not to retrench staff," one said.
The stress in the banking sector, with the prospective job losses, will be
compounded by massive retrenchment in the civil service at the Federal and
state levels, one source predicted. Our source inside the Presidency revealed
that Mr. Jonathan plans to follow former President Olusegun Obasanjo's style
by removing fuel subsidies as one of his first economic acts. "The truth is that
it's a must that fuel subsidy has to go because the money is not there to
continue [paying for] them," he said.
As part of an arrangement to receive slush funds from oil marketers, Mr.
Jonathan and Ms. Alison-Madueke allowed numerous marketers to make
fraudulent claims and get paid for importation they never made. That criminal
collusion has put Nigeria in a situation where the oil marketers are being owed
N450 billion. "Nigeria will have to deal with this and other debts from
fraudulently inflated invoices once the elections are over," one banker said.
The scam also helped create a recent fuel scarcity in the country. As the fuel
situation threatened to become a politically costly crisis, Mr. Jonathan asked
the oil marketers to offload fuel they had been "round-tripping" in order to
collect unearned subsidy payments.
Bankers agreed that the government would find it extremely difficult to pay
that debt after the election without rolling back or eliminating subsidies
altogether. In recent months, oil marketers as well as operators of the
privatized power sector received massive financial handouts from the
Jonathan administration. In turn, they donated billions of naira to Mr.
Jonathan's re-election campaign.
President Jonathan has gone on a dollar-spraying spree since the general
elections were postponed by six weeks. Our sources disclosed that the
president had doled out more than $200 million, using generous cash gifts to
entice various traditional rulers, politicians and activists, especially those in the
southwest and parts of the north, to endorse him.
Several sources said much of the president's campaign cash is from shady oil
deals brokered by Petroleum Minister Diezani Alison-Madueke. The massive
theft of Nigeria's crude oil remains an open scandal, and one of the richest
sources of funds for the campaigns. Last September, Al Jazeera reported that
the theft of Nigeria's crude oil was at its highest rate in years, adding that
several hundred thousand barrels of crude are stolen each day.
The continuing crisis of crude oil thefts has persisted despite the Jonathan
administration's security contract to Global West Specialist Agency, a company
owned by Government Ekpemukpolo (popularly called Tompolo). The contract
to Mr. Tompolo's company was for the supply of 20 patrol vessels to enable
Nigeria's military authorities to better secure the coastline and stem oil theft.
Mr. Tompolo's firm was also engaged as a consultant to prevent crude oil
heists.
The latest rating firm of Standard & Poors said that the Nigerian economy
faced a clear and present danger. Nigeria's external reserves have been
significantly depleted in the past year, said a banker, adding that many state
governments were already looking for loans to pay workers' salaries.
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