Business
Printing of N60b: Obaseki merely asked why borrow to fund corruption – Banker
BY KAZIE UKO
The last may not yet have been heard of the whirlwind raised by Edo State governor, Godwin Obaseki’s comment that the federal government printed between N50-N60 billion, to augment for March revenue allocation shared among the three tiers of Nigerian federation.
A finance expert and banker who spoke with RELIABLESOURCENG.COM said the Edo governor was not mistaken and knew exactly what he was saying.
“What Obaseki said, albeit mutedly, was why is Nigeria borrowing to fund corruption?
“Governor Godwin Obaseki is not a novice to the financial markets and the interplay between fiscal and monetary policies. When he used the word print money, in my opinion, he was communicating that Nigeria resulted to borrowing to cover the gap between its earnings and monthly expenditure.
“The greatest concern here is not the borrowing but the purpose of the ‘Printing of Money’. It is well understood that majority of our budget expenditure is targeted towards consumption and not really capital projects. Hence, he is asking the pertinent question of why we are borrowing to fund consumption and possibly borrowing to fund corruption,” said our source who spoke anonymously.
READ: Printing of N60b: Obaseki fires back at Minister, stop behaving like Ostrich
Asked what other options were available to the government as opposed to printing of money, our source whose banking experience spans over two decades and parades a resume´ that traverses both international and local landscape, said government knows what to do but may be lacking the will to do them, instead adopted a short-cut measure.
He said: “You spend what you earn and only borrow to fund production that gives you a minimum economic yield.
“If the Government work forces are too large for the level of output or production, hence we must perform surgeries on all tiers of government workforce, leakages and unnecessary expenses to ensure necessary adequate productivity.”
He made reference to the $1.96 billion Kano-Niger Republic rail project and the rehabilitation of the Port Harcourt Refinery with $1.5 billion as some of the unnecessary expenses by government that could save the country from plunging deeper into debt.
READ: You lied on printing of N60bn – Minister to Obaseki
“Even the capital projects need to be appraised to eliminate white elephant projects or non-economic nor social impact project. Resurrecting a rail line or a refinery at an overpriced cost and very poor Cost-Benefit Yield should not be considered a project to be sponsored with borrowings. We know what to do, in my opinion we just don’t have the will to do it,” he stated regretfully.
According to our source, the issue that Obaseki raised was not so much about printing or borrowing of money, but what use these monies were being put to. He said printing of money, as a type of borrowing, by governments is not out of place.
“Government borrowing, quantitative easing or productivity expansion policies are not out of place. There are many tools available in the fiscal and monetary policy managers which printing money is part of. I perceive the outcry on Obaseki’s comment is the ‘Facts behind the Figures’. Basically, the people spending the money might not be at peace on what they are spending on,” he said.