Nigerian leader Buhari says Treasury ‘virtually empty’, country in billions of dollars in debt

“It’s just saying the obvious. We all know about the reckless abandon with which the last regime carried out its affairs” - lecturer Akintola Owolabi

NIGERIAN President Muhammadu Buhari, who took office last month, said his government is facing severe financial strain from a Treasury that’s “virtually empty” and billions of dollars in debts.

The government is under “so much pressure” that it’s unable to even regularly pay some state workers, Buhari told reporters on Monday in the capital, Abuja. “This is the bad management that we find ourselves in.”

Buhari has yet to name a cabinet since being sworn in as president of Africa’s largest economy on May 29 after defeating Goodluck Jonathan in elections.

He took over as a plunge in crude prices forced the government to scale back budgeted spending and devalue the naira while foreign-currency reserves fell. The government relies on crude for about 70% of its income.

“It’s just saying the obvious,” said Akintola Owolabi, a senior lecturer of accounting and finance at Lagos Business School. “We all know about the reckless abandon with which the last regime carried out its affairs.”

Former military ruler Buhari, 72, swept Jonathan from office in March elections by pledging to end endemic corruption and Boko Haram’s rebellion in the north that has killed thousands in its six-year campaign to impose its version of Shariah law.

The central bank has been using its foreign reserves, which fell to $29 billion as of June 18 from $34.5 billion at the start of 2015, to help defend the local currency.

Still, the naira has declined 7.8% against the dollar over the same period.

Growth in the economy is forecast by the International Monetary Fund (IMF) to slow to 4.8% this year from 6.3% last year.

-Bloomberg

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