How Buhari reshaped Nigeria, entrenched Northern/Muslim dominance
Muhammadu Buhari


As Nigeria’s political baton changes from one administration to another today, analysts are in agreement that harmonization of fiscal and monetary policies is critical to the efficient running of the economy.

They argue that the failure of President Mohammadu Buhari to forge a synergy between the fiscal and monetary authorities of his government resulted in huge budget deficits, which led to ballooning public debt and price instability among other macroeconomic consequences.

A typical example of the monetary and the fiscal policies misalignment, according to them, is the recent Central Bank of Nigeria (CBN) cashless policy, which was planned without consultations with the Ministry of Finance. The CBN withdrew cash from the citizens without recourse to government ministries, departments and agencies (MDAs), whose policies would be affected.

Another example, they cited, is the CBN’s restriction of 45 items, including milk and tomatoes, from accessing the official market for foreign exchange, saying the policy rendered the Minister of industry powerless in steering the productive sector of the economy.

Recently, Muda Yusuf, the CEO of the Centre for the Promotion of Private Enterprise (CPPE), bemoaned the conflicting policies between the Federal Ministry of Finance and the CBN; where an item that is not prohibited under the fiscal policy is blacklisted under import prohibition list and the apex bank’s forex exclusion list.

According to him, these trade policy conflicts by the fiscal and monetary authorities disrupt trade in Nigeria and portray the country as having two divergent trade policies.

Sometime in 2022, Jumoke Oduwole, Special Adviser to the President on Ease of Doing Business and Secretary to the Presidential Enabling Business Environment Council, reportedly lamented how some policies of the CBN interfered with and scuttled the successful implementation of some of her ease of doing business plans and recommendations.

Deficit financing

The Federal Government incurred a deficit spending of N36.8 trillion in eight years under the administration of President Buhari from 2015 to 2022. Analysis of data from the CBN on Federal Government finances from 2015 to 2022 revealed that 77 percent of the deficit spending occurred in the last four years, from 2019 to 2022

The data revealed that total revenue for the eight years stood at N32.05 trillion, while total expenditure during the period stood at N68.8 trillion, indicating deficit spending of N36.8 trillion.

In the first four years, 2015 to 2018, the government recorded N13.9 trillion as revenue but spent N24.3 trillion, resulting in deficit spending of N10.4 trillion. However, the deficit spending jumped by 60 per cent in the last four years, 2019 to 2022.

Compared to the previous four years, revenue rose by 31 percent to N18.2 trillion, while expenditure rose by 83 percent to N44.5trillion. Consequently, deficit spending rose to N26.4 trillion, translating to 60 percent increase when compared with the previous four years.

Further analysis showed that over 22 per cent of the eight year deficit spending was incurred in 2022 alone. During the year, the Federal Government’s revenue grew by 14.7 per cent to N5.05 trillion from N4.4 trillion in 2021, while expenditure stood at N13.4 trillion in 2022, up by 14.5 percent from N11.7 trillion in 2021. As a result, the government incurred N8.3 trillion as deficit spending, representing a 13.6 per cent increase from N7.3 trillion in 2021.

Fuel subsidy

A major factor behind the spike in deficit spending is the steady and sharp increase in fuel subsidy spending, which stood at N9.34 trillion in the eight years from 2015 to 2022. Analysis revealed that annual fuel subsidy spending shot up by 571 per cent to N4.39 trillion in 2022 from N654 billion in 2015.

Debt profile

Given that the N36.8 trillion deficit incurred in the eight year period was financed by borrowing, total debt stock, according to data from the Debt Management Office (DMO), rose sharply by 267 percent or N33.65 trillion to N46.25 trillion in 2022 from N12.6 trillion in 2015. This excludes the N23 trillion borrowed from CBN as Ways and Means.


Global consulting firm KPMG has projected that Nigeria’s unemployment rate would rise further to 40.6 percent in 2023. In a report titled ‘Global Economic Outlook’, the firm also said the inflation rate is predicted to remain above 20 per cent in 2023 due to structural and policy issues.

The National Bureau of Statistics (NBS) as of the fourth quarter of 2020 said that the country‘s unemployment rate stood at 33.3 percent. The statistics office in its latest inflation report disclosed that Nigeria’s inflation rate increased for the fourth consecutive month this year to 22.22 percent in April from the 22.04 percent recorded in March.

KPMG projects that unemployment is expected to continue to be a major challenge in 2023 due to the limited investment by the private sector, low industrialization, slower than required economic growth and, consequently, the inability of the economy to absorb the five million new entrants into the Nigerian job market every year.

IMF, World Bank’s positions

According to the World Bank, the rise in deficit spending as well as the huge debt stock will worsen except the government goes ahead with the proposed removal of fuel subsidy, even as it recommended other measures to strengthen the economy.

The World Bank stated in the Macro Poverty Outlook for Nigeria: April 2023 brief released last month: “The fiscal position deteriorated. In 2022, the cost of petrol subsidy increased from 0.7 percent to 2.3 percent of GDP. Low non-oil revenues and high-interest payments compounded fiscal pressures.

“The fiscal deficit was estimated at 5.0 per cent of GDP in 2022, breaching the stipulated limit for a federal fiscal deficit of three percent.

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“This has kept the public debt stock at over 38 percent of GDP and pushed the debt service to revenue ratio from 83.2 per cent in 2021 to 96.3 per cent in 2022.

“Fiscal and debt pressures will increase if the petrol subsidy is not phased out in June 2023, as envisaged in the 2023 Budget.”

The global lender had in November 2022 projected that debt servicing will gulp 123.4 percent of the Federal Government’s revenue in 2023.

Similarly, the International Monetary Fund (IMF), in its Nigeria: 2022 Article IV Consultation, stated: “Directors highlighted the need for bold fiscal reforms to create needed policy space, put public debt on sound footing, and reduce vulnerabilities.

“They urged the authorities to deliver on their commitment to remove fuel subsidies by mid-2023, and to increase well-targeted social spending.

“Strengthening revenue mobilization, including through tax administration reforms, expanding the tax automation system and strengthening taxpayer segmentation, and improving tax compliance is also a priority.”


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