Why Nigeria's government spending has little impact

There has been another round of discussions on the government's financial position.

Last month, money printing activities were in the spotlight. More recently, though, there have been two major news stories. The first started from a letter from the Nigerian National Petroleum Corporation (NNPC). Nigeria's oil company wrote to the Accountant General of the Federation stating that they won't make any FAAC contributions in May. 

This letter spooked the country as Nigeria's states rely on FAAC for most of their spending, including salaries. On average, states depend on monthly FAAC for 70% of their revenues. 

The second story came from Aso Rock. President Buhari asked the salaries and wages committee to review the payroll of public servants. It was a signal that the Villa wants to reduce its recurrent expenditure. The government is also considering merging some ministries and departments to cut costs. The Director-General of the Budget Office, Mr