Twenty-three of Nigeria’s 36 states have not paid their civil servants for months, while spending on capital projects has been frozen, in some cases since last year. In south-western Osun state, the situation is so bad that trade unions sought food and cash donations for workers before the Ramadan month of fasting.
This cash crunch is partly the result of how Africa’s most populous nation functions politically: proceeds from oil, company taxes and import duties are paid into a central pool and every state sends a representative to the capital each month to collect a share.
Because Nigeria’s economy is so dependent on oil, which accounts for around 80% of government revenues, this method of distributing income means that global oil prices can have dire consequences for Nigerians.
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