Financial crisis at Nigerian embassies as FG delays cash

The chancery and the homes of diplomats and staff are under threat, and they must borrow money.

According to an ex-envoy, missions should receive funding in foreign currency.

Due to the Federal Government’s delay in releasing their capital and overhead payments, the Nigerian foreign embassies are currently in financial trouble.

The missions are in a desperate situation as of Saturday kuryaloaded discovery that the overhead vote for the second half of 2023, which should have been paid since June, is still unpaid.

Our source confirmed that the 109 Diplomatic Missions, which comprise 97 Embassies and 12 Consulates around the world, are concerned about the impact of the financial crisis on the running of the missions and the welfare of the workers.

Several missions may not be able to meet their financial obligations to their staff members and local contractors in the upcoming weeks, according to sources who spoke with our correspondent on Friday.

It was discovered that a number of debts, such as utility, water, and sanitation bills, were already piling up.

According to reports, anxious embassy employees stationed in Europe, Asia, and other continents are sending worried messages to their coworkers at the ministry’s Abuja headquarters.

According to a source, “The Federal Government has not paid overhead allocation to missions that ought to have been utilized to settle various utility bills, chancery rent, staff housing, energy, sanitation, and water bills.

“Since June, the vote intended for the second half of the year should have been paid. There was no reaction to the ministry’s dispatches from numerous missions.

The inadequate funding for diplomatic missions and the widespread complaints about the lack of budgetary votes, which significantly hampered their operations, were both covered by this journal.

The MFA released $270,000 for personnel overhead to a mission in Asia for the period of January to June, our correspondent learned at the beginning of the year.

However, Saturday kuryaloaded discovered that for the second half of the year, only $164,000 instead of $270,000 was provided to the mission, amounting to a 41% shortfall.

There have been claims that the government must have based the remittance on the current exchange rate, which is set at roughly N900 per dollar, even though the foreign affairs ministry could not provide explanations for the gap.

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Even the grossly insufficient finances included in the 2023 Budget are now impacted by the new exchange rate policy of floating the currency adopted by the Central Bank of Nigeria, an official said. “The truth remains that Nigerian Missions are not properly funded,” the official added.

“Missions that received $590,000 and $383,000 in personnel allocation for the first half of the year were given $353,000 and $252,000, respectively, as personnel vote for the second half of the year,” a diplomat stated when explaining how the changing exchange rate had affected the remittance to the embassies.

“Under the current circumstances, most embassies may not be able to meet other financial obligations, such as paying rent and school fees for children, electricity, water, telephone, and security bills, or pay salaries and entitlements for officers, locally recruited staff members, and contractors. This is especially true if the government continues to withhold overhead and capital allocations.

“The implication is that staff members of the embassies and consulates abroad would suffer financial embarrassment which would be detrimental to the image of our country if nothing is urgently done to salvage the situation,” the statement reads.

It was learned that most missions typically divert the personnel vote to pay for staff housing and educational expenses for their offspring and wards because the overhead vote is insufficient.

The FG had not yet paid his mission’s capital vote, a Foreign Service officer revealed, saying that this had put the employees in a difficult situation since they were about to be evicted by their landlords.

While some missions deal directly with the landlords, he added that his mission preferred to give the personnel the funds to pay their landlords.

The FSO, who requested anonymity out of fear of retaliation, described his situation over the phone. He stated, “Staff housing rent and their children’s tuition were supposed to be paid from the overhead vote but this has not been done because the government has neglected to deliver the money.

“Some of us had to borrow money from Nigerian friends and relatives to keep our landlords from evicting us. We deposit 12 checks to cover a year’s worth of rent because we pay monthly, and the banks then credit the landlord on a monthly basis.

However, if you don’t have money in your account, the bank might report you to their regulating body because issuing a check without cash backing is against the law. Due to unpaid rent, many of our employees have been kicked out of their homes. Some Nigerian employees were kicked out of their apartments in Budapest, Hungary, in 2021 because they didn’t pay their rent.

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There are instances where diplomats borrow money to pay their rent and school costs in order to avoid being evicted. Some people borrow money from their friends in Nigeria, the local Nigerian churches they visit, or the Nigerian community.

“Although some officials have returned to Nigeria, their rent has not yet been paid. In some cases, embassies pay their landlords directly, and some landlords have the right to evict diplomatic employees for nonpayment. To avoid any humiliating behavior from their landlords, most people pay for housing with their earnings.

“And now that the ambassadors have been called back, they may gorge themselves on the money. Some might want to utilize the funds to mark their final July 4th in office.

“The ‘first 28 days allowance’ relocation grant, which was intended for freshly posted personnel, has not been paid. Most rented chanceries ran the possibility of being evicted if the rent was not paid, he said.

When Yusuf Yakubu, the chair of the 9th Assembly’s House Committee on Foreign Affairs, bemoaned the mistreatment of Nigerians overseas in November 2020, the then-minister of foreign affairs, Geoffrey Onyeama, attributed it to the underfunding of foreign missions.

Onyeama claimed that their ability to respond to the complex structure of diplomatic services was being hampered by the inadequate funding allocations.

The ministry and the missions received N98.11 billion in the 2023 Budget for their daily activities.

Of the total, N62.30 billion was spent on staff costs, N31.12 billion on overhead, and N4.68 billion was spent on capital improvements.

The staff cost for the ministry and mission in 2022 was N49.22 billion, with 98 percent of that amount going to the ministry.

N23.01 billion was allocated for overhead, of which 100% was given to the mission and 58% was freed from the ministry.

Additionally, the ministry and the missions have already received 50% of the N7.61 billion designated for capital expenses.

78% of the MFA’s N83.4 billion budget, or N65.1 billion, was set aside for foreign missions in 2021.

Due to the COVID-19 epidemic, the vote for the ministry’s N75.4 billion budget for 2020 was initially reduced from N62 billion to N60.2 billion.

The allocation for foreign missions was N4.1 billion in 2019 and N11.3 billion in 2018, respectively, out of the country’s proposed budget of N8.9 trillion, a 13% reduction. The proposed budget for the nation at the time was N8.6 trillion.

The Federal Government stated it was closing its embassies in Sri Lanka, the Czech Republic, and the Republic of Serbia due to a lack of funding, while downsizing another.

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After Saturday kuryaloadedreached out to Amb Yusuf Tuggar, the minister of foreign affairs, regarding the issue, Alkasim Abdulkadir, the minister’s special adviser on media and communications strategy, contacted us and asked to speak with him during the week.

“I received your mail with relation to this inquiry from the Minister of Foreign Affairs. For input on this, you can get in touch with me during the week, Abdulkadir said in a message to our correspondent.

Additionally, calls and messages requesting comments on the missions’ financial difficulties were not returned from the Permanent Secretary, Amb. Adamu Lamuwa, or the ministry’s spokeswoman, Francisca Omayuli.

Rashid Akinkuolie, a retired diplomat, encouraged the government to change the budgetary allocation for the missions from naira to dollars because this was the only way to remedy the problem.

Akinkuolie said the financial situation at the missions was a recurring problem and that many officials and diplomats were frequently due back pay and other benefits.

He declared, “It is a recurring problem; it does not only occur now. Their vote is translated into dollars, euros, pounds, and other foreign currencies, which is a concern because it results in devaluation and other problems. Sometimes they are unable to pay salaries within two or three months, as well as their utility payments, local employees, and other obligations.

“Paying them in foreign currency is the only solution to the problem. The voting should be conducted in dollars as the solution, however there are issues if you use naira. The funding for the mission shouldn’t be expressed in naira because the wages and operating expenses are fixed.

To prevent the value from declining, “the cost of operating the headquarters should be in naira while the cost of operating the missions should be in dollars.”

Meanwhile, Prof. Bolaji Akinyemi, a former minister of external affairs, mentioned the underfunding of Nigerian embassies in a recent interview on Arise News TV.

He said, “South Africa has two of the superpowers (China and Russia) on its side. This is against the backdrop of the BRICS Summit in South Africa and the need for Nigeria to develop its foreign policy and contacts. They now want to utilize that to corner Nigeria. At this point, we advocate for the closure of embassies. Our embassies lack adequate funding.

“There are fine people working in that ministry (of foreign affairs) and decent ambassadors who are willing to give it their all, but you cannot clap with one hand; you cannot carry out your duties if you are not properly funded. Even though South Africa keeps opening embassies and giving out food, we still see South Africa as our enemy.

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