Okonjo-Iweala mismanaged Nigeria's economy -----Oshiomhole
Governor Adams Oshiomhole of Edo State has accused the
Minister of Finance and Coordinating Minister of the Economy, Dr Ngozi Okonjo-Iweala
of mismanaging of the nation’s economy in the last four years and feeding
Nigerians with half-truths.
According to the governor in an article to review the nation’s
economy in the last four years, Okonjo-Iweala ran the Excess Crude Account as if
running a one-man show, saying Okonjo-Iweala’s recent outcry that oil marketers
were falsifying subsidy claims might have been done in fear of the incoming
President Muhammadu Buhari.
The governor wrote: “As the country transits from one
democratic dispensation to another, there is no gainsaying that the state of
the nation’s economy is the focal point, especially with the unending fuel
scarcity which is gradually grinding the nation to a halt. No doubt, the best
person to explain the state of the economy today is Dr Ngozi Okonjo-Iweala, Minister of Finance and Coordinating Minister of the Economy, whose management
of the nation’s resources in these past four years has elicited different
reactions from Nigerians.
“As a member of the National Economic Council, I had spoken
out at different times at NEC meetings and even in public on the way the
economy is managed under Dr Okonjo-Iweala, again, I want to share my views with
the public on some of the issues affecting the Nigerian nation.
“Recently, Dr. Ngozi Okonjo-Iweala, the Honourable Minister
of Finance and Coordinating Minister for the Economy
“This latter day “policy activism” on her part deserves
closer scrutiny and interrogation. Perhaps for fear of the incoming President,
Gen. Muhammadu Buhari, come May 29, 2015, Dr. Okonjo-Iweala is now compelled to
disclose to Nigerians that a cabal is holding the country and the government to
ransom. Beside the abuse of the subsidy
regime, we will insist that Dr. Okonjo-Iweala also comes clean on some other
critical issues that demand accountability from her and her office.
“According to Dr. Okonjo-Iweala, after paying N156 billion to the oil marketers, the
marketers came with another claim of N200
billion, which includes a N159 billion
coming not from actual supply of fuel but from exchange rate
differentials. This resulted in a
prolonged bickering that led to the current nation-wide fuel scarcity and total
black-out.
“The question to ask is: how come that it is now, for the
first time, that we are hearing from the Minister of Finance about fraudulent
claims by the oil marketers amounting to billions of Naira? At what point did
the Minister of Finance and CME realize that these fraudulent and similar
claims are going on? When did it start? Is it just recently or it has been
going on all along? These questions are pertinent because we know that if the
Petroleum Products Pricing Regulatory Agency (PPPRA) were doing its work
diligently, all claims by oil marketers would be vetted on a daily basis before
their payments are processed by the Ministry of Finance. Hence, there should be
no dispute about the amount due to oil marketers at any point in time.
“What the foregoing, therefore, suggests is that all along,
PPPRA, the Ministry of Finance and the oil marketers have been involved in an
unholy alliance, in the mismanagement of the fuel subsidy regime and in the
process defrauding the nation of its revenues.
“The Minister of Finance cannot stop at simply shedding
crocodile tears about fraudulent claims by oil marketers. Having found her
voice, thanks to the fear of Gen. Buhari, it is very necessary that Dr. Ngozi Okonjo-Iweala takes one more crucial
step at full disclosure. She must disclose to the nation the full details of
subsidy payments made to oil marketers in the last four years, including the
parameters used to calculate the subsidies. This also must include how much of
the subsidy was paid to the NNPC since the NNPC is also being accused of making
the same fraudulent claims. In other words, the Minister of Finance should be
prepared to provide more information and make more explanations regarding the
management or mismanagement of subsidy payments in the last four years.
“The squandering of the Excess Crude Account (ECA) is
another area in which the Minister of Finance should come out, shed more light
and put all the cards on the table. During several meetings of the National
Economic Council (NEC), which has all the governors as members and with the
Vice-President as Chairman, I had cause to observe that the State Governments,
who are joint owners of the ECA, with the Federal Government, were not being
adequately briefed on the status of the Account.
“Accordingly, I had consistently demanded from the Minister
of Finance a transparent and periodic disclosure of accruals to the ECA, at
least on monthly basis. I had argued that even village associations do make
available their financial statements from time to time, and as NEC, I see no
reason why we will not even do better. All these years, my pleas fell on deaf
ears. The Minister of Finance consistently failed to apprise the NEC with
critical information on the management and operations of the ECA in black and
white, when she eventually got to do that, it was usually verbal and casual,
and hardly meaningful enough for decision-making.
“The Minister of Finance had also developed the penchant for
deliberately avoiding NEC’s crucial meetings, which many saw as a ploy to keep
the governors in the dark. And when she is not around, no one gets any
information, as if she was running a one-man show.
“Coming to the specifics, it is interesting to note that by
December 2012 the ECA had a balance of over $10 billion. This has been depleted
to $2.07 billion by May 2015, according to the Finance Minister. Between
January 2013 and May 2015, not more than $4 billion was shared from the ECA.
Indeed, the last time any money was shared from the ECA was in May 2013.
“For six clear months in 2013, NEC did not meet, an act many
believed was contrived to conceal information on the operations of the ECA.
When eventually NEC met after those six months, the Minister of Finance
reported that the ECA had dropped to $4 billion. This prompted me to ask a very
pertinent question: if the closing balance of the ECA as at December 2012 was
over $10 billion and that for three years running Nigeria’s budget have been
based on the average of between $77 and $79 benchmark while the average price
of Nigeria’s crude has been $108 per barrel, suggesting an average of about $30
per barrel, how come that there was no accretion to the ECA? Indeed, based on a
rough estimate, we should be expecting not less than $30 billion accretion
based on the official oil exports of 2.3 million barrels per day. The question
which Dr. Okonjo-Iweala should answer, therefore, is why did Nigeria not make
any savings during the unprecedented boom years from 2011 to August 2014?
“The explanation offered by the Minister of Finance, which
was as usual oral, and of course, far from satisfactory, was hinged on three factors,
namely: (a) because of oil theft not much accrued to the ECA; (b) part of ECA
was also used to fund petroleum subsidy and SURE-P; and (c) part of the ECA was
also shared to the three tiers of government at the request of the state
governments. Her claims in my view are untenable, fraudulent, illegal,
unconstitutional and clear breach of extant financial regulations.
“In the first place, ECA is not an exclusive preserve of the
Federal Government. It belongs to all the tiers of government: federal, state
and local governments. Moreover, the Minister of Finance has no power
whatsoever to spend monies without the express consent and approval of the
State Governments. Until questions were asked as to the status of the ECA, no
State Government was put in the picture about the fact that money was taken
from the ECA, why it was; and for what purpose.
“It is also a fact known to all that under the 1999
Constitution (as amended), only the National Assembly (NASS) has the power to
appropriate monies for subsidy. Similarly, nobody spends money that is not
appropriated or in excess of what was appropriated without recourse to NASS.
And with regards to funding subsidies and SURE-P from ECA, there was no
indication anywhere that NASS authorised the use of ECA for that purpose. The amount in question is also evidently far
in excess of what the country can consume of petroleum products, even if every
Nigerian is a consumer of petroleum products. In this regard, therefore, the
Minister of Finance has a lot of explanation to make, particularly in the
manner she knowingly enriched oil marketers and condoned abuse of due process
in the operations of ECA.
“Regarding the funding of SURE-P, the understanding from the
outset was that SURE-P would be funded from the difference between new and old
price of petroleum products, after the partial removal of the subsidies in
2012. Why the Minister should fund SURE-P from the ECA is inexplicable, because
it is a complete violation of the law and due process. In this regard, it is
necessary that Dr. Okonjo-Iweala makes available to the nation SURE-P’s
financial statements, indicating clearly the sources and uses of funds.
“The Minister of Finance also made allusion to the sharing
of the ECA as requested by the State Governments. This is obviously one-sided
and being economical with the truth. What Nigerians are asking is not what was
shared but the whole story about the operations of the ECA itself. At any rate,
considering that not more than $4 billion was shared, this is not adequate to
explain how the country went from $22 billion at the end of 2007 to the current
paltry $2.07 billion balance in the ECA in 2015, bearing in mind, the oil boom
period from 2011 to 2014. For the sake
of transparency and accountability Dr. Okonjo-Iweala has a duty to herself, to
the nation and the international community to account for what transpired in
the ECA by giving full disclosure of how much accrued to ECA on a
month-by-month basis and the subsequent outflows.
“On the question of oil theft, I can proudly say I was among
those whose probing questions compelled NEC to set up a Committee to
investigate the problem of crude oil theft. It became quite apparent in our
interaction with security agencies that crude oil theft has indeed, become official.
Some of the military officers confessed that whenever they apprehend oil
thieves on the high sea, a telephone call from above will compromise all their
efforts. When we suggested that any ship caught in the act be immediately
destroyed, we were told that that will pollute the waters. Hence, till date not
a single person was caught or prosecuted on account of this heinous crime
against the nation.
“I recall during one of NEC’s meetings with the
Vice-President presiding, one of the Governors was on record, as having
expressed concerns that the inability of the government to deal with oil theft
might be because the proceeds of such a crime flow into political coffers as
one of the means to compromise the 2015 election. Still, under her watch the
problem persisted; the country keeps hemorrhaging and all we get are banal excuses
and obfuscation of our concrete realities.
“The recent nationwide fuel and energy crisis, adjudged the
worst in the economic history of Nigeria, is merely a reflection of the gross
mismanagement of the economy which characterized Dr. Okonjo-Iweala’s tenure
since 2011. As we speak, there is a
widespread and popular feeling that she has presided over the wanton
mismanagement of the Nigerian economy since the inauguration of the democratic
order in 1999. Aspects of this could be seen from the reckless borrowing and
debt accumulation since 2011, as well as the manner in which government’s
recurrent budget has been continuously funded through borrowings, while about a
quarter of the national budget is allocated to debt servicing.
“Under Dr. Okonjo-Iweala, government borrowings were
programmed to support wasteful expenditures. In the same vein, budgets were so
poorly formulated and skewed towards consumption such that 90% of budgetary
releases were meant for recurrent expenditures, which is injurious to the
economy.
“There is the urgent need to launch an audit trail of the
sources and uses of the borrowed funds we have accumulated in the last five
years amounting to over N8 trillion. It
does not make sense to accumulate such huge debts without a tangible
infrastructure project that we can point to as evidence of fund utilization.
“Dr. Okonjo-Iweala was quick to blame state governments for
not paying salaries but the situation with the federal government employees is
even worse. Things have gone so bad that even salaries of federal employees
have to be paid by recourse to irresponsible borrowing from the capital
markets.
“Let me state for the record at this juncture that while Dr.
Okonjo-Iweala, as Minister of Finance is borrowing recklessly to pay salaries
of federal employees, in Edo State we are paying salaries as and when due,
including teachers employed by Local Government Councils without recourse to
borrowing.
“The implication of this reckless borrowing on the part of Dr.
Okonjo-Iweala is that the future of workers’ savings in the form of pensions is
clearly at stake. It means that there is no guarantee that workers and
pensioners will have value for their hard-earned savings in the future. In the first place, she has effectively
withdrawn the entire savings of workers meant for pensions through issuance of
bonds to fund payment of workers’ salaries and other wasteful spending.
Secondly, excessive borrowing has devalued the Naira. At the time Dr. Ngozi
assumed duty, the exchange rate was within the region of N100-N116 to one dollar,
now it has been officially devalued to about N200
to one dollar. This has done incalculable damage to the value of savings of the
pensioners, and when inflation is factored in, it is clear that by the time the
Nigerian pensioner accesses his savings, the value will have been drastically
reduced, no thanks to the gross mismanagement of the Nigerian economy by the
Minister of Finance.
“In this regard, the Minister should swallow her pride and
admit that her tenure as Minister of Finance is a total disaster and colossal
failure as far as economic management is concerned. In the same vein, given her
so-called background as an international bureaucrat with the World Bank, our
present sordid economic realities present a huge embarrassment to the country,
particularly her penchant for violating financial regulations and all tenets of
fiscal responsibility.
“Finally, I will like to briefly touch on the Sovereign
Wealth Fund. It is understood from the law establishing the SWF that the State
Governments are part of the decision-making regarding the operations of the
Fund. However, till date, no State Government has any idea about how the Fund
operates or how it is managed. Like the ECA, its management is opaque.
“The only information we stumbled upon as State Governments
is that the Minister of Finance had unilaterally and without recourse to NEC
and the State Governments, withdrawn money from the SWF to fund consultancy
services in the name of the Second Niger Bridge. In this regard, I wish to
remind the Minister of Finance that before she leaves the stage, she is duty
bound to inform the State Governments, as critical stakeholders about the financial
status of the SWF backed up by convincing evidence.
“There is too much of secrecy surrounding the management of
our public finance. The earlier the Finance Minister comes clean on the
management of our financial resources, the better for all of us, so that the
incoming government will derive the baseline from which to launch its economic
recovery strategies to combat our present morass. This is the irreducible
minimum that is expected of any Minister of Finance worth his/her salt.
Otherwise, for now, Dr. Okonjo-Iweala’s tenure is a bile in the dish.”
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