Okonjo-Iweala and Jonathan’s profligacy

FORMER Finance Minister, Ngozi Okonjo-Iweala, touched a raw nerve recently when she recalled the profligacy of the immediate past Nigerian government. But, recanting a day later, she tried vainly to shift the blame to state governors. In the face of daily revelations of the financial banditry of the Goodluck Jonathan administration, her narrative only adds to the injury of Nigerians reeling from economic adversity caused largely by the corrupt government she served.

Speaking at a forum at the George Washington University, United States, she recalled that while the country was able to save $22 billion (referring to the Excess Crude Account), under former President Olusegun Obasanjo (1999-2007), whom she also served as Finance Minister, successive governments lacked the political will to save when oil prices were high. That statement was an admission of her own failure to exert a positive influence on a weak and vacillating president who practically handed over the economy to her with the novel title of Coordinating Minister for the Economy in addition to her Finance Minister portfolio

The direction of public discourse however changed when she caused a statement to be issued a day later that the zero political will to save under Jonathan was squarely the fault of the state governors whom she accused of opposing savings in the ECA and in the Sovereign Wealth Fund. “Rather, she was referring to what many Nigerians know: the strong opposition by some governors to the Jonathan government’s efforts to save in the Excess Crude Account and the Sovereign Wealth Fund sabotaged this important national priority,” the statement said.

This utterly specious statement insults public intelligence. It also flies in the face of facts. Jonathan’s government was profligate, wasteful and had zero, even sub-zero, political will to save. Attributing to Jonathan any serious “efforts to save” is a brazen, insolent attempt to rewrite history, an insult to the collective intelligence of Nigerians who are now bearing the brunt of his cluelessness.

Until mid-2014, when oil prices began to dip, that government benefitted from oil prices that hovered around $100 per barrel and above. Based on savings of the country’s share of oil revenues at prices above the annual budget anchor, the ECA ought to have risen between 2011 and early 2015.  As Charles Soludo and Oby Ezekwesili, former Central Bank of Nigeria Governor and Education Minister respectively under Obasanjo, reminded us, for some 72 months while he (Obasanjo) was in office, the “average monthly oil price was $38 per barrel and yet, he left $43 billion in foreign reserves.” But in the last five years to January 2015 while Okonjo-Iweala and Jonathan ruled the roost, they separately said, with average monthly price at $100pb, foreign reserves had been declining. Soludo said, “If the economy was better managed, our foreign reserves should have been between $102 billion and $118 billion before the fall in oil prices. As of now (January 2015), reserves should be around $90 billion.” Ezekwesili insisted that $22 billion was saved in the ECA and $45 billion in reserves. Okonjo-Iweala’s attempt to blame lower oil production then will not wash. Oil price benchmark was $75pb on 2.3mpd in 2011, $72pb on 2.48mpd in 2012; $79pb on 2.52mpd in 2013, and $77.5pb on 2.38mpd in 2014, while prices actually hovered around $100pb, making up for lower production.

Nigerians have a better memory than Okonjo-Iweala gives them credit for and remember vividly that state governors vigorously opposed Obasanjo’s saving plan too, but it was the then President’s determination that enabled the savings. Rotimi Amaechi, then governor of Rivers State, claimed that governors insisted on sharing what was left of the depleted ECA because they found that the Federal Government under Jonathan and Umaru Yar’Adua before him had been drawing from it without their knowledge. Remarkably, in a rebuttal she authorised on January 7, 2015 to Obasanjo’s lament of the squandering of $22 billion ECA, the Ministry of Finance said; “At the end of May 2007, Nigeria’s gross reserves stood at $43.13 billion – comprising the CBN’s external reserves of $31.5 billion, $9.43 billion in ECA, and $2.18 billion in Federal Government’s savings”. Curiously, at her Washington outing, she admitted, but did not specify when savings hit the often-quoted $22 billion mark.

According to Soludo, the Jonathan team did not save because it lacked the critical virtues of leadership and integrity. Okonjo-Iweala’s attempt to shift the blame for the fiscal recklessness of the government, of which she was the economic pivot, is diversionary. If the state governors were averse to saving – and we readily admit that they were and still are – did they stop her and Jonathan from doing so? The subsisting revenue sharing formula gives 52.68 per cent to the Federal Government; a government committed to “efforts to save in the excess crude account and the SWF” would have still saved its own share, irrespective of the profligacy of state governors.

Rather than the paragon of prudence she seeks to project of herself, Nigerians were shocked by her confession in December 2015 that she acceded to a request from Jonathan and released $322 million of the funds recovered from the loot stashed away by the late dictator, Sani Abacha, for arms procurement. Scandalous tales of un-appropriated money being taken directly from the CBN on Jonathan’s authorisation by officials who promptly proceeded to disburse them into non-government accounts, have continued to emerge; some cases have been charged to court. These cannot be attributed to lack of political will to save by governors. Her memo to Jonathan on the money said a portion was from the Future Generations window of the SWF.  But for an online report that provoked that confession, neither Nigerians nor the governors would have known that the government had begun raiding the SWF. Nigeria’s governors are notoriously wasteful and extravagant, but theirs paled in comparison to the excesses of the Jonathan government.

Just as the governors did not stop her and Jonathan from saving the federal share of the ECA, they did not force them either to deplete special funds or grant the waivers, exemptions and concessions that the Nigerian Customs Service said cost the country N1.4 trillion in the three years to 2014, in contradiction to her own claim of N170.7 billion for the same period. If what was happening under Jonathan was in conflict with her “high moral standards,” why did she not resign?

A country must confront the mistakes of the past to correct them and build a better future than the mess Jonathan and his team bequeathed. There is enough blame to go round: the governors may have been right on the constitutional ground that all revenues accruing to the federation be shared among the three tiers of government, but they are paying the price for it today, as the drastic fall in revenues has left them with no buffers and 27 states owing staff salaries.

Okonjo-Iweala is way off base if she thinks that she can talk herself out of that atrocious government. While the Jonathan government was frittering its oil resources and borrowing to sustain its profligacy, sanctions-hit Iran still managed to have reserves of $93.9 billion and SWF of $62 billion by December 2015; failing state, Libya, had $61.63 billion and $66 billion, and the United Arab Emirates $79.9 billion and $1.21 trillion compared to Nigeria’s $29 billion reserves and $2.9 billion SWF. No thanks to Jonathan and his imprudent government.

In sum, Okonjo-Iweala must give an unqualified, unambiguous apology to the Nigerian people for the wrongs and injustices done to them on her watch as the Finance Minister and Coordinating Minister for the Economy. Or else, she should just keep quiet!