Guess
the season of long articles is back???
This report is courtesy of a popular media platform in SR…read it after the cut…
My attention has been drawn this
morning to an article entitled: “Jonathan Replies Soludo over “missing N30
trillion” claim”--- extracting from Mr. President’s interview as published by
Thisday newspaper. ThisDay quoted Mr. President as saying that “Soludo said
that under Ngozi’s watch they stole N30 trillion” but that since the sum of the
federal budget over the last four years was less than N30 trillion, such an
amount could not have been “stolen”. According to the President, “it is all
political”. I had earlier stated that I would not make further comments on the
issues until probably after the elections but since Mr. President has decided
to join the fray, I am constrained to make a further brief clarification. For
me, President Jonathan is a gentleman and a friend but I have a fundamental
disagreement on his management of the economy. On the issues at stake, I
believe that the pressures of office and the hectic electioneering campaigns
have not allowed him time to read my articles or that his staff have not
explained the contents to him hence he totally missed the point in his
comments. For the avoidance of doubt, let me clarify as follows:
In my article entitled “Ngozi
Okonjo-Iweala and the Missing Trillions”, I presented some rough calculations
covering: oil theft, money that ought to accrue to stock of foreign reserves,
unbudgeted oil subsidy payments, customs duty waivers, leakages through the
self-financing government parastatals, unremitted sums by NNPC, etc. I
concluded that section of my article by noting that: “I have a long list but
let me wait for now. I do not want to talk about other ‘black pots’ that
impinge on national security. My estimate, Madam, is that probably more than
N30 trillion has either been stolen or lost or unaccounted for or simply
mismanaged under your watchful eyes in the past four years”.
It is evident that the monies I
referred to are “off-budget”. These are monies that did not make it to the
budget. I find it funny that the Government deliberately avoided the issues
raised above but instead has sought to divert attention by focusing on the
“federal budget”. Let me state for the record that I believe that the amount of
resources that are either stolen from the economy or out-rightly mismanaged by
government far exceeds the federal budget per annum. Ours is about a N100
trillion economy, and I will be shocked if the government pretends that it does
not know that currently about 10% of the GDP falls into a ‘black hole’ on
annual basis. We have not added figures based on counterfactual analysis such
as the cost to the aggregate economy of bad or misguided economic policy. For
example, in today’s Thisday newspaper, a headline news reports that “Aliko
Dangote, Africa’s Richest Man, Loses $7.8 Billion as Naira, Stocks Plunge”
while reporting that “In dollar terms, the devaluation has knocked more than
$40 billion off the value of Nigeria’s economy”. Of course, most people
predicted that oil prices would soon fall but we were caught unprepared, and
today, the parallel market exchange rate is N225 to the dollar. Thus, the kind
of analysis in today’s Thisday is just one little example of the kind of
collateral damages--‘costs’ or ‘losses’-- that mismanagement foists on the
system. To repeat, my article did not focus on the federal budget: the
mismanagement of the consumption budget and its unprecedented debt accumulation
(with low value-for-money expenditures) are entirely different matters.
What I found particularly
disconcerting as a Nigerian from the comments I read is the fixation to
validation from the World Bank. According to Mr. President, “we asked the Minister
how her colleagues at the World Bank saw the accusation”. I shook my head in
disbelief. It is instructive that no one asked what Nigerians thought or ‘how
Nigerians saw it’ but rather what was important to government was the
impression of the World Bank. If this is the mind-set of our leaders, then
ordinary citizens have real cause to worry. Well, I have read several editorial
comments of Nigerian media and they do not agree with the ‘impression’ of the
World Bank official. I read a similar comment by a high government official
stating that World Bank officials and CNN had told them that government was
doing well and therefore who else could question them. But neither the World
Bank nor CNN conducts comprehensive independent surveys on the economy--- they
comment based on the data they are given--- and their subjective “opinions”
cannot substitute for hard facts. The World Bank is not a statistical agency. I
can provide a long list of countries that World Bank reports praised as ‘star
performers’ and they slumped into deep crisis almost immediately after. Check
out the World Bank and IMF reports on the US and other countries’ economies
shortly before the unprecedented global financial and economic crisis in fifty
years (the Great Recession of 2008/09). Actually for many countries once they
start getting such ‘praises’, then perceptive officials begin to worry. Nigeria
is probably the only country where its government officials quote the World
Bank while ignoring data from its own statistical agency!
A serious concern is that while
government relies on external validation (opinion) as ‘proof’ of its
performance, it is selective in the process—accepting the positive ones and
disparaging the negative ones. Our recent exchanges illustrate the point. In my
first article (26th January): “Buhari Vs Jonathan: Beyond the Elections”, I
argued that “the economy seems to be on auto pilot, with confusion as to who is
in charge, and government largely as a constraint. There are no big ideas, and
it is difficult to see where economic policy is headed to. My thesis is that
the Nigerian economy, if properly managed, should have been growing at an
annual rate of about 12% given the oil boom, and poverty and unemployment
should have fallen dramatically over the last five years”. No one has credibly
challenged the above, except what the Financial Times of London described as a
“furious response by the Minister”. But, the influential Economist Magazine of
London and New York Times agreed with us. According to the Economist editorial
(7th February, 2015):
“… as Africa’s biggest economy
stages its most important election since the restoration of civilian rule in
1999, and perhaps since the civil war four decades ago, Nigerians must pick
between the incumbent, Goodluck Jonathan, who has proved an utter failure, and
the opposition leader, Muhammadu Buhari….The single bright spot of his rule has
been Nigeria’s economy, one of the world’s fastest-growing. Yet that is largely
despite the government rather than because of it, and falling oil prices will
temper the boom. The prosperity has not been broadly shared: under Mr Jonathan
poverty has increased. Nigerians typically die eight years younger than their
poorer neighbours in nearby Ghana”. I gave the Government an “F” grade on economic
management, and the Economist described its performance as “utter failure”. The
Economist also basically agreed with me that the re-basing of the economy and
its observed ‘growth’ have nothing to do with government policy. Again,
government has not credibly challenged the above or is the Economist’s view
also ‘all political ’? Government simply waved it off. My point is that if
Government has to rely on the “impressions” of external bodies, then it should
be consistent and comprehensive.
In conclusion, let me re-state
that I firmly stand by my earlier statements. These are weighty statements
which I weighed carefully before issuing. I appreciate that this is an election
time and so attempts would be made to trivialize, or either play politics with,
or divert attention from, them. In a serious society, we should have had a good
debate on these matters as they could provide some of the building blocks in
trying to pick the pieces after the elections. Part of our citizen duty in a
democracy is to raise such issues and demand for answers. In the meantime, I
grant that our leaders are busy with campaigns but these issues won’t go away
until we have a transparent resolution. Be assured that after the elections, we
will be back with even more questions!
0 comments:
Post a Comment