In his
interview with ThisDay newspaper published last Sunday February 22nd, President
Jonathan accused former CBN Governor Charles Soludo of being political with his
claims that N30 trillion had gone missing under the watch of the Minister of
Finance, Dr Ngozi Okonjo-Iweala. What President Jonathan said about Soludo's
claims below and Soludo's response after the cut...
"So
you’ll see that there is a lot of politicking about some of the serious issues.
Not too long ago I read in one of the papers, I think Vanguard, that former
chief economic adviser to President Obasanjo who also went to become a CBN
governor… Soludo is a professor and first class material. Yes, making a first
class in economics, he is a brilliant person. His secondary school records are
fantastic. So by all standards he is a brilliant person. So the Vanguard wrote
that he accused Ngozi; that N30 trillion was stolen under the watch of Ngozi in
four years. Ngozi became a finance minister, let’s say from 2011 till date.
From that time till now, our annual budget is between N4.3 trillion and N4.9
trillion. So even if you put all together, it is about 18 plus trillion naira,
& not 30 trillion. The budget for these four years is
less than N20 trillion, but Soludo said that under Ngozi’s watch they stole N30
trillion. This is in the papers, social media, stored in the clouds and will
continue to be there. And when you type it in it will come out that during
President Jonathan’s time they stole N30 trillion. We asked Ngozi how her
colleagues in the World Bank saw the accusation and she said they were laughing
and couldn’t believe it. There are certain things that you just cannot believe
and if that is coming from somebody considered to be cerebral like Professor
Soludo, then of course you know what the ordinary person would say. It is all
political"President Jonathan said.
Professor Soludo reacted to this interview by releasing an article this evening. See it below...
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:
1. 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”.
2. 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.
3. 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.
4. 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!
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