Jonathan is not a reckless spender –FG

Goodluck Jonathan

The Federal Government on Sunday blasted a former Vice-President (Africa), World Bank, Dr. Oby Ezekwesili, for alleging that the Umaru Yar’Adua and President Goodluck Jonathan administrations squandered foreign reserves of about $67bn, describing the statement as factually incorrect and outlandish.

Minister of Information, Mr. Labaran Maku, made the Federal Government’s position known at a press conference in Abuja.

Maku was  at the briefing with the Special Adviser to the President on Performance Monitoring, Prof. Sylvester Monye; Chief Economic Adviser to the President, Prof. Nwanze Okedigbo; and the Senior Special Assistant to the President on Public Affairs, Dr. Doyin Okupe.

Ezekwesili had on Thursday at the convocation lecture of the University of Nigeria, Nsukka, said the two administrations needed to tell Nigerians how they spent the $45bn left in the foreign reserves account and $22bn in the Excess Crude Account by the former President Olusegun Obasanjo administration.

Ezekwesili, who was Minister of Solid Minerals and Education under Obasanjo, said Nigerians had lost dignity because of ravaging poverty arising from poor choices of the elite, corruption and lack of investment in education.

Noting that the country had enjoyed five cycles of oil boom, she decried the failure to convert oil income to renewable assets through training of human capital, development of other sectors and investment in foreign assets as other resource-rich countries did with their oil income.

But Maku said the former minister’s statement betrayed “a surprisingly limited understanding of government finances.”

He said Ezekwesili’s statement was more curious considering the fact that she had held senior positions in government and World Bank.

Maku said, “The statement by the former World Bank vice-president that the governments of Presidents Musa Yar’Adua and Goodluck Jonathan have squandered $67bn in reserves (including $45 bn in external reserves and $22 bn in the Excess Crude Account) left by the Obasanjo administration at the end of the May 2007 is factually incorrect.

“At the end of May 2007, Nigeria’s gross reserves stood at $43.13bn-comprising  external reserves of $31.5bn, $9.43bn in the Excess Crude Account and $2.18bn in the Federal Government’s savings.

“These figures can be independently verified from the CBN’s records. The figure of $67bn alleged in her statement is therefore clearly fictitious.”

Maku explained that since Obasanjo left office, the reserves had experienced fluctuations rising from $43.13bn in May 2007 and peaking at $62bn in September 2008 during the Yar’adua/Jonathan administration when oil prices peaked at $147 per barrel.

He added that the reserves fell subsequently to $31.7bn in September  2011, a situation which he attributed to the global financial crisis, which according to him, caused the CBN interventions in the currency market to defend the value of the naira.

The minister explained that the Excess crude savings were also used to stimulate the economy at the height of the global financial crisis to the tune of about $1bn, representing 0.5 per cent of the nation’s 2009 Gross Domestic Product.

He recalled that Nigeria was one of the few countries in the world that did not seek assistance from international financial institutions.

Maku added that the fiscal stimulus used to shore up the economy during the period was shared by all the three tiers of government, including commitments of about $5.5bn made under the Obasanjo administration for power projects.

He said, “On the issue of reserves, it is fallacious to say that the nation’s external reserves were dipped into or misapplied by the Federal Government. It is important to note that the Federal Government cannot dip its hands into external reserves.

“Like in other countries, the management of external reserves is one of the statutory mandates of the Central Bank of Nigeria.”

The minister cited  Section 2(c) of the CBN Act (2007) that states that the bank shall maintain external reserves to safeguard the international value of the legal tender currency.

He insisted that no President since the democratic dispensation had contravened the Act.

Maku explained that other uses of the reserves were to settle both public and private sector foreign currency obligations of Nigeria, including the importation of goods such as equipment for power sector.

He said whenever a ministry or agency needed to incur approved expenditure in foreign currency, it must provide the naira equivalent to the CBN before the bank sells the required foreign currency.

This, he said, Ezekwesili, as a former World Bank Vice-President for Africa must have known.

The minister said while no one was disputing that Nigeria still faced challenges most of which were built up over a long time, Nigerians needed to acknowledge the achievements of the present administration in the aftermath of difficult but necessary macroeconomic and structural reforms being implemented.

He said the Jonathan administration was focused on promoting a stable, non-inflationary and inclusive economic environment for Nigeria to ensure that Nigerians could live better and more fulfilled lives.

Maku said the administration had restored macroeconomic stability against the backdrop of global economic uncertainty, slow growth in the United States and high unemployment and unsustainable debt in Europe.

While saying that Nigeria’s economy grew by about 6.4 per cent in the first three quarters of 2012, the minister added that it was set to continue at a similar pace in 2013 according to independent forecasts.

He said the government had reduced the country’s fiscal deficit to only 2.17 per cent of GDP in the 2013 budget while rebalancing its spending in favour of capital expenditure.

These achievements, he added, had already received endorsement from international rating agencies.

Maku  said at a time when many advanced and emerging markets were being downgraded, Fitch and S&P had upgraded the nation’s sovereign country ratings.

He added that the inclusion of Nigeria’s sovereign bonds in the emerging market bond indices of JP Morgan and Barclays also testified to the growing confidence of the international investment community in the economy.

Also, Special Adviser to President Goodluck Jonathan on Political Affairs, Mr. Ahmed Gulak, accused the Olusegun Obasanjo Administration of wasting $16bn on power supply.

Gulak was  reacting to Ezekwesili’s statement.,

However,  an aide of former President Olusegun Obasanjo, who asked not to be named, said, “He (Gulak) must be ignorant. Everybody knows that former President Olusegun Obasanjo’s power project had led to the improvement of power supply in the country.”

Gulak, in an interview with one of  our correspondents in Abuja, claimed that the Olusegun Obasanjo administration, where Ezekwesili served as a minister, spent $16bn on power, with no improvement.

Gulak, who insisted that Nigerians had yet to benefit from the huge investment, accused Ezekwesili of castigating the Jonathan administration because she was left out of  the government.

He  queried, “When Ezekwesili was there in government what did she do?

Was it not under the Obasanjo Administration where she served that we spent $16bn on power. Did we get the power? I’m asking?”

“You see these people are making all these statements because they are out of government. What she has said is not true, it is unfortunate, it is pathetic, because it is incorrect.”

PUNCH