Vanguard (Lagos)

28 January 2013

Nigeria: N10.6 Trillion Wasted Fund - FG Hits Back, Takes On Ezekwesili

The Presidency has accused former World Bank Vice President for Africa, Dr. Oby Ezekwesili for "lying shamelessly"  over the spending of the ... ( Resource: Ezekwesili Lied Shamelessly - Doyin Okupe

Abuja — The Federal Government, yesterday, reacted to comments by the former Minister of Education, Dr. Obiageli Ezekwesili, alleging that the governments of presidents Umaru Musa Yar'Adua and Goodluck Jonathan, squandered $67 billion in foreign reserve, describing the allegation as "outlandish and clearly fictitious".

Minister of Information, Mr Labaran Maku who addressed a press conference in response to some of the allegations raised by the former Vice President (African Region) of the World Bank said the damning verdict passed on the education sector by Mrs Ezekwesili was a self-indictment as she presided over the sector without making any positive impact on it.

The Information Minister who was flanked by the Senior Special Assistant on Public Affairs, Dr. Doyin Okupe; Economic Adviser, Prof. Nwanze Okedigbo and Special Adviser on Performance Monitoring, Prof. Sylvester Monye, said Ezekwesili's allegations were curious in the light of the fact that she had been part of governance in the past as the Vice President of World Bank.

According to Mr Maku, Ezekwesili's criticism of the education sector amounts to hypocrisy as she was part of the sector and contributed to its sorry state because despite receiving N458.1billion between 2006 and 2007 for the sector, there is nothing to see in terms of achievements.

The Minister said: "If she says education has not worked it means she is saying she did not work".

He accused the former Education minister of betraying a surprisingly limited understanding of government finances in her comments at Nsukka.

He noted: "These statements are even more curious in the light of the fact that she has held senior positions in government, and more recently, a position as a Vice President of the World Bank. However, rather than speculate about her motives, we would focus on the facts.

All I demand is accountability -Ezekwesili

Responding to Maku's attack Dr. Obiageli Ezekwesili challenged officials of the Federal Government to a public debate.

On allegations that she mismanaged funds meant for the education sector during her 10 months as Education Minister, Mrs Ezekwesili said: "I Challenge them to a public debate of facts regarding 2007 Excess Crude Account (ECA) and foreign reserve and last five and half years oil revenue."

Also writing on twitter yesterday in messages prefaced with the declaration, "Nothing but Accountability," Ezekwesili said: "In 2007, the incoming Administration was handed $45Billion in Foreign Reserve plus $22Billion.

Nothing but accountability: Let Mr. Maku go further. As a citizen all I want to know is the Mathematics of the ECA and the Foreign Reserve. Nothing but accountability: I demanded accountability and that's all a citizen asks of government. I will not stop asking for accountability.

N458.1bn Education Ministry fund

"The statement by the former World Bank Vice President that the governments of Presidents Musa Yar'adua and Goodluck Jonathan have squandered $67 billion in reserves (including $45 billion in external reserves and $22 billion in the Excess Crude Account) left by the Obasanjo Administration at the end of May 2007 is factually incorrect. 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 the Excess Crude Account, and $2.18 billion in the Federal Government's savings. These figures can be independently verified from the CBN's records. The figure of $67 billion alleged in her statement is therefore clearly fictitious.

"However, since President Obasanjo left office, the reserves have experienced fluctuations, rising from $43.13 billion in May 2007, peaking at $62 billion in September 2008 during the Yar'Adua/Jonathan Administration when oil prices peaked at $147 per barrel, and falling subsequently to a low of $31.7 in September 2011. This fall in reserves was a result of the vicissitudes of the global financial crisis which caused CBN interventions in the currency market to defend the value of the naira. The Excess Crude savings, a component of the reserves, was also used to stimulate the economy at the height of the global financial crisis to the tune of about $1 billion (or 0.5 per cent of our 2009 GDP). As a result, Nigeria is one of the few countries in the world that did not seek assistance from international financial institutions. It should be noted that the fiscal stimulus used to shore up the economy during that period was shared by all three-tiers of government, including commitments of about $5.5 billion made under the Obasanjo Administration for power projects.

"On the use 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 (CBN).

External Reserve under CBN

"Section 2 sub-section (c) of the CBN Act (2007) states that the Bank shall 'maintain external reserves to safeguard the international value of the legal tender currency' - in other words, to defend the value of the naira. No President since the democratic dispensation has contravened this Act. Other uses of the reserves are to settle both public and private sector foreign currency (e.g. payment of goods and services, settlement of external debt, etc) it must provide the naira equivalent to the CBN before the Bank sells the required foreign currency. As a former World Bank Vice-President for Africa, surely, Mrs. Ezekwesili must have known this.

"We also found Mrs. Ezekwesili's interrogation of the educational system somewhat disingenuous and borderline hypocritical. During her tenure as Minister of Education between 2006 and 2007, she collected total sum of N352.3 billion from direct budgetary releases. In addition, she received about N65.8 billion under the Universal Basic Education Commission (UBEC) Fund, and over N40 billion from the Education Trust Fund (ETF) during her time as Minister of Education.

"In view of these humongous allocations, few legitimate questions arise. What did she do with all these allocations? What impact did it have on the education sector? One wonders if our educational system would have been better today if these allocations were properly applied.

"No one disputes that Nigeria still faces challenges, most of which were built up over a long time. But we need to acknowledge the significant achievements of this administration in the aftermath of difficult but necessary macro-economic and structural reforms being implemented in the country.

"This administration has restored macro-economic stability against the backdrop of global economic uncertainty, slow growth in the United States and high unemployment and unsustainable debt in Europe. In the first three quarters of 2012, Nigeria's economy grew by about 6.4 per cent and is set to continue at a similar pace in 2013 according to independent forecasts. We have reduced our fiscal deficit to only 2.17 per cent of GDP in the 2013 budget, while rebalancing our spending in favour of capital expenditure. These achievements have already received strong endorsement from international rating agencies. At a time when many advanced and emerging markets are being downgraded, Fitch and S&P have upgraded our sovereign credit ratings. The inclusion of Nigeria's sovereign bonds in the emerging market bond indices of JP Morgan and Barclays also testifies to the growing confidence of the international investment community in our economy.

"We have also focused our attention on removing the bureaucratic and structural bottlenecks in the economy to enable the private sector create more jobs for our youths. In the power sector, most Nigerians will attest to improvements in power supply even as the 10 new power plants being built by this Administration are yet to fully come on stream. There have also been improvements in rail services; for example, the Lagos--Kano rail line is now fully operational and serving Nigerians for the first time in over 20 years. There have been significant improvements in road development; aviation - in particular refurbished terminals; and agriculture, where new jobs are being created every day. Serious work is ongoing to improve our ports and lower the cost of doing business and the cost of consumption in Nigeria. The government has further launched a number of initiatives targeted at creating jobs for our youth, including support for entrepreneurship through the YouWin Programme; work for the unskilled through the Community Services programme of the Subsidy Reinvestment and Empowerment Programme; and support for unemployed graduates through the Graduate Internship Programme.

"This administration is squarely focused on promoting a stable, non-inflationary, and inclusive economic environment for Nigeria to ensure that Nigerians can live better and more fulfilled lives", Maku said.

Responding to a question on why the Federal Government waited for the former minister's outburst before charging her for the alleged misappropriation of $458.1b, Maku said: "The essence of the briefing is not to prosecute her but to debunk her claim that Federal Government had squandered N10. 6 trillion. It is wiser that people of Ezekwesili's calibre become more conscious than to behave like strangers in what they ought to know better in the way they condemn things after they have left office."

On the recent threat by MEND that they are going to bring the country down on the account of Henry Okah's conviction in South Africa, Maku said since the MEND leader was not convicted in Nigeria, it will be very shocking if any Nigerian or group of Nigerians will take such actions against their own country.

"What we expect at this time is that all Nigerians should show higher level of commitment and patriotism to Nigeria. We can't live in a nation where we abandon the law.

What I expect at this moment is that our citizens should understand that this nation offers the best of opportunity to live better lives and that anything you do against your country is not a plus.

We call on all those making the threat to commit themselves to the laws of the land and allow the peace that have rained in the nations over the couple of years since amnesty programme started not to be bridged.

He charged all Nigerians to condemn terrorism and vandalism, saying "that this is the time to unite Nigeria."

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InFocus

Controversy Over Nigeria's Reserves

The Presidency has refused to join the former World Bank Vice President for Africa, Oby Ezekwesili, in a national debate over the spending of the foreign reserves funds, accusing ... Read more »