These are interesting times indeed for Nigeria: a couple of days ago, former World Bank Vice President for the African Region, and Due Process Pioneer in the Obasanjo Administration, Obiageli Ezekwesili, in a thought provoking keynote address entitled, ?The Wealth and Poverty of a Nation: Who will restore the dignity of Nigeria?? delivered at the 42nd?Convocation Ceremony of her alma mater, the University of Nigeria, Nsuka (UNN); allegedly accused the Yar Adua Administration and the Jonathan Administration of squandering the $67billion in Reserves left by the Obasanjo Administration in May 2007. We perused her keynote address, and here is what she actually said in respect of this issue: ??Furthermore, it is happening back to back with the squandering of the significant sum of $45 Billion in foreign reserve account and another $22Billion in the Excess Crude Account being direct savings from increased earnings from oil that the Obasanjo administration handed over to the successor government in 2007. Six years after the administration I served handed over such humongous national wealth to another one; most Nigerians but especially the poor continue to suffer the effects of failing public health and education systems as well as decrepit infrastructure and battered institutions.?One cannot but ask; what exactly does Nigeria seek to symbolise and convey with this level of brazen misappropriation of public resources? Where did all that money go? Where is the accountability for the use of both these resources plus the additional several billions of dollars realized from oil sale by the two administrations that have governed our nation in the last six years? How were these resources applied or more appropriately, misapplied? Tragic choices! Yes. Our national dignity continues to be degraded by cycles of stagnation because of the terrible choices my generation and those before repeatedly make as a result of free oil money…?
Expectedly, the Jonathan Administration took her on. The Administration through its Information Minister, Labaran Maku; the Senior Special Adviser to the President on Public Affairs, Dr. Doyin Okupe and other critical handlers of the president propaganda machine, in an apparent damage control efforts went for the kill. They insulted her person and called her all manner of names the human mind can conjure. And they also accused her of wasting the?N352.3billion she supposedly collected as direct budgetary releases, the?N65.8billion she purportedly received under the Universal Basic Education Commission (UBEC) Fund, and the overN40billion she allegedly collected under the Education Trust Fund (ETF). The President and his men also rebuffed Ezekwesili?s call for a national debate on this accusations and counter accusations, and as is usually the case, Nigerians in support of either side has joined issues based on sentiments, without an iota of attention to the true nature of events; on most counts, they chose to substitute facts for fiction and pursue fleeting shadows in place of substance. But alas, the so-called damage control crusade by the administration has only resulted to uncontrolled damage.
We at Conscience Reports has largely refrained from commenting or joining the fray; as a Whistle-blowing Organisation our priority is to always get our facts rights before taking a position on any issue. And so, we embarked on a facts-check on this issue. With respect to Ezekwesili?s statement, we laid hold of the Central Bank of Nigeria (CBN) Annual Reports, Half-Year Reports and Five-Year Financial Statements between 2006 and mid 2012; the full CBN Annual Report for 2012 is yet to be released, but the Half-Year Report is available, and we got that as well. With respect to the Jonathan Administration counter accusations; we got hold of the Appropriation Acts for 2006 to 2007 as passed by the Fifth National Assembly and as assented to by then President Olusegun Obasanjo. Our findings from these records are quite revealing, but before we go into that, here are a few things to note:
The External Reserve, also known as the Official Reserve is the CBN?s foreign exchange holdings. According to the CBN,Nigeria?s External Reserve comprises of three components, namely, the federation, the federal government and the Central Bank of Nigeria portions. The Federation component consists of sterilised funds (unmonetised) held in the Excess Crude and PPT/Royalty accounts at the CBN belonging to the three tiers of government. This portion has not yet been monetised for sharing by the federating units. It is sometimes ignorantly referred to as the Reserves of the country. The Federal Government component consists of funds belonging to some government agencies such as the NNPC; for financing its Joint Venture expenses, PHCN and Ministry of Defence; for Letters of Credit opened on their behalf, etc. The CBN portion consists of funds that have been monetised and shared. This arises as the Bank receives foreign exchange inflows from crude oil sales and other oil revenues on behalf of the government. Such proceeds are purchased by the Bank and the Naira equivalent credited to the Federation account and shared, each month, in accordance with the constitution and the existing revenue sharing formula. The monetised foreign exchange thus belongs to the CBN. It is from this portion of the Reserves that the Bank conducts its monetary policy and defends the value of the Naira.
The Excess Crude Account was created illegally against stiff resistance by the thirty-six State governors, without recourse to the National Assembly in 2004 by the Obasanjo Administration on the advice of then Finance Minister, Ngozi Okonjo Iweala and her economic management team; and she also happens, by the way, to be the Finance Minister and a dubious?co-ordinating?Minister of the economy in the present Jonathan Administration. The Excess Crude Account was meant to save excess revenues from crude oil sales above a defined or pegged benchmark price as stated in the Appropriation Act or yearly fiscal budget, and its primary purpose was to protect the budget against shortfalls and insulate the economy from shocks resulting from volatility in crude oil prices. It was also meant to fund critical infrastructure investments such as the National Integrated Power Project (NIPP), and to serve as emergency funds. But overall, government at all levels, notably the presidency has used the account as a conduit pipe for corruption, looting the funds at any slightest opportunity. After Obasanjo?s exit, the more amiable Yar Adua conceded to the governors, and the sharing spree started, hence a supposedly rainy day account became a dried account. In 2010 however, the National Economic Council, seeking to remedy the illegality, approved a plan to replace the Excess Crude Account with a National Sovereign Wealth Fund. The National Sovereign Wealth Fund itself was to have three Sovereign Wealth Funds, namely: Future Generation Fund, Nigerian Infrastructure Fund, and?Stabilisation?Fund. These Sovereign Wealth?Funds were to manage excess earnings from crude oil, and it is all embedded in the Nigerian Sovereign Investment Authority (NSIA) which is supposed to be receiving monthly funding of revenue from oil and gas above the budget figures. Going forward, the Nigerian Senate in May 2011 approved the NSIA Bill 2010, which sought to establish a Sovereign Wealth Fund to manage excess funds from crude oil sales. And the NSIA Bill was subsequently passed by the House and assented to by President Jonathan, but it yet to be functional after its initial $1billion funding. But curiously, the illegal Excess Crude Account is still operational even when there is now a substantive legally passed NSIA Act that has replaced it.
The Appropriation Act is the yearly legally approved fiscal budget for the nation.
Now to our facts-check: according to the CBN Annual Reports and Half-Year Reports for 2006 and 2007, Nigeria?s External Reserves at May 2006 and May 2007 were $34.10billion and $43.20billion respectively; and at June 2006 and June 2007, the External Reserves were $36.50billion and $42.63billion respectively, while the Excess Crude Account hovered around $9.2billion and $9.8billion in May and June 2007. If you add the $9.78billion brought forward from 2006 that will be almost $20billion. The Reports also showed that the Excess Crude Account at end December 2007 stood at $22.18billion being the sum of $9.78billion brought forward from 2006 and $12.40billion accumulated in 2007. But by end December 2008 and 2009, the Excess Crude Account had been depleted to $20.34billion and $6.54billion as unveiled by the CBN Annual Reports for 2008 and 2009; the Reports also stated further that the drawn down in the Excess Crude Account for the period was due to the need to stimulate the economy. In our own?judgement, that so-called stimulation only advanced the demoralisation of the economy. And by end December 2010, the Excess Crude Account has only $2.20billion left, but it increased to $5.20billion by end December 2011 as contained in the CBN Annual Reports for 2010 and 2011 respectively. In short, a detailed study of the CBN Annual Reports from 2007 to 2011 revealed that Nigeria?s External Reserves at year end 2007, 2008, 2009, 2010 and 2011 stood at $51.33billion, $53.00billion, $42.38billion, $32.34billion and $32.64billion respectively; while the CBN Half-Year Reports at June 2008 to June 2012 showed that the External Reserves stood at $59.81billion, $43.46billion, $37.42billion, $31.89billion and $35.41billion respectively.
A painstaking review of the above CBN records, especially that of 2007, and then on towards 2011, revealed that although Ezekwesili may not be exactly right in her $67billion figures, she is nonetheless very close in her assessment.
However, let us leave that aside for now and move on to the Jonathan Administration accusation of her stewardship as Education Minister in the Obasanjo government. For the records, Ezekwesili was Federal Minister of Education for ten months from June 2006 to April 2007. She was before then the trailblazing head of the Budget Monitoring and Price Intelligence Unit, popularly known as the Due Process Unit; from where she became Federal Minister of Solid Minerals, between June 2005 and June 2006, all under the Obasanjo Administration. As Minister of Education, she got funds for her Ministry through the Appropriation Acts. Now, the Appropriation Act for 2006 passed by the Fifth National Assembly and assented to by then President Olusegun Obasanjo was One Trillion, Eight Hundred and Ninety-Nine Billion, Nine Hundred and Eighty Seven Million, Nine Hundred and Twenty-Two Thousand, Four Hundred and Sixty Seven Naira only (N1,899,987,922,467). Of this amount, the Education Ministry was allocatedN30,480,000,000 as Statutory transfers for the Universal Basic Education Commission (UBEC),?N129,232,212,676 for Recurrent Expenditure and?N37,389,441,082 for Capital Expenditure. There is no record showing that any money was allocated or released for the Education Trust Fund (ETF). And the highest allocation was for Recurrent Expenditure which covers overheads. In 2007, the Appropriation Act as passed by the Fifth National Assembly and assented to by then President Obasanjo was Two Trillion, Three Hundred and Nine Billion, Two Hundred and Twenty-Three Million, Nine Hundred and Forty-Nine Thousand, Nine Hundred and Eighty-Three Naira only (N2,309,223,949,983). Of this amount, the Education Ministry was allocated?N35,300,000,000 as Statutory transfers for UBEC,?N142,095,995,408 for Recurrent Expenditure and?N47,103,779,521 for Capital Expenditure. Again, there is no record showing that monies were allocated or released to the ETF, and much of the money allocated to the Ministry was for Recurrent Expenditure or overheads. There was also a Supplementary Appropriation Act for 2007 passed by the National Assembly, and assented to by the President but it was essentially for so-called Power Projects across the country, and none of the other Ministries, including the Education Ministry got anything out of it. Moreover, all of the monies allocated in budgets sometimes may not be all that is released, and since Ezekwesili came in as Education Minister in June 2006 and left for the World Bank in April 2007, she cannot be totally held responsible for what happened in that Ministry or for the funds released to the Ministry more so when the Appropriation Act for 2007 was barely passed before she left Office as Education Minister. And so, our facts-check revealed that the Jonathan Administration is wrong in its accusations; the Administration is very economical with the truth both in its defence and in its accusations, and it has gone about this whole issue in a manner that seems to suggest it has every right to loot the nation?s commonwealth because other Administrations, especially that of Obasanjo had done so. President Jonathan and his boys need to restraint and caution, and be more tolerant towards dissenting views. Notwithstanding, the wastage of the Excess Crude funds is not entirely the making of the Jonathan led federal government or even that of the late Umaru Yar? Adua; it is more of the thirty-six State governors who insist on the sharing of the Excess Crude funds, and there is no clear oversight for holding them accountable for their mismanagement of those funds.
But beyond the accusations, counter-accusations and rigmarole, is the serious issue of unrestrained corruption, and no doubt, all of the Administrations in question, including the Jonathan Administration, Yar? Adua and that of Obasanjo which wasted over $16billion on the power sector without results are all culpable. They are all responsible for the blind looting of the treasury and the squandering of the nation?s patrimony under their watch since the nation?s return to democratic rule. Or how best can we put this when those who stole billions are allowed to go with a kiss on the cheek while petty thieves are sent to the hangman?s noose or committed to long years in prison. A vivid example is the recent sentencing of the former Director of Police Pensions Board to only two years in prison by Justice Abubakar Talba of the Federal High Court in Abuja for stealing?N2billion with an option of?N250,000 fine for each of the three count charges preferred against him, while in the same week of his sentencing, Obinna John was sentenced to death by hanging without an option of fine by Justice Yargatta Nimpa of the Federal High Court in Jos, Plateau State for robbing Ms. Dorothy Olaniyi of?N1,705 and two rolls of Sachet Milk worth?N400. By the same token, twenty-three year old Adepoju Jamiu was sentenced to three years imprisonment without an option of fine by Chief Magistrate Sunday Adeniran of the Ikare Magistrate Court in Ondo State for stealing a Mobile Phone worth?N17,000. These preferential treatments and inequalities before the law by the unhealthy and sharp manipulation of the Justice System by the powers that be only serves to encourage reckless looting of public funds and abuse of trust in a nation of absurdities where anything goes.
This defiance and reckless squandering of public funds must end now, and it is the Jonathan Administration?s responsibility to stop it; if it fails to do that, it will be held accountable.
????Editor in Chief & Chief Executive
Skype ID: eenakoko
Meaning of Key Acronyms
CBN?????????-???????????????Central Bank of Nigeria
UBEC???????-???????????????Universal Basic Education Commission
ETF??????????-???????????????Education Trust Fund
PPT??????????-???????????????Petroleum Profit Tax
PHCN???????-???????????????Power Holding Company of Nigeria
- CBN Half-Year Report
- CBN Half Year Economic Report for 2006
- CBN Annual Report 2006
- CBN Half-Year Economic Report for 2007
- CBN Annual Report for the Year Ended December 31st?2007
- CBN Annual Report 2008
- CBN Interactive Annual Report for the Year Ended December 2009
- CBN Annual Report 2010
- CBN Annual Report 2011
- CBN 2012 Half Year Report
- CBN Five Year Financial Statement (Five Year Balance Sheet) for 2011, 2010, 2009, 2008 and 2007
- CBN Five Year Financial Statement (Five Year Balance Sheet) for 2007, 2006, 2005, 2004 and 2003
- CBN Reserve Management
- Appropriation Act 2006
- Appropriation Act 2007
- Supplementary Appropriation Act 2007