Savings: I did not accuse Jonathan - Okonjo-Iweala

By Ehi Ekhator

The immediate past Minister of Finance, Dr. Ngozi Okonjo-Iweala has debunked the widely misinterpreted statement credited to her concerning savings during her former boss, Goodluck Ebele Jonathan.

Ngozi Okonjo Iweala

In a statement signed on Friday by her Media adviser, Paul C Nwabuikwu, the Minister denied indicting Jonathan and his administration under which she served.

Okonjo-Iweala had said that there was no political will to save in her second term as Finance Minister. She was quoted as saying ” This time round, and this is the key now, you need not only to have the instrument but you also need the political will. In my second time as a finance minister, from 2011 to 2015, we had the instrument, we had the means, we had done it before, but zero political will.”

In a reaction to the misinterpretation, the former minister said her statement was directed at the governors who opposed the idea and effort by the Jonathan’s government to save in the ECA and Sovereign Wealth Fund.

She said “Some recent media reports have distorted comments made by former Finance Minister Dr. Ngozi Okonjo-Iweala regarding how a lack of political will negatively impact national savings over the past few years.

Contrary to the slant given by these loud headlines, Dr. Okonjo-Iweala did not indict the Jonathan administration in which she served.

“Rather, she was referring to what many Nigerians already know: the strong opposition by some governors to the Jonathan government’s efforts to save in the Excess Crude Account and the Sovereign Wealth Fund sabotaged this important national priority.

“The governors’ criticism of Dr. Okonjo-Iweala’s many calls for the country to save for the rainy day are still fresh in the minds of Nigerians.

“It will be recalled that this opposition culminated in the Governors taking the Jonathan government to the Supreme Court in furtherance of their position that the Federal Government had no right to “compel” them to save.

“Several knowledgeable persons including former Anambra State Governor, Mr. Peter Obi have confirmed these facts.

“So the issue of Okonjo-Iweala indicting the Jonathan administration over this very public issue simply does not arise.”

Supporters of the present administration had taken to the social media since the statement was released to buttress their earlier accusation that the last administration, under the leadership of Goodluck Jonathan, emptied the country coffers

Savings: I did not accuse Jonathan - Okonjo-Iweala

Why Nigeria"s Foreign Reserve Dropped

By Emmanuel Elebeke

The Federal Government, yesterday, responded to the allegations made by former President Olusegun Obasanjo against the administration of President Goodluck Jonathan, including an alleged squandering of the nation’s $55 billion foreign reserve.

The Minister of Finance, Dr. Ngozi Okonjo-Iweala explained that the former President got it wrong, stating that former President Obasanjo left a gross reserve of $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 Federal Government’s savings in May 2007.

It stated that the reserve peaked at $62 billion in September 2008 under Yar’Adua when crude prices rose to $147 per barrel before falling to $31.7 billion in September 2011 as the Central Bank of Nigeria had to use much of it to defend the Naira, following the 2008-2009 global financial meltdown.

The ministry maintained that President Jonathan never in any way squandered the nation’s reserves, but appropriately utilised it in the course of normal transactions required for the development of the Nigerian economy.

The statement read in part: “It is absolutely not true that the administration of President Goodluck Jonathan squandered the nation’s reserves. The facts are clear and indisputable. At the end of May 2007, Nigeria’s gross reserves stood at $43.13 billion, comprising the CBN’s external reserves of $31.5billion, $9.43billion in the Excess Crude Account, and $2.18 billion in Federal Government’s savings.

“These figures can be independently verified from the CBN’s records.

“Secondly, it is a misconception to think that reserves are immutable or cast in stone. The reality is that since May 2007, the reserves have fluctuated in line with developments in the international oil market, rising from $43.13billion at that time, peaking at $62billion in September 2008 during the Yar’adua/Jonathan administration, when oil prices reached a peak of $147 per barrel, and falling subsequently to a low of $31.7 billion in September 2011.

This fall in reserves was largely a result of the vicissitudes of the global economy and oil market which caused the CBN to intervene, using some of the reserves, to defend the value of the naira.

“Thirdly, the excess crude savings which is a component of the reserves, was largely used to cushion the economy at the height of the global financial crisis in 2008-2009.

“Fourthly, it is true the savings in the ECA would now have been higher but for the fact that a number of governors, against strong professional advice, actively kicked against continuous building up of the ECA and, indeed, pushed for its sharing. It is on record that states even took the Federal Government to court on this matter,.

“In the fifth place, it is also worth noting that the Jonathan administration built the first ever Sovereign Wealth Fund for the nation in which savings are being made for future generations and infrastructure investments.”

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Why Nigeria"s Foreign Reserve Dropped

Foreign reserve now $38bn - Okonjo-Iweala

By Emma Ujah, Abuja Bureau Chief

Abuja—The nation’s foreign reserve currently stands at $38 billion, the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, disclosed yesterday.

Ngozi Okonjo Iweala

Speaking at the Public Affairs Forum, in Abuja, the minister said the economy was stable and the Gross Domestic product, GDP, was growing at over 6 per cent in spite of the challenges facing the nation.

Her words, “One of the key things I want to tell you is that we have tried to keep this economy stable under this administration. All these things you are seeing- the investments in roads, the investments in industries cannot happen if your economy lacks stability.

“If you wake up worrying about inflation; if you wake up worrying about exchange rate, you know Nigerians watch the exchange rate every single day. If you wake up worrying about no growth then you cannot even talk about investing in the sector.

“So the number one task that every government delivers in every country- America, UK, Nigeria- is stability. One thing you have to say for the administration of President Goodluck Jonathan is that it has been able to deliver on macro-economic stability for the past three years.

“The exchange rate, yes, it has gone up and down, it fluctuates, but it has been relatively stable. The inflation rate has come down from about 12 per cent last year to about 8.5 per cent. The reserves are at $38 billion today and enough to cushion us for 5 months. We have been able to put a little more into the Excess Crude Account”.

The minister described Nigeria’s fiscal deficit as “one of the lowest in the world- just over 1 per cent of GDP”, adding that many countries, even in Europe, run fiscal deficits of between 5 to 10 per cent.

On borrowing , she noted that Nigerians voiced their objections to large borrowing and that as such the President Goodluck Jonathan administration decided to maintain a low debt profile.

“By 2010, we borrowed N1.3 trillion to help finance our spending. We determined under the president who said Nigerians don’t want borrowing, let’s bring it down. Today do you know what our borrowing is, N571 billion. We will continue to take it down, even if it is by N1, we will continue trending down. The debt stock is very high because of past borrowing but will continue to bring it down. That means we must be prudent in the way we spend and we must also be very fast to try to organize additional revenues”.

Non-oil revenue

Dr. Okonjo-Iweala said that the nation was too dependent on oil revenue and that with the falling oil price in the international market, coupled with declining crude oil production, expanding the non-oil revenue base had become inevitable.

Her words, “We are too depending on oil. The price of oil is now coming down. The quantities are also not as large as they used to be. So we have to plan differently. That is why we have to rely more on non-oil.”

“I am convinced that this economy can generate additional $ 3 billion that can help us finance our expenditures”.

She pointed out that Nigeria has a big responsibility, not just for itself but for the whole West African Sub-region and the entire African continent.

“We form 77 per cent of west African GDP, we form 25 per cent of Africa’s GDP. It means that if things don’t work well in Nigeria, a quarter of the African GDP is affected”, she said, adding, “that is why this administration is not only thinking of what we will deliver here but how to be a responsible African citizen and global citizen in the way it delivers for its home people”.

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Foreign reserve now $38bn - Okonjo-Iweala