Jonathan is not a reckless spender –FG

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.”