- Category: GENERAL
- Published on Friday, 18 May 2012 20:26
- Written by Daniel Elombah
- Hits: 10
Three days ago, the Coordinating Minister of the Economy and Finance Minister, Dr. Ngozi Okonjo-Iweala, told THISDAY that Nigeria has the ability to meet her financial obligations and payments. She said the Federal Government is building up the excess crude account (ECA) to cushion the effect of shortfalls in revenue accruing
from sale of crude oil owing mainly to theft and illegal bunkering in the Niger Delta.
Yesterday, 18 May 2012, it emerged that Dr Ngozi Okonjo-Iweala, had asked the National Assembly "to quickly approve the Federal Government's external borrowing plan of $7.9b, about N1.8 trillion".
Okonjo-Iweala made the request during an oversight visit to her office, by members of the House Committee on Finance.
It also emerged that President Goodluck Jonathan had written the Senate and House of Representatives in February seeking approval for the loans to fund key projects in various sectors of the economy.
Nigeria is seeking the loan facility from the World Bank, Africa Development Bank, Islamic Development Bank, Exim Bank of China and India lines of credit.
"We have an external borrowing plan that we have put to the National Assembly, as we are required to do and I am really counting on your help to get out the borrowing plan as quickly as possible," Iwealla told the lawmakers.
On Tuesday Ngozi Iwealla was reacting to reports that the Federal Government is cash-strapped and could no longer meet its financial obligations from the month of April.
Even though Okonjo-Iweala admitted that the Federal Government might have recorded shortfalls in "one or two months, which is not out of place in the business of government", she argued that the government was managing the situation by building up ECA which stood at about $4.3 billion as at Tuesday.
"The shortfall is not tantamount to fiscal crisis. And the shortfall has happened for the past month... There is no fiscal crisis," she said.
If There is no fiscal crisis, why is the "Honourable Minister" begging the lawmakers to "quickly approve" a $7.9billion loan as a matter of national urgency?
Moreover, it has emerged that rather than "building up ECA", Mrs Iwealla is rather WITHDRAWING funds from the ECA!
This government continues to lie to its citizens.
Nigerians should be made aware that "since February 2010 when he became acting president, Mr. Jonathan has been borrowing an average of USD $1 billion monthly, mostly by issuing bonds, thereby doubling our total debt levels to nearly USD $42 billion and counting. The federal government is fast accelerating towards insolvency!"
To what use is the government putting these borrowed billions?
The Minister said the loan is required to complete some on-going projects captured in the 2012 budget. She said government will spend the loan on several projects in agriculture, water resources and power.
Again all lies!
In my article, Boko Haram, Fuel Subsidy; Jonathan's Government in Panic Mode', published on Sunday, 25 December 2011, I pointed out that "A careful analysis of the 2012 budget indicates there is no money to carry out any capital project. The 1.3 trillion or so budget for capital project is expected to come from savings from removing the subsidy, and without removing subsidy, this government goes broke"!
I also wrote that the billions of dollars from sale of oil go to "Payment of salaries, and recurrent government spending, and unless government borrows more money, even the payment of salary would be jeopardized in the next six months".
It now appears I was too generous, the government went broke in 5 months!
With the massive theft of crude oil going on in the Niger Delta, Nigeria was on the verge of facing a fiscal crisis if the trend continued. But rather than tackling the twin evils of corruption and oil bunkering, Mrs Iwealla goes aborrowing!
The minister said a lot of things depend on her proposed external borrowing plan "and until the National Assembly gets it out, all those who want to assist us with soft credit will not be able to do so."
At the belated April FAAC meeting held on Thursday/Friday, Nigeria distributed 563.09 billion naira to its three tiers of government in April, down from 613.70 billion in March. The accountant general said today that Nigeria earned 626.18 billion naira ($3.95 billion) in oil revenues in April, down 13.8 percent from 726.77 billion naira in March due to lower production.
To make up for the shortfall government removed 21.465 billion naira ($135 million) from its excess crude account savings, while the rest will be borrowed from international bodies.
Mrs Iwealla helped Nigeria pay off $32b debts and now she is borrowing $8b every year, in 4 years Nigeria will owe about $32b looted money. To think that this woman first appearance in Nigeria, whose major achievement was repaying that debt was in the interest of Nigeria!
Yet assuring Nigerians that the country's finances are solid, Mrs Iwealla ruled out the possibility of a fiscal crisis.
"The country is not in any fiscal crisis. We have the ability to meet our obligations and our payments. You know, be it for salaries, debt servicing and for all the things that we are supposed to do.
"There have been a lot of questions about government finances. But I want to reassure Nigerians that government finances are solid. "
Someone please tell this woman that this country is in a serious financial crisis fuelled mainly by corruption, extravagance and mismanagement.
A $6.8 billion fuel subsidy fraud scandal is currently rocking the country. A string of investigations, audits and committees set-up to investigate the fuel subsidy found the subsidy regime, between 2009 and 2011 was fraught with "endemic corruption and entrenched inefficiency".
Investigators looking into the subsidy found Mismanagement and theft by fuel marketers and government officials cost $6.8 billion over three years -- about a quarter of Nigeria's annual budget.
The National Assembly has not only identified who stole the money but urged President Goodluck Jonathan to go after the culprits and recover the looted funds. But many of those implicated are allies of the president and he lacks the guts to go after them.
Evidently the cause of the current fiscal crisis is not just the theft of oil in the Niger Delta. Oil bunkering has been there all along, even before the advent of this administration.
In 2007, at the height of militancy in the Niger Delta, the Yar'Adua-Jonathan administration inherited about $50 billion in foreign reserves, $27 billion in the excess crude account, and only $3 billion in foreign debt. Over the ensuing four years, the federation earned another $180 billion from oil and gas, import duties and taxes. By 2011, not only have all these resources had been wasted with little to show for it, our total debt have ballooned to nearly $42 billion and counting.
Like I warned Olusegun Aganga before her, Mrs Iwealla should drum into the ears of Mr Goodluck Jonathan that our salvation does not lie in further borrowings but in fighting corruption, plugging leaking and gaping loopholes, proper management, cutting government spending and investing in human capital for the short and medium term.
For the long term, Nigerians should stop fooling themselves. The current fiscal arrangement is not working and will never work. We should go back to the 1960's six-region structure, practice true federalism, and let each region develop at its pace using its resources. Every section of Nigeria is rich in various resources; it is the smell of oil that has blocked our senses from recognizing and exploiting the real wealth of Nigeria. The greatest wealth potential lies not in the bowels of the earth but in the human brain. Japan has no mineral resources but is an economic power.
Daniel Elombah
VLS Solicitors, LondonPhone: +44-7958588018
+44-2088087999
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PLEASE SIGN OUR PETITION!!!!!
Urge President Goodluck Jonathan to Prosecute all those indicted by the Fuel Subsidy Probe
http://www.thepetitionsite.com/400/420/223/urge-president-goodluck-jonathan-to-prosecute-all-those-indicted-by-the-fuel-subsidy-probe/
Urge President Goodluck Jonathan to Prosecute all those indicted by the Fuel Subsidy Probe
http://www.thepetitionsite.com/400/420/223/urge-president-goodluck-jonathan-to-prosecute-all-those-indicted-by-the-fuel-subsidy-probe/
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