Thursday, 25 August 2011

That Ngozi Okonjo-Iwealla Press conference is much ado about nothing! Written by Femi Lawal

Honestly, it is the same appetite of the Nigerians for Foreign Goods that informed the encomiums showered on Iweala, Aganga, Nnaji etc, as Ministers.

From this Iweala's Press Conference Comments, I'm of the opinion that the Secondary School Economics Teachers in Nigeria would have better Finance or Economic Management Agenda than Iweala.

First, Iweala claims that her ability to reduce the Recurrent Expenditure from the staggering 74 % to the equally staggering 70% at the end of 4 years, is a feat that would boost the neglected Capital Expenditure in Nigeria. I can now see why she spent a hell of a time to CLEAR HER DESK at the World Bank. If Nigerians understand what that bureaucratic terminology connotes.

Secondly, United States that is larger than Africa has only 15 Federal Ministers (Secretaries), while the poor Nigerian Government that is about the size of the State of Texas, has 42 Federal Ministers that are paid higher than the US Federal Ministers. Yet, Iweala that has just come from Washington DC, has not said a word about the size of 42.

Truly, Nigerian Government has no business with more than 10 Ministries with 10 Ministers.

According to Iweala, the Nigerian Budget is N4.5 Trillion (i.e. $30 Billion). The Nigerian Recurrent Expenditure is about 75% . That is $ 22.5 Billion (75%) out of 30. Her entire efforts as Nigeria's Economic Manager in 4 years would bring the Recurrent Expenditure down to $ 21 Billion (70%). And this would be the solution to Nigeria's Capital Development.

With the NASS Quarterly Constituency Allowance that increased from N23 Million to N42 Million added to their monthly Salary, the NASS (Senate and H of Rep) consumes less than $750 Million (less than One Billion Dollars) from the total Budget of $ 30 Billion (or from the $ 22.5 Billion Recurrent Expenditure). Iweala has not said what the Presidency and the 42 Ministers consume from the Total Recurrent Expenditure.

If Iweala wants to address Nigerians through a Press Conference in a Transparent Manner, she should be bold to tell Nigerians what the Nigerian Government collects as Total Revenues Annually. Telling Nigerians that the Budget is N4.5 Trillion ($ 30 Billion) and you want to reduce Budget Deficit to 3% is meaningless, and crooked at best. Besides, deliberately varying the mixture of Naira and Dollar at a Press Conference to mislead, does not improve anybody's Credibility.

In the last 3 years, Crude Oil has sold at the average of $100 per Barrel. That is about $60 Billion in a year, for which the Nigerian Government gets about $ 40 Billion (about 60% of the proceeds). This excludes Internally Generated Revenue and the Revenue from other Exports.

So, Iweala should come Public with the Nigerian Total Annual Revenue Collection in the face of the Annual Budget of $ 30 Billion that suddenly results in 3% or more Budget Deficit.

There is no evidence that Iweala verified the said $37.8 Billion IMF/World Bank outstanding Loan before negotiating Debt forgiveness in 2005.

Now that the $ 37.8 Billion Unverified IMF outstanding Loan has gone since 2006; Iweala has just arrived to tell Nigerians of the existence of Another Loan of $39.7 Billion of which she labeled as mainly Domestic Loan in Bonds and Treasury Bills, amounting to a whopping $34.4 Billion (N5.2 Trillion).

What is surprising is that many Nigerians are fast becoming Billionaires in US Dollars in a Country (of more than 150 million people) whose Annual Budget is only $30 Billion; and We Don't Know How and Where their Billion Dollars are coming from.

Nigerians would like Iweala's Team and the EFFC to be Good Enough to lunch an Investigation to Ascertain the Authenticity of this Over-Bearing Domestic Revenue of a whopping $34.4 Dollars. Treasury Bills and Bonds sold to Who?

Lastly, Iweala says the Government would remove Petroleum Subsidy. However, I recall the Removal of the Petroleum Subsidy was the World Bank/IMF Conditionality of 1986. Government, between 1986 and 1993, removed some; and in 1994 Government also removed Petroleum Subsidy and the pump price of Fuel rose from 70k per Liter to N3.75 per Liter in one day. The Nigerian Naira then took a free fall from about N22 per Dollar to N80 per Dollar. So, which Subsidy Removal again is Iweala talking about. Or, is she on a Secret Mission?

The West, in search of where to direct Export trade to revamp their dwindling Economy after the loss of Asia, suddenly advised Sanusi to Devalue the Naira. Sanusi intelligently ignored such Unsolicited Advice.

My question is:
Is Iweala's Secret Mission to Nigeria "the DEVALUATION of the Naira"?; using phantom Petroleum Subsidy Removal as a Front?; just as the World Bank/IMF had earlier prompted Sanusi but got a Rebuff ?

To Nigerians:

The DEVALUATION of the Naira would kill the ability of Nigerians to establish Manufacturing Industries that would have propelled Nigeria into joining the Club of Emerging Markets by 2020.
The DEVALUATION of the Naira would only worsen Nigeria's dependency on Foreign Imports from the West, and compound the raging poverty in Nigeria.