In his interview with ThisDay newspaper published last
Sunday February 22nd, President Jonathan accused
former CBN Governor Charles Soludo of being political
with his claims that N30 trillion had gone missing under
the watch of the Minister of Finance, Dr Ngozi Okonjo-
Iweala. What President Jonathan said about Soludo’s
claims below and Soludo’s response after the cut…
“So you’ll see that there is a lot of politicking about
some of the serious issues. Not too long ago I read in
one of the papers, I think Vanguard, that former chief
economic adviser to President Obasanjo who also went
to become a CBN governor… Soludo is a professor and
first class material. Yes, making a first class in
economics, he is a brilliant person. His secondary
school records are fantastic. So by all standards he is a
brilliant person. So the Vanguard wrote that he accused
Ngozi; that N30 trillion was stolen under the watch of
Ngozi in four years. Ngozi became a finance minister,
let’s say from 2011 till date. From that time till now, our
annual budget is between N4.3 trillion and N4.9 trillion.
So even if you put all together, it is about 18 plus trillion
naira, & not 30 trillion.
The budget for these four years is less than N20 trillion,
but Soludo said that under Ngozi’s watch they stole
N30 trillion. This is in the papers, social media, stored
in the clouds and will continue to be there. And when
you type it in it will come out that during President
Jonathan’s time they stole N30 trillion. We asked Ngozi
how her colleagues in the World Bank saw the
accusation and she said they were laughing and
couldn’t believe it. There are certain things that you just
cannot believe and if that is coming from somebody
considered to be cerebral like Professor Soludo, then of
course you know what the ordinary person would say.
It is all political”President Jonathan said.
Professor Soludo reacted to this interview by releasing
an article this evening. See it below…
My attention has been drawn this morning to an article
entitled: “Jonathan Replies Soludo over “missing N30
trillion” claim”— extracting from Mr. President’s
interview as published by Thisday newspaper.
ThisDay quoted Mr. President as saying that “Soludo
said that under Ngozi’s watch they stole N30 trillion”
but that since the sum of the federal budget over the
last four years was less than N30 trillion, such an
amount could not have been “stolen”.
According to the President, “it is all political”. I had
earlier stated that I would not make further comments
on the issues until probably after the elections but since
Mr. President has decided to join the fray, I am
constrained to make a further brief clarification.
For me, President Jonathan is a gentleman and a friend
but I have a fundamental disagreement on his
management of the economy. On the issues at stake, I
believe that the pressures of office and the hectic
electioneering campaigns have not allowed him time to
read my articles or that his staff have not explained the
contents to him hence he totally missed the point in his
comments. For the avoidance of doubt, let me clarify as
follows:
1. In my article entitled “Ngozi Okonjo-Iweala and the
Missing Trillions”, I presented some rough calculations
covering: oil theft, money that ought to accrue to stock
of foreign reserves, unbudgeted oil subsidy payments,
customs duty waivers, leakages through the self-
financing government parastatals, unremitted sums by
NNPC, etc.
I concluded that section of my article by noting that: “I
have a long list but let me wait for now. I do not want
to talk about other ‘black pots’ that impinge on national
security. My estimate, Madam, is that probably more
than N30 trillion has either been stolen or lost or
unaccounted for or simply mismanaged under your
watchful eyes in the past four years”.
2. It is evident that the monies I referred to are “off-
budget”. These are monies that did not make it to the
budget. I find it funny that the Government deliberately
avoided the issues raised above but instead has sought
to divert attention by focusing on the “federal budget”.
Let me state for the record that I believe that the
amount of resources that are either stolen from the
economy or out-rightly mismanaged by government far
exceeds the federal budget per annum.
Ours is about a N100 trillion economy, and I will be
shocked if the government pretends that it does not
know that currently about 10% of the GDP falls into a
‘black hole’ on annual basis.
We have not added figures based on counterfactual
analysis such as the cost to the aggregate economy of
bad or misguided economic policy. For example, in
today’s Thisday newspaper, a headline news reports
that “Aliko Dangote, Africa’s Richest Man, Loses $7.8
Billion as Naira, Stocks Plunge” while reporting that “In
dollar terms, the devaluation has knocked more than
$40 billion off the value of Nigeria’s economy”. Of
course, most people predicted that oil prices would
soon fall but we were caught unprepared, and today,
the parallel market exchange rate is N225 to the dollar.
Thus, the kind of analysis in today’s Thisday is just one
little example of the kind of collateral damages–‘costs’
or ‘losses’– that mismanagement foists on the system.
To repeat, my article did not focus on the federal
budget: the mismanagement of the consumption budget
and its unprecedented debt accumulation (with low
value-for-money expenditures) are entirely different
matters.
3. What I found particularly disconcerting as a Nigerian
from the comments I read is the fixation to validation
from the World Bank. According to Mr. President, “we
asked the Minister how her colleagues at the World
Bank saw the accusation”. I shook my head in
disbelief. It is instructive that no one asked what
Nigerians thought or ‘how Nigerians saw it’ but rather
what was important to government was the impression
of the World Bank. If this is the mind-set of our leaders,
then ordinary citizens have real cause to worry.
Well, I have read several editorial comments of Nigerian
media and they do not agree with the ‘impression’ of
the World Bank official. I read a similar comment by a
high government official stating that World Bank
officials and CNN had told them that government was
doing well and therefore who else could question them.
But neither the World Bank nor CNN conducts
comprehensive independent surveys on the economy—
they comment based on the data they are given— and
their subjective “opinions” cannot substitute for hard
facts.
The World Bank is not a statistical agency. I can
provide a long list of countries that World Bank reports
praised as ‘star performers’ and they slumped into deep
crisis almost immediately after. Check out the World
Bank and IMF reports on the US and other countries’
economies shortly before the unprecedented global
financial and economic crisis in fifty years (the Great
Recession of 2008/09).
Actually for many countries once they start getting such
‘praises’, then perceptive officials begin to worry.
Nigeria is probably the only country where its
government officials quote the World Bank while
ignoring data from its own statistical agency!
A serious concern is that while government relies on
external validation (opinion) as ‘proof’ of its
performance, it is selective in the process—accepting
the positive ones and disparaging the negative ones.
Our recent exchanges illustrate the point. In my first
article (26th January): “Buhari Vs Jonathan: Beyond the
Elections”, I argued that “the economy seems to be on
auto pilot, with confusion as to who is in charge, and
government largely as a constraint.
There are no big ideas, and it is difficult to see where
economic policy is headed to. My thesis is that the
Nigerian economy, if properly managed, should have
been growing at an annual rate of about 12% given the
oil boom, and poverty and unemployment should have
fallen dramatically over the last five years”. No one has
credibly challenged the above, except what the
Financial Times of London described as a “furious
response by the Minister”. But, the influential
Economist Magazine of London and New York Times
agreed with us. According to the Economist editorial
(7th February, 2015):
“… as Africa’s biggest economy stages its most
important election since the restoration of civilian rule
in 1999, and perhaps since the civil war four decades
ago, Nigerians must pick between the incumbent,
Goodluck Jonathan, who has proved an utter failure,
and the opposit ion leader, Muhammadu Buhari….
The single bright spot of his rule has been Nigeria’s
economy, one of the world’s fastest-growing. Yet that
is largely despite the government rather than because
of it, and falling oil prices will temper the boom. The
prosperity has not been broadly shared: under Mr
Jonathan poverty has increased. Nigerians typically die
eight years younger than their poorer neighbours in
nearby Ghana”. I gave the Government an “F” grade on
economic management, and the Economist described
its performance as “utter failure”.
The Economist also basically agreed with me that the
re-basing of the economy and its observed ‘growth’
have nothing to do with government policy. Again,
government has not credibly challenged the above or is
the Economist’s view also ‘all political ’? Government
simply waved it off. My point is that if Government has
to rely on the “impressions” of external bodies, then it
should be consistent and comprehensive.
4. In conclusion, let me re-state that I firmly stand by
my earlier statements. These are weighty statements
which I weighed carefully before issuing. I appreciate
that this is an election time and so attempts would be
made to trivialize, or either play politics with, or divert
attention from, them. In a serious society, we should
have had a good debate on these matters as they could
provide some of the building blocks in trying to pick the
pieces after the elections.
Part of our citizen duty in a democracy is to raise such
issues and demand for answers. In the meantime, I
grant that our leaders are busy with campaigns but
these issues won’t go away until we have a transparent
resolution. Be assured that after the elections, we will
be back with even more questions!
