How to avert economic crisis in Nigeria, by Okonjo-Iweala

Ngozi_Okonjo-IwealaCautions over depleted excess crude savings, high subsidy votes

Govt changes recruitment process for agencies

FISCAL prudence is the nucleus of  a plan being scripted by the nation’s finance and economic czar to save the country from a looming economic crisis that may be provoked by government’s wasteful spending.

The Co-ordinating Minister for the Economy and Minister for Finance, Dr. Ngozi Okonjo-Iweala, was unsparing in her assessment of the country’s economic condition. To her, Nigeria faces a threat of serious economic and financial crisis should the global economy again experience any financial challenges because of the fast depleted excess budgetary savings, which now stand at a paltry $3.6 billion owing to constant agitations by states that the fund should be shared to the constituents units and not saved for the rainy days under the recently enacted Sovereign Wealth Fund.

The fund is meant to attend to key infrastructural development and cushion the pains of any volatility in the price of oil in the international market.

The minister who addressed members of the civil society organisations in Abuja yesterday also identified the ever-rising cost of subsidy regime in the country as part of the serious drain on the nation’s resources wondering aloud how between 2006 when she left the federal cabinet and last year when she returned, subsidy funding had grown from N256 billion to the equivalent of $13 billion yearly.

She said the development was unacceptable and implored the understanding and cooperation of the civil society community to demand accountability on how resources were spent on the people’s behalf because subsidy alone now was over 35 per cent of the Federal Government budget and more than the capital votes.

The meeting was called by the minister to brief the civil society community on the government’s transformation agenda.

She said: “ We all know that oil minerals account for 70 per cent of total budget revenue and oil is more volatile for economic growth. Should the oil price at the international market drop, we would be in for the worst because we no longer have any buffer to cushion the effect. What can a mere $3.6 billion saving do for a large economy like Nigeria should there be any serious global financial crisis again? That is what we have left in our Excess Crude Account because every month, the governors would not allow us to transfer Excess Crude Revenue to the Sovereign Wealth Fund, insisting that it must be distributed.

“This country depends on a product that is sold internationally and whatever happens there affects us. That’s why we need to have savings.

“Sixty per cent of our oil is sold to the U.S. and Europe and these countries are facing big economic problems. For instance, the U.S. has an unemployment rate of eight per cent, Spain 24 per cent and India 9.9 per cent.

“So if 60 per cent of our oil is sold to them, then we have a problem and any country that has great volatility such as ours will always have problems.

“Look at our ECA, which is about $3.6 billion. This account was about $20 billion when we left but the persistent withdrawal of funds and sharing by the three tiers in the name of fiscal federalism had dropped it. With this pattern of withdrawal, anything that happens to oil will lead to crisis in the economy.”

She added: “I subscribe to the subsidy phase-out and I will tell you why. Nigerians have refused to acknowledge the fact that we are subsidising neighbouring countries like Niger, Chad and we are allowing money to get to some corrupt people but of course there are genuine importers.

“So on the basis of the fiscality of it and the corruption we found out that this subsidy cannot be sustained as a country, even Ghana that has just found oil has phased out the payment of subsidy because it found out it cannot sustain it.

“So we must find other ways of solving this problem and cushioning this economy because we are still paying that subsidy, only that’s its partial.”

“As members of the civil society community, you should be able to understand the dynamics and ask questions about how the governors are saving for the rainy days.”

Meanwhile, the Federal Government is changing the way it recruits heads of its departments and agencies as it has opted for open advertisement of the positions in order to get the most competent Nigerians to occupy them.

To actualise this, President Goodluck Jonathan has directed Okonjo-Iweala and her counterpart   in the Health Ministry to advertise two top vacant positions – the executive chairman of the Federal Inland Revenue Service (FIRS) and the Executive Secretary of the National Health Insurance Scheme.

President Jonathan said at the presidential award for six beneficiaries from each of the geo-political zones of the country under the YouWin (Youth Enterprise With Innovation In Nigeria) jobs programme that the aim of the new focus in talent hunt was “for all Nigerians to compete so that we select the best. I don’t need to know who gets them. These are very sensitive offices that so many people are clamouring for. But I have asked them to advertise the positions and get a neutral body to interview the applicants. We are going to do that for some of these sensitive offices that need professionals because that is the only way this government can put round pegs in round holes and square pegs in square holes. And if we are able to do that, definitely, we can then get Nigeria to where these young people want it to be.”

The presidential award category under the YouWin is designed to reward one beneficiary from each of the six geo-political zones whose business plan was adjudged the best by a panel of distinguished entrepreneurs within that zone.

This award is in the sum of N500,000 to be given to each of the awardees, courtesy of First Bank (Nigeria) Plc.

President Goodluck Jonathan launched the YouWin programme in October 11, 2011 to address the problem of youth unemployment. It was aimed at supporting young entrepreneurs to establish new businesses and grow existing ones across the country.

Tags from the story
frontpage

6 Comments

  • We need to invest in Agriculture i.e.Mechanized farming,increase the Tax of all the millioneirs in the country.syphone the accounts of those corrupt leaders and reduce the areas of those people in house of assebly.If you do all these Nigeria will come back to normal possitions.

  • The matter is clear and simple. Let the National Assembly cooperate with the Presidency to save this nation from going under. Please all you Excellencies, Most distinguished and Honourables, have mercy, cut down your appetites for more and more money and allowances that lawmen in functional countries like the US or UK or South Africa or India, or Singapore or Brazil or in any of the countries serious with the development of their nations and keeping their economies afloat in a competitive world economy. If you cannot fear the rising anger of the people you are busy denying a small part of the commonwealth of Nigeria they own with you, then at least fear God who will not allow you to ride in more than one car at a time or sleep in more than one bed at a time or eat into two stomachs at a time od drink more champagne than the volume of your stomach and finnaly God will not allow you to be buried with any of the billions you stash away. You will only be obliged a 4ft x 7ft x 6ft parking lot for your unresting place when the bell tolls for you.
    The unbridled rape of our resources and squandering of the future of our children and unborn generations must end now. If not generations to come will dig up our graves and scatter the ashes of our bones they will burn with salt nd dissolve in acid solutions.
    Let these trillions we talk of make a difference in the lives of ordinary Nigerians. Nigeria does not start and end in Abuja, Lagos or state capitals of whited sepulcres.

  • Nigerians, will we ever get there? Will we ever make it? Will we ever hear the sound of the cockcrow at dawn? Do we really listen when globally-acknowledged economic experts are talking (or warning)? Time, and time alone, will tell.
    The fall of a leaf in autumn is a whispered warning to the living.

  • Its rather unfortunate that our leaders tend to forget their yesterday. Why do we fail to realize that it was the same Oil crisis of the ’80’s that plunged our economy into what we are facing today. How can we forget so soon after our leaders borrowed so much in the ’80’s coupled with the increasing level of corruption, carelessness and stupidity on their part the Oil crisis of the ’80’s plunged this country into a mess creating a huge external debt of 32b$+ of which the present minister of finance assisted the nation in addressing the issue leading to the cancellation of that debt.
    Now we are at it again, the voice of reasoning is calling and nobody seems to care. What is this money they share and forget the fact that we are not making head-way. Economic expert recently announced that the Brazilian economy has overtaken that of England. Hello Nigerian’s was this not the same Brazil that had the same economic issues like our ‘dear’ country Nigeria during the ’80’s. Or have we forgotten so soon that Brazil’s external debt to IMF then ranked amongst the largest?. Are you asking ‘How did they do it?’ Of course its no magic. It took share fiscal discipline to put their house in order and that is what the minister of finance is trying to do for our ‘dear’ country Nigeria, yet the agents of satan whom l consider the dullest in their school days find it difficult to see the voice of reasoning. How do we explain such huge variance from 20b$ to 3.2b$ yet we lack 1. Good roads. 2. Basic health facility. 3. Poor educational system. 4. Poor electricity supply. 5. Poor infrastructure facility. The list are endless. My fellow Nigerian’s if we do listen to the voice of reasoning and hold our leaders accountable, am sorry this entity call ‘NIGERIA’ may not last. The corruption level is on the increase and if we do not en-devour to make one or two sacrifice in-line with countries like Japan, South Korea, India, Brazil and our own brother Ghana, am sorry to say……….. .
    Madam finance minister l support your views may Jehovah God be with you.

Leave a Reply

Your email address will not be published. Required fields are marked *