Former Education minister, Mrs. Oby Ezekwesili lied when she alleged that the administrations of late Umaru Y’Ardua and Goodluck Jonathan squandered $67bn in reserves left by the Olusegun Obasanjo’s administration, the Federal Government said on Sunday.
Minister of Information, Labaran Maku described the allegation as “factually incorrect,” also faulting Ezekwesili on her swipe at the education sector where she was Minister. He described the remark as self-indictment because the former minister has nothing to show for the N457bn she received between 2006 and 2007
“At the end of May 2007, Nigeria’s gross reserves stood at $43.13bn, comprising the CBN’s external reserves of $31.5bn, $9.3bn in the Excess Crude Account (ECA), and $2.18bn in the Federal government savings,” Maku told the media in Abuja. “These figures can be independently verified from the CBN records. The figure of $67bn alleged in her statement is, therefore, clearly fictitious.”
Speaking on the use of reserves Maku said it is fallacious to say that the nation’s external reserves were dipped into or misapplied by the Federal Government, as the Federal Government does not have such power.
“Like in other countries, the management of external reserves is one of the statutory mandates of the Central Bank of Nigeria (CBN). Section 2 Sub-section (c) of the CBN Act (2007) states that the bank shall ‘maintain external reserves to safeguard the international value of the legal tender currency,’ or in other words, defend the value of the Naira,” he said.
“No President since the democratic dispensation has contravened this Act. Other uses of the reserves are to settle both public and private sector foreign currency obligations of Nigeria, including the importation of goods such as equipment for power sector.
“Whenever a ministry or agency of government needs to incur approved expenditure in foreign currency (e.g. payment of goods and services, settlement of external debt, etc) it must provide the Naira equivalent to the CBN before the bank sells the required foreign currency. As a former World Bank Vice-President for Africa, surely, Mrs. Ezekwesili must have known this.”
The information minister also explained the roles played by oil prices and global financial crisis in the state of the country’s reserves, saying: “Since President Obasanjo left office, the reserves have experienced fluctuations, rising from $43.13bn in May 2007, peaking at $62bn in September 2008 during the Yar’adua/Jonathan Administration when oil prices peaked at $147 per barrel, and falling subsequently to a low of $31.7bn in September 2011.
“This fall in reserves was a result of the vicissitudes of the global financial crisis, which caused CBN interventions in the currency market to defend the value of the Naira. The Excess Crude savings, a component of the reserves, was also used to stimulate the economy at the height of the global financial crisis to the tune of about $1bn (or 0.5 per cent of our 2009 GDP).
“As a result, Nigeria is one of the few countries in the world that did not seek assistance from international financial institutions. It should be noted that the fiscal stimulus used to shore up the economy during that period was shared by all three tiers of government, including commitments of about $5.5bn made under the Obasanjo Administration for power projects.”
He disclosed that the present administration has restored macroeconomic stability against the backdrop of global economic uncertainty, slow growth in the United States and high unemployment and unsustainable debt in Europe.
“In the first three quarters of 2012, Nigeria’s economy grew by about 6.4 per cent and is set to continue at a similar pace in 2013, according to independent forecasts,” he said. “We have reduced our fiscal deficit to only 2.17 per cent of GDP in the 2013 budget, while rebalancing our spending in favour of capital expenditure.”
These achievements, he noted, have already received strong endorsement from international ratings agencies.
“At a time when many advanced and emerging markets are being downgraded, Fitch and S&P have upgraded our sovereign credit ratings. The inclusion of Nigeria’s sovereign bonds in the emerging market bond indices of JP Morgan and Barclays also testifies to the growing confidence of the international investment community in our economy.”
Returning to Ezekwesili’s, he described her interrogation of the educational system as “somewhat disingenuous and hypocritical.” as during her tenure as Minister of Education between 2006 and 2007, she collected a total sum of N352.3bn from direct budgetary releases.
“In addition, she received about N65.8bn under the Universal Basic Education Commission (UBEC) Fund, and over N40bn from the Education Trust Fund (ETF) during her time as Minister of Education,” he said.
“In view of these humongous allocations, a few legitimate questions arise. What did she do with all these allocations? What impact did it have on the education sector? One wonders if our educational system would have been better today if these allocations were properly applied.”
