A former Minister of Finance, Dr Ngozi Okonjo-Iweala, has linked the failure of former President Goodluck Jonathan’s administration to save for the rainy day, despite oil boom, to the insistence of state governors that funds in the Excess Crude Account must be shared.
According to Okonjo-Iweala, as finance minister, with the backing of Jonathan and ex-Vice-President Namadi Sambo, she had a running battle with state governors, who insisted that there was no need to save despite that crude oil was selling at $86 per barrel.
The former minister said this in her book, “Fighting Corruption Is Dangerous: The Story Behind the Headlines,” published recently.
President Muhammadu Buhari who succeeded Jonathan has been blaming his inability to deliver on his critical campaign promises on the shortage of funds.
Buhari had lamented that the government was broke due to the failure of the previous administration to save when oil price was high.
The country went into an economic recession in 2016.
But Okonjo-Iweala, who doubled as Coordinating Minister for the Economy under Jonathan, identified the Minister of Transportation, Rotimi Amaechi, who was then Rivers State Governor and Chairman of the Nigeria Governors’ Forum; the National Chairman of the APC, Adams Oshiomhole, then Edo State Governor; and Governor Rauf Aregbesola of Osun State, as the most strident voices against the proposition to retain funds in the ECA for the rainy day.
According to Okonjo-Iweala, the National Economic Council meetings used to turn stormy whenever the debate about sharing what was in the ECA came up, noting that only a few governors, such as then Governor Peter Obi of Anambra State, supported the argument for saving but their voices were drowned by the majority who insisted that the country was already experiencing the rainy day and the money should be shared.
Okonjo-Iweala, who had her first stint as finance minister between 2003 and 2006 under former President Olusegun Obasanjo, noted that Obasanjo’s administration created the ECA to solve the problem of Nigeria’s volatile revenue.
“The idea was that during good times, when the price of oil was high in the international markets, Nigeria could budget domestically at a lower price, save the difference and then have these resources available during bad times when international oil prices were low. In this way, the budget could help smooth out government expenditures and consumption,” she said.
The ex-finance minister noted that between 2004 and 2007, Obasanjo’s administration was able to save $22bn, which the late former President Umaru Yar’Adua’s administration fell back on, to prevent the country from slipping into an economic recession during the global financial and economic crisis that occurred between 2008 and 2009.