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FG fires back at Ezekwesili on $67b reserves squander claim

By on January 28, 2013

The Federal Government has denied the allegations levelled against it by Former World Bank Vice President for Africa, Oby Ezekwesili that it squandered $67billion reserves, which the Olusegun Obasanjo administration left, saying only $43.13billion was left.

Responding to the allegations, the Information Minister, Labaran Maku said Ezekwesili was misleading the public, adding that the former Education Minister should provide the N352.3billion she took from office.

Maku said it was fallacious for Mrs. Ezekwesili to think that Jonathan and Yar’Adua misappropriated the funds, although Mrs. Ezekwesili said they should account for the money.

Speaking to reporters in Abuja about the issue, the minister of information stated that the reserves had experienced fluctuations by “rising from $43.13 billion in May 2007, peaking at $62 billion in September 2008 during the Yar’Adua/Jonathan Administration when oil prices peaked at $147 per barrel, and falling subsequently to a low of $31.7 in September 2011.”

“The statement by the former World Bank Vice President that the governments of Presidents Musa Yar’Adua and Goodluck Jonathan have squandered $67 billion in reserves (including $45 billion in external reserves and $22 billion in the Excess Crude Account) left by the Obasanjo Administration at the end of May 2007 is factually incorrect.

“At the end of May 2007, Nigeria’s gross reserves stood at $43.13 billion – comprising the CBN’s external reserves of $31.5 billion, $9.43 billion in the Excess Crude Account, and $2.18 billion in the Federal Government’s savings. These figures can be independently verified from the CBN’s records. The figure of $67 billion alleged in her statement is therefore clearly fictitious.

“However, since President Obasanjo left office, the reserves have experienced fluctuations, rising from $43.13 billion in May 2007, peaking at $62 billion in September 2008 during the Yar’Adua/Jonathan Administration when oil prices peaked at $147 per barrel, and falling subsequently to a low of $31.7 in September 2011.”

Maku added, “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 $1 billion (or 0.5 percent 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 $5.5 billion made under the Obasanjo Administration for power projects.

“On the use of reserves, it is fallacious to say that the nation’s external reserves were dipped into or misapplied by the Federal Government. It is important to note that the Federal Government cannot dip its hands into external reserves.

“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” – in other words, to defend the value of the Naira.

“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.”

Maku asked Mrs. Ezekwesili give a detailed explanation of how she spent the N352.3billion she collected while in office.

“We also found Mrs. Ezekwesili’s interrogation of the educational system somewhat disingenuous and borderline hypocritical. During her tenure as Minister of Education between 2006 and 2007, she collected a total sum of N352.3 billion from direct budgetary releases. In addition, she received about N65.8 billion under the Universal Basic Education Commission (UBEC) Fund, and over N40 billion from the Education Trust Fund (ETF) during her time as Minister of Education.

“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.

“No one disputes that Nigeria still faces challenges, most of which were built up over a long time. However, we need to acknowledge the significant achievements of this Administration in the aftermath of difficult but necessary macroeconomic and structural reforms being implemented in the country.

“This 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. 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.”

“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.

“We have also focused our attention on removing the bureaucratic and structural bottlenecks in the economy to enable the private sector create more jobs for our youths.

“In the power sector, most Nigerians will attest to improvements in power supply even as the 10 new power plants being built by this Administration are yet to fully come on stream. There have also been improvements in rail services; for example, the Lagos — Kano rail line is now operational and serving Nigerians for the first time in over 20 years. There have been significant improvements in road development; aviation – in particular refurbished terminals; and agriculture, where new jobs are being created every day.

“Serious work is ongoing to improve our ports and lower the cost of doing business and the cost of consumption. The government has further launched a number of initiatives targeted at creating jobs for our youth, including support for entrepreneurship through the YouWin Programme; work for the unskilled through the Community Services programme of the Subsidy Reinvestment and Empowerment Programme; and support for unemployed graduates through the Graduate Internship Programme.

“This administration is squarely focused on promoting a stable, non-inflationary, and inclusive economic environment to ensure that Nigerians can live better and more fulfilled lives.”

“Acts of threats and vandalism should be condemned by all. The challenges we have now are more, let us not create more problems for the country. We must give peace a chance,” he added

Maku said President Jonathan should not be criticized for the dawdling pace of action by the corruption agencies, saying, “All the public officers accused of corruption, the cases are in court, and people have continued to condemn the President for this. The President is not the one that will commit these persons to jail. There are institutions in charge.”

Ezekwesili refused to confront Maku’s response, she said, “All I have asked for is just accountability for the resource flow. Considering what was left by ex-President Olusegun Obasanjo and the increasing oil price per barrel over the years, why is it that our reserve has not grown and only depleted? Even the Excess Crude Account (ECA) is depleted.

“All I simply said is where is the money? What has it been used for? They are not answering the question.”

On the claim of untrue figure levelled by Maku, Ezekwesili said, “Go and research, you will know actually what was left by Obasanjo administration. The records are there.”



    January 28, 2013 at 2:07 pm


  2. Akinrinlola Ayorinde

    January 29, 2013 at 3:57 pm

    We can all see how Maku is making mouth because he’s part of the present administration. Help us to tell me that we don’t need figures all we need is the account of how the money was spent. Am so sure that if he’s no longer in the administration he’s going to do more than Oby.