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Tag: Okonjo-Iweala

  • Okonjo-Iweala: Soludo worst CBN Governor

    FINANCE Minister Dr. Ngozi Okonjo-Iweala  responded to former Governor of the Central Bank of Nigeria (CBN) Prof Charles Soludo’s criticism of the Nigerian economy in which he described the economic team as traders.

    In her reply, the minister described Soludo as the worst governor of the apex bank in the nation’s history.

    Dr. Okonjo-Iweala in a statement from her office noted that “the consolidation of the banking sector was a good policy idea of the Obasanjo administration but Soludo went on to thoroughly mismanage its implementation leading to the worst financial crisis in Nigeria’s history.”

    She alleged that after Soludo’s consolidation, “the regulatory functions of the Soludo-led CBN were very poorly implemented.

    Her words: “As Governor, he failed to adequately supervise and regulate the now larger banks – an anomaly in Financial Sector Supervision. In his time, there was very little separation between the regulators and the regulated which is a violation of a key requirement of Central Banking success.

     “This led to infractions in corporate governance in many banks as loans and other credit instruments running to hundreds of billions of naira were extended to clients without following due process, and several of these loans could not be paid back.

    “This massive accumulation of bad debts or non-performing loans as they are called in the banking sector meant that our banks were ill-positioned to deal with the global financial crisis when it hit.”

     The minister further accused Soludo of bringing the banking sector to its knees thus making sector to need a massive bailout by tax payers.

    She said: “This bailout was done by his successor (now the Emir of Kano) who cleaned up all the bad debts and transferred them to the newly-established Asset Management Company of Nigeria (AMCON), from where they are managed today.

     “Soludo’s single-handed mismanagement of the banking sector led to an incredible accumulation of liabilities that will cost tax payers about N5.67 trillion (being the total face value of AMCON-issued bonds) to clean up.

     “This amount is more than the entire Federal Government 2015 Budget, constitutes the bulk of Nigeria’s ‘contingent liabilities’ mentioned in Soludo’s article. It is only in Nigeria where someone who perpetrated such a colossal economic atrocity would have the temerity to make assertions on public debt and the management of the economy.”

     On Soludo’s comments on the mismanagement of the economy and the imposition of the austerity measures, the  minister lamented that “the fall in oil prices, a global phenomenon over which Nigeria has no control, has given every charlatan the opportunity to attack the economy, and by extension the managers of the economy.”

    Thorough examination of the facts on performance under the Jonathan administration, Dr. Okonjo-Iweala said, “will also reveal that at a time when global economic performance was mediocre, with GDP (Gross Domestic Product) growth averaging about three per cent per annum, Nigeria’s GDP growth – averaging about six percent per annum – is indeed remarkable.

      “Even more interesting is the fact that the oil sector did not drive this economic performance but the non-oil sector (agriculture, manufacturing, telecommunications, the creative economy and so on), which shows that the current Administration’s diversification objective under the Transformation Agenda is working.”

       She also took on the former CBN chief over his comment on inflation, Dr. Okonjo-Iweala argued: “This government managed to control inflation, which he Soludo, was not able to do during his time at the helm of monetary policy in Nigeria. When he left the Central Bank in 2009, inflation – which hurts the poor and vulnerable in the society the most – was above 13 percent per annum.  Now, inflation is at single-digit, at eight percent per annum.

     “This administration managed to stabilise the naira exchange rates, such that between May 2011 and the end of 2014, official exchange rates against the dollar rarely moved out of the N153 to N156 band. It is only with the recent dramatic fall in oil prices and the consequent impact on our foreign reserves that the exchange rate has become quite volatile.

    “The drop in oil price has been heavy and rapid impacting all oil producing nations significantly. Nigeria is no exception and appropriate fiscal and monetary policy measures are being put in place to manage this situation.”

    She alleged that a careless remark by Prof. Soludo when he was the Chief Economic Adviser to former President Olusegun Obasanjo when he hypothesised “a possible naira devaluation, condemned the naira to a free fall towards the end of 2003 so much so that not even the assurances given by the then CBN Governor, Mr. Joseph Sanusi or the President  that any plans to devalue the naira existed only in the head of the professor could halt the fall of the naira from N128 to the dollar in the official market to about N140 between September and December 2003.”

  • FDI not under threat – Okonjo-Iweala

    The Minister of Finance, Dr Ngozi Okonjo Iweala, has said the Foreign Direct Investment in the real sector of the economy estimated at about 20 billion dollars is not under threat due to the fall in the price of crude oil and the devaluation of the naira.

    She, however, admitted that the falling oil price and naira devaluation had impacted negatively on the performances of the stock market in recent times.

    The minister spoke as Guest of the Nigeria Television Authority Live Programme – Good Morning Nigeria, monitored in Abuja on Thursday

    Okonjo-Iweala said foreign investors are still pursuing their investment programmes in the country with enthursiasm, citing Nestle Nigeria Plc’s 150 million euros investment in the economy and the plan by General Electronics to build one billion dollars plant in Calabar as examples.

    She also stressed the importance of Direct Domestic Investment to the nation’s economy, saying the performances of Dangote Group of Companies, Honey Well Nigeria Plc, Flour Mills of Nigeria Plc and investors such as Sir Authur Eze have been very encouraging.

    The minister dismissed the misconceptions about the management of the Sovereign Wealth Fund, saying it was unfortunate that the state governments did not key into the SWF idea on time.

  • Soludo worst CBN Gov-Says Okonjo-Iweala

    Soludo worst CBN Gov-Says Okonjo-Iweala

    The Coordinating Minister for the Economy and Minister of Finance Dr. Ngozi Okonjo-Iweala has responded to former governor of the Central Bank of Nigeria (CBN) Charles Soludo’s recent critique of the Nigerian economy, describing Soludo as the worst CBN governor in Nigeria’s history.

    Okonjo-Iweala in a statement from her office noted that “the consolidation of the banking sector was a good policy idea of the Obasanjo Administration but Soludo went on to thoroughly mismanage its implementation leading to the worst financial crisis in Nigeria’s history.”

    The finance minister stated that after Soludo’s consolidation exercise, “the regulatory functions of the Soludo-led CBN were very poorly exercised. As Governor, he failed to adequately supervise and regulate the now larger banks – an anomaly in Financial Sector Supervision. In his time there was very little separation between the regulators and the regulated which is a violation of a key requirement of Central Banking success.”

    This Okonjo-Iweala said “led to infractions in corporate governance in many banks as loans and other credit instruments running to hundreds of billions of naira were extended to clients without following due process, and several of these loans could not be paid back. This massive accumulation of bad debts or non-performing loans as they are called in the banking sector meant that our banks were ill-positioned to deal with the global financial crisis when it hit.”

    Okonjo-Iweala accused Soludo of bringing the banking sector to its knees and as such the sector “required a massive bailout by Nigerian tax payers. This bailout was done by his successor (now Emir of Kano) who cleaned up all the bad debts and transferred them to the newly-established Asset Management Company of Nigeria (AMCON), from where they are managed today.”

    For the record Okonjo-Iweala stated that “Soludo’s single-handed mismanagement of the banking sector led to an incredible accumulation of liabilities that will cost tax payers about N5.67 trillion (being the total face value of AMCON-issued bonds) to clean up.”

    This amount she said “is more than the entire Federal Government 2015 Budget, constitutes the bulk of Nigeria’s ‘contingent liabilities’ mentioned in Soludo’s article. It is only in Nigeria where someone who perpetrated such a colossal economic atrocity would have the temerity to make assertions on public debt and the management of the economy.”

    Concerning Soludo’s comments on the mismanagement of the economy and the imposition of the austerity measures, the finance minister lamented that “the fall in oil prices, a global phenomenon over which Nigeria has no control, has given every charlatan the opportunity to attack the economy, and by extension the managers of the economy.”

    Thorough examination of the facts on performance under the Jonathan Administration Okonjo-Iweala said “will also reveal that at a time when global economic performance was mediocre, with GDP growth averaging about three percent per annum, Nigeria’s GDP growth – averaging about six percent per annum – is indeed remarkable.”

    Even more interesting she said “is the fact that the oil sector did not drive this economic performance but the non-oil sector (Agriculture, Manufacturing, Telecommunications, the Creative Economy, and so on), which shows that the current Administration’s diversification objective under the Transformation Agenda is working.”

  • Okonjo-Iweala’s characteristic understatement

    Okonjo-Iweala’s characteristic understatement

    For those determined to vote for President Goodluck Jonathan a second time, let them take counsel from the Minister of Finance and Coordinating Minister of the Economy (CME), Dr. Ngozi Okonjo-Iweala, whose continuing and characteristic understatements and underestimation of the harm being done to the Nigerian economy have become quite stifling. She speaks of ‘some challenges’ to the 2014 budget, and seeks to reassure the public that the problems confronting the economy are not such as should frighten or alarm the people. Oil production has slumped by a mere 180,000bpd, she says, and price of oil has slumped to less than $60 per barrel from a June peak of $114 per barrel, all juxtaposed against a 2015 budget benchmark price of $77 per barrel.

    But when she adds that by October, it was obvious that budget target revenue had fallen short by about a  trillion naira, and capital budget for the third quarter of 2014 could not be cash-backed to the tune of about N100bn, we were looking up the barrel of a looming disaster. Principally, the minister blames production shut-in consequent upon pipeline vandalism for the revenue shortfall, a vandalism Dr Jonathan has spectacularly been unable to tackle because he entrusted misfits with the task of pipeline protection. Arguing that oil price may never rise to $100 per barrel, the minister says the government will embark on a number of policy initiatives to diversify revenue.

    It is clear to everybody, except Jonathan diehards, that the Dr Jonathan government is incompetent to handle the economic disaster that is unfolding upon Nigeria. Many states are unable to pay salaries as and when due, and are even owing more than a month or two; the judiciary is also finding it difficult to pay salaries at month’s end; the federal government is also experiencing difficulty paying all its staff at once; and many companies are shutting down amidst contradictory and harsh fiscal and monetary policies. In spite of the government’s half-baked Sure-P programme, unemployment is galloping ahead as a welter of criminal activities, including kidnapping, insurgency and armed robbery, overwhelms the country.

    It does not require a soothsayer to recognise that should Dr Jonathan be re-elected, his government would in response to the mounting economic problems unleash a poisonous cocktail of hasty, panicky and half-baked policies upon the country. The policies would be harsh, even cruel, wide-ranging and, in view of the obvious fact that the economic problems were either engendered by the government or mishandled by the government, inadequate and misdirected. Dr Jonathan has spent the last six years or so of his government misdirecting the country and refusing to anticipate problems; another term in office would not suddenly lead him to a burst of fresh, insightful and appropriate policies. Consider, for instance, how barely one year into his presidency, the number of fuel (PMS) importers rose to about 140 in 2011 from a tolerable 19 in 2008, and subsidy payment also rose to about N2.5 trillion as at December 2011 from a budget figure of about N245bn. The mad looting, in the midst of other unaccounted spending totalling some $10bn or $12bn, has still not been fully explained at the end of Dr Jonathan’s first term.

    Apart from Dr Okonjo-Iweala’s overused World Bank orthodoxies, most of them jaded and misplaced, the Ministry of Petroleum has become both a law unto itself and a defiant cesspit of regulatory opaqueness, while pipelines protection has been callously and recklessly ceded to warlords and militants. In combination, these people and factors ensure that the national economy is not amenable to planning, laws and logic. Nothing will change should Dr Jonathan be re-elected. The president is himself tired, even overwhelmed, and his Finance minister absolutely fagged out after nearly six years in the economic saddle propounding much of the same panaceas day in and day out. Every patriot must be alarmed that a hint of their return is even being contemplated.

  • Okonjo-Iweala and the missing $30 billion

    From the look of things, the controversies over the missing $30 billion from the Excess Crude Account (ECA), as alleged by Comrade Governor, Adams Oshiomhole, have only just begun. If anything, we expect more of the fireworks in the coming days as both sides present different versions of the same account before the Nigerian public. Expect an administration that has been only too eager to pass off the mess it has made of the nations finances to the latest cycle of dip in global oil prices mounting the offensive as the lid is finally  lifted from its pretences that the nation’s current fiscal challenges are anything but largely internal.

    To say that a day like this would come is actually putting things rather mildly. Put in the context of the General Elections barely two months from now and rather the gloomy economic outlook foisted by the slump in global oil prices that has left the finances of most states on the brink, the current demand on the federal government to render accounts of its stewardship could not have been anything but compelling. Which is unfortunate really because the demands are not just elements of modern governance, they are supposed to be the critical pillars on which our federal practice is erected.

    So it was that Governor Oshiomhole would stir the proverbial hornets nest when he opted to task the federal government to come clean on its record keeping. In this, the governor neither said anything different or new from what his brother governors have expressed at one point or the other about the curious arithmetic in which higher differentials between the budget benchmark and actual sales price of crude have come to mean less and less in the piggy bank!

    With perhaps the exception of the federal government, the scenario which the governor had sought to paint was all too familiar: how come that a nation which has in the last three years assumed a budget benchmark of between $77 to $78 dollars but sold at the average price of $108 a barrel cannot resolve this basic arithmetic?  Put in another context: At a surplus of $30 a barrel and using a projected 2.3 million barrels crude production, how come the ECA is a paltry $3 billion when we should be talking of a figure close to $30 billion?

    Ordinarily, one would assume that the issue is so simple and straight-forward as not to lend to any obfuscation.  It comes to the simple arithmetic of how much crude the nation pumped for the period and the applicable price – minus the operational and marketing expenses.

    The difference of course is that the Comrade Governor thinks there is a gaping hole that demands thorough investigation. Most Nigerians would tend to side with him.  On her part, the nation’s finance chief thinks the governor is playing mischief; she insists that the complex econometric formulae used for the federation account is beyond the ken of simple minded Nigerians and that no dime is missing! Left to the minister, the irrepressible governor ought to be in the dock for “going public with a sweeping, political allegation based on casual, back of envelop calculations!”

    Let’s look at the minister’s defence against the weighty issues raised by the governor more closely. First, she says that the allegations are as “totally untrue”. To the extent that her version of “truth” is at least unknown to the governors or even anyone else for that matter, one assumes that it is one dark secret known only to her and her principal!

    Secondly, she charges that “the comments reflect once again, the unfortunate tendency of some political players to politicise the management of the economy on the basis of half-truths and sundry distortions”. The familiar word again – politicisation! And what’s the correct picture? Here, her self-righteous rage is supposed to be taken as sufficient defence!

    And then of course her reference to the Federation Accounts Allocation Committee meetings – something I consider even more amusing: “Anyone who is familiar with the Federation Accounts Allocation Committee process knows that this is simply not true. The meetings are held every month and commissioners of finance and other officials represent their states and agreements are reached on issues, including sharing of proceeds from the account”!

    I assume that the minister could not be referring here to the Fuji House of Commotion described as monthly FAAC meetings. Had the minister bothered to check on the proceedings in the last three years, she would have found that the picture is nowhere near her portraiture!

    However, beyond the pathetic attempt to muddle things up, what must stand as particularly galling is the insufferable arrogance underlying the minister’s so-called response. In her barely disguised irritation, she may well have said that state governments – as joint-owners of the federation pool – are ignorant, or that they have no business knowing how the accruals into the account are determined!  That’s how bad things can get – the very situation responsible for the current morass in which the nation is said to lose 20 percent of its oil revenue to a cartel of oil thieves!

    Beyond all of these however, it seems that the nation may finally be coming to terms with one profound character flaw in one of the more foremost players in the federal executive – her penchant to trade in cheap blackmail. I have not even here added one proven case of duplicity against her person such as when, contrary to verifiable records from the Nigerian Customs Service at the height of the controversies over the abuse of duty waivers, her ministry actually granted import duty waivers to the tune of N1.4 trillion in three years as against her claim of N171 billion!

    And by the way, only the minister pretends that the latest charges from the governor are anything new. She would admit that much when she observed that Rivers State Governor, Rotimi Amaechi has in November 2013 similarly alleged sharp practices in the management of the federation account to the tune of $5 billion. May I remind her that the issue has actually provoked nearly a dozen editorials without the government nearly succeeding in laying out its case?

    The expectation this time would be for the minister, along-side her counterpart in the petroleum ministry, to open the books to Nigerians for scrutiny. After all, she knows enough to affirm that federal government which she represents is right – and the rest of us – wrong. Opening the books to the public would certainly achieve far more than what the current low road of sophistry would ever do.

    Here is wishing you, dear readers, a happy new year!

  • FG SUPPRESSING MISSING $20BN OIL MONEY AUDIT REPORT –APC

    FG SUPPRESSING MISSING $20BN OIL MONEY AUDIT REPORT –APC

    The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala yesterday  denied claim by Governor Adams Oshiomhole of Edo State that $30 billion was missing from the Excess Crude Account.

    She dismissed the governor’s allegation as shocking and totally untrue.

    The minister in a rebuttal through her Special Adviser, Paul Nwabuikwu, said the governor’s statement “gives the impression that the Federal Government sits alone in secret and doles out whatever it wishes to the states from the Federation Account. But anyone who is familiar with the Federation Accounts Allocation Committee (FAAC) process knows that this is simply not true.

    “There is no $30 billion missing from the Excess Crude Account as alleged by Governor Oshiomhole. How can such a huge amount be missing from the ECA and the Edo State governor will be the only one privy to this” Nwabuiku asked, adding: “it is instructive that the Edo State government did not table this allegation before FAAC for investigation or clarification before going public with a sweeping, political allegation based on casual, back of the envelope calculations.”

    Governor Oshiomhole, the statement admitted, “correctly observed that the economy would be in better shape today if we had saved more for the rainy day. But he failed to recall that the Federal Government’s strong advocacy for a low budget benchmark and greater savings in the ECA articulated by the Coordinating Minister was repulsed by some governors. There is no doubt that oil theft is a challenge but this too would have helped.”

    However, the minister did not share what her spokesman called Oshiomhole’s overly bleak view of the country’s economic prospects, saying:  “Yes, the challenges are great and cannot be wished away but as Moody’s, the international ratings agency and the IMF confirmed recently, the economy is resilient despite the oil price crash and we retain some advantages as we confront these challenges.”

  • 2015 Budget: Nigerians to pay more tax- Okonjo- Iweala

    2015 Budget: Nigerians to pay more tax- Okonjo- Iweala

    Sequel to the dwindling oil revenues, Nigerians are expected to pay more tax in the coming year to shore up the shortfall, the Minister of Finance, Dr. Ngozi Okonjo-Iweala, has said.

    “We’ve tried to broaden the tax-base,” Okonjo-Iweala, who spoke with reporters shortly after laying the budget before the House of Representatives, said, adding that the Federal Government has also “closed many loopholes and leakages.”

    The minister further disclosed that the nation’s economy will be driven mainly by the non-oil sector, considering the global oil price slide.

    “We’ve speeded up audit, we’ve closed some exemptions and all of these will bring additional revenues into the coffers,” she said.

    The 2015-2017 Medium Term Expenditure Framework (MTEF) presented to the National Assembly, shows that federal government’s net revenue projection from non-oil sector was N2.075 trillion after costs and deductions for 2015, while net oil revenue was put at N3.955 trillion after costs, deductions and derivation.

    Okonjo-Iweala, who came with six ministers including Senator Bala Mohammed, the FCT Minister, said despite the oil slide, the federal government will ensure regular payment of pensions, salaries and wages to the federal workers.

    While giving an outlook on the 2015 budget proposal, she said:

    “I have laid the budget on behalf of his Excellency, Mr. President. This budget is based on few indicators, the $65 a barrel benchmark and we are going to stick to it for now despite the declining prices because we feel the average price next year will be around $65 to $70. The production level is 2.27 million barrel per day.”

  • 2015 budget focuses on diversification of economy -Okonjo-Iweala

    2015 budget focuses on diversification of economy -Okonjo-Iweala

    The Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, on Wednesday said the 2015 budget is structured for the diversification of the economy.

    Okonjo-Iweala spoke to reporters after laying the 2015 budget estimates before the Senate in Abuja.

    She said the budget seeks to protect average Nigerians.

    She said: “We have submitted the 2015 budget, the highlights are, the benchmark price for oil is $65 and production figure of 2.27m bpd.

    “We have estimated a Gross Domestic Product growth based on the circumstances of the country, which will be about 5.5 per cent.

    “This is down from the 6.35 per cent we had earlier from the National Bureau of Statistics, which is still one of the best growth rate in the World.

    “The budget seeks to protect the average Nigerian because the key is that it focuses on the diversification of the economy and it has been working because food prices have not risen in spite of the depreciation of the Naira.

    “If you check all around the markets, you will observe that the average Nigerian is still enjoying stable food prices.

    “In some places like Enugu, the prices of garri has even fallen. Inflation rate as estimated by the National Bureau of Statistics has fallen from 8.1 to 7.9 per cent.

    “This budget really focuses on moving us to diversify the economy and raise non oil revenue.

    “We have made up for the fall of $13 per barrel, from $17 to $65, by raising non oil revenue through various types of taxes and policies.

    “The surcharge on luxury goods is there, plus additional tax efforts to close leakages in revenue.”

    Senate President David Mark said the Senate would devote two plenary sessions to consider the budget before approval.

  • Okonjo-Iweala presents 2015 budget to NASS

    Okonjo-Iweala presents 2015 budget to NASS

    The Minister of Finance, Dr. Ngozi Okonjo-Iweala, on Wednesday presented the 2015 budget estimates to the National Assembly.

    The document containing the budget estimates was presented to the two chambers of the National Assembly during separate sessions on Wednesday.

    Details later…

  • 2015 budget: Okonjo-Iweala begs Tambuwal, House leaders

    2015 budget: Okonjo-Iweala begs Tambuwal, House leaders

    Ahead of today’s laying of the 2015 budget on the table for National Assembly’s consideration, Minister of Finance Dr. Ngozi Okonjo-Iweala, yesterday pleaded with House of Representatives Speaker Aminu Tambuwal to facilitate the bill’s passage.

    There has been no love lost between the executive and the Speaker since he defected from the Peoples Democratic Party (PDP) to the All Progressives Congress (APC).

    Tambuwal’s security guards have been withdrawn and he and some of the members were prevented from accessing the National Assembly complex on November 20.

    They were also tear gassed.

    In response to the police invasion and the declaration by Inspector General of Police Suleiman Abba that he does not recognise Tambuwal as Speaker, the House has restricted policemen to the gate of the complex.

    A principal officer, who spoke in confidence with our correspondent, said: “The Minister of Finance met with Tambuwal to solicit the support of the House for easy passage of the 2015 budget.

    “For about two hours, she begged the Speaker and other House leaders, including the chairmen of the House Committee on Finance and Appropriation, on the presentation of next year’s Appropriation Bill.

    “There is need to fast-track the budget in the overall interest of the country. The Minister decided to by-pass the legal cold war between the Presidency and the House to make a strong case for the nation’s economy.”

    Another principal officer said: “Okonjo-Iweala briefed the session on some realistic projections surrounding the 2015 budget, including the $65 per barrel benchmark.

    “She spoke on the likely challenges the nation might face with the implementation of the 2015 budget and the plans put in place by her ministry to manage these shocks.

    “She marshaled her points in an emotional manner.

    “She came to plead with the House to put the survival of the economy above petty politics overshadowing the activities of the House.

    “The nation’s economy will be in dire straits if the row over the plot to force the Speaker and others to vacate their seats festers.

    “I think, it is this kind of rapprochement that the nation needs. Tambuwal assured the Minister of the readiness of the House to facilitate the quick passage of the budget whenever it is presented or laid.”

    Notwithstanding the visit of the Minister, Tambuwal staved off the plot to force him to vacate his seat following House decision to stop the police from manning all the gates to the National Assembly Complex.

    Policemen have now  been restricted to the entrance checkpoint, which is about two to three kilometres to the main gate of the National Assembly Complex.

    Instead, sergeants-at-arms were directed to take over security in the National Assembly.

    Besides the security build-up, it was gathered that the rejection of an ex-parte application to sack Tambuwal by Justice Ahmed Mohammed put the anti-Speaker’s camp in disarray and the plot failed.

    Those behind the plot have also discovered that they could not muster the required number to force Tambuwal  to vacate his seat because of issues over primaries, which had forced some members to defect from the ruling Peoples Democratic Party(PDP) to other parties.

    A source said: “We did not want a repeat of the invasion of the Assembly complex by the police. So, we haveprepared ahead to forestall any attempt to use the police to force Tambuwal to vacate his seat. We took pre-emptive measures.