A feel for Coordinating Minister-in-Charge of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala. In her first innings managing the nation’s purse under former President Olusegun Obasanjo, comments about her performance were largely laudatory – even fawning.
She came to her role preceded by impressive career achievements that had seen her function at the very top of World Bank management. Her reputation was burnished no end when she led the negotiations that saw Nigeria exiting her debt obligations to the Paris Club.
It was no surprise therefore that President Goodluck Jonathan would scurry back to her doorstep whilst searching for a steady hand to run things after his 2011 general election victory.
A little over two years after slipping almost seamlessly into her old role, the magician’s aura has worn off a bit. Not even the enhancement of her portfolio and powers by making her some sort of super-minister has shielded her from the flak triggered by frustration over a less-than-dramatic turnaround in Nigeria’s economic fortunes.
Until now, she was one of the few government officials whose personal achievements and comportment spared them the sort of vicious attacks reserved for the President and some of her cabinet colleagues. Clearly, being the butt of strident criticism is not an experience she has found amusing – judging by some of her reactions.
I suspect that the most painful would have been remarks questioning her ability to continue as Finance Minister. The Nigeria Governors Forum (NGF) demanded she quit if could no longer manage the economy in a way that ensures that obligations to states were met. Although she was quick to dismiss the call, ever since it has been a steady dripping of bad economic news in a manner akin to Chinese water torture.
Finance Commissioners who gather in Abuja for Federation Accounts Allocation Committee (FAAC) meetings have cried out in alarm when they received less than they expected. If this was a one-off incident it might have been easy to dismiss. Unfortunately, with billions still to be paid to the states many have alleged that the nation was broke!
That is a very strong claim to make. It is particularly embarrassing if you happen to be the one superintending things because it speaks to you your ability to manage the country’s affairs. Okonjo-Iweala obviously understands this and has launched a robust defence – insisting that rather than being broke, what we are experiencing was just a little cash flow crisis.
Appearing before a special Senate committee to defend the performance of the 2012 budget she said: “The country is absolutely not broke. And I want to repeat that again, because there are those who would want to push that idea. The country is not broke, (though) the country may have cash flow problems from time to time. That is normal and is to be expected because a person may be very wealthy, he may have a lot of assets but at a particular point in time the stream of income may delay.
“You are running a business, you can be assets rich therefore you cannot be broke but you may have a temporary month when the flow is not as it should be because the price of that product may be lower. The time for you to collect money from that product may take a little longer because you extended credit to people by selling to them and then telling them you will collect later. So, sometimes there may be temporary cash flow issues, but the country broke? The answer is no.”
Reading through the minister’s comments I was forced to review my understanding of the meaning of the word ‘broke.’ I understand that a diplomat, or an economist may explain everyday concepts in ways different from which laymen may put them, still all the dictionaries I consulted distilled the word to mean a ‘lack of funds.’
Just this past week Edo State Governor Adams Oshiomhole suggested that rather than being a storm in a tiny tea cup, the inability of the Federal Government to meet its financial obligations to states was potentially disastrous.
“I don’t know if the federal government is broke but I know there is serious crisis and it is unprecedented in the history of this country. For the first time since 1999, allocations can no longer come as at when due to states. I have been involved in trying to understand what the reasons are and I have not seen anything yet. Whether we use the word broke or you deny the word broke, the truth is that there is financial crisis in Nigeria which has very serious national security implications,” he said.
In terms not too different from this, Oshiomhole’s Kwara counterpart, Abdulfatah Ahmed, in a recent interview took the position that Nigeria’s finances were in dire straits.
Statistics may suggest that the economy is growing at a particular rate, and that Nigeria is about to overtake South Africa, or that in this country investors get the highest return on investment – making it a preferred destination for foreign direct investment.
But pretty figures are one thing and everyday reality a different matter entirely. There’s no way to dress up the fact that in an economy supposedly doing so well, government cannot meet its obligations. In truth some states may be unable to pay salaries soon because they depend largely on the monthly federal cheque.
You may dismiss them as indolent for not looking at other ways to boost their earnings to make up for whatever shortfall may occur at the Abuja end, still the constitution entitles them to the handout which the federal government has been unable to deliver.
The Academic Staff Union of Universities (ASUU) strike continues with no end in sight. The Finance Minister has already said Nigeria does not have the money to pay what it agreed with the lecturers. Until that accord is renegotiated, this is another obligation which the government cannot meet.
Okonjo-Iweala spoke to the Senate like an economist – talking in terms of how a man can be rich in assets and cash poor. Unfortunately, even the value of the assets that we set such store by keep diminishing by the day.
More countries in Africa are discovering oil, the United States – one of our prime markets is celebrating shale oil. With sophisticated thieves helping themselves to huge amounts of crude in the Niger Delta, not only are we losing what should have accrued directly to the nation, external markets are also shrinking as some buyers are not too concerned about the origin of the crude they are buying.
Very soon the markets may whisper very loudly to us that our so-called assets are not worth what they used to be. It’s time to face up to the fact that technically speaking, we may not be broke, but Nigeria is in dire straits financially. Accepting that diagnosis will be the first step towards recovery: continued denial will not make the next FAAC meeting more pleasant.
