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Re-The Economist, what?


Kemi Adeosun

Kemi Adeosun

Having stumbled on an article in The Guardian of Tuesday, August 16, 2016, initially attracted by the headline “The Economist, what? An attraction that tended me to view possibly a perspective on way forward to negotiate the nation’s economic situation from its present perplexed state, but was jolted by seeming innocuous attribution of Treasury Single Account (TSA) to the current Minister of Finance, Mrs. Kemi Adeosun by the Economist magazine in an edition, as a basis for the rejoinder by one Mr. Ebun Asagbe. It is difficult not to attribute Mr. Asagbe’s commentary as one of those hatchet public relations mediocrities, as he unwittingly proved to be, definitely to do the bidding of his pay masters at apportioning credit where it does not belong.

The onus on who brought the concept of Treasury Single Account to national consciousness and by extension to governmental cycle lies on who despite possible criticism of full implementation, probably to massage some ego and political correctness, took the whole hog and political will to bring it to full implementation despite whose ox is gored. In this case credit should be appropriately placed at the doorstep of Mrs. Kemi Adeosun, the present minister of finance. I have equally listened to criticisms from some quarters on the hurried full implementation of the TSA by the Buhari’s government. The argument has been that it has considerably reduced the capacity of the commercial banks to lend to critical sectors in order to enhance the productive capacity of the real sector, save jobs and improve on the nation’s GDP. The abuse that it was subjected to by MDAs and their collaborative banks warranted the need for thorough accountability of public funds, a cardinal agenda of the present government.

These funds warehoused in the money deposit banks are lent back to government through the CBN in the process of mopping up excess liquidity through the issuance of treasury bills in their monetary policy responsibility at alarming interest rate. Whose interest it then serves! If not MDBs, using government idle funds to rip off the nation. But in its wisdom the CBN has decided to enhance the capacities of the banks by reducing the cash reserve ratio (CRR) from some 30 per cent to 22.5 per cent. Despite this reduction, the commercial banks have shown their reluctance to lend to the productive sectors like agriculture and manufacturing, but rather prefer short-term trading and round tripping.

Worth mentioning is the integrated personnel and pay roll information system (IPPIS) cited in Mr. Asagbe’s article, of which he tried fruitlessly to cede credit where it does not belong. It is to every follower of Nigeria’s history, most especially in the last government, that despite the acclaimed introduction of IPPIS, the incident of ghost workers was quite intractable. We were daily being regaled by the number of non-existent workers yanked off from the workers’ pay roll. In fact, some of our senior citizens died on queue in an endless exercise of pension verification. We were inundated with the capturing of existing real workers and pensioners by the former Finance Minister, Okonjo-Iweala. Despite the process initiated and implemented by the last government, the Buhari government met a blotted civil servant, of which tens of thousands were never genuine, an indication of how pervasive corruption was then despite acclaimed safe guides.

While she served as Commissioner of Finance in Ogun State, Mrs. Adeosun distinguished herself by bringing sanity in the disbursement of Federal Allocations meant for the local government. The contraption called State and Local government Joint Account was largely made redundant. That step she undertook must have endeared her to President Buhari despite hollow criticism of her appointment as finance minster even by many respected academics, some of who made suggestions that the expertise of Okonjo-Iweala should be sought at this critical period. Suggestions that were not distilled from rational view point.

The question I readily ask when this is conjured is what practical antecedent could support this line of thought. It must be readily stated here that being a former managing director of the World Bank does not make one infallible in economic management of a nation. I will buttress my point with scary decisions taken by her in her sojourn as minister of finance in both the Obasanjo and Jonathan regimes that tended to question her patriotism and competence.

It is very evident that she was at the lead delegations that helped to negotiate Nigeria out of the club of creditor nations and institutions in 2006. In fact we paid some humongous sum, one-off to merit the obliteration of the other component of the debt. At the end of the deal, Nigeria’s debt was at zero sums. This period was one relative to boom in forex, owing to substantial inflow of petro-dollars, with a corresponding bulging of net foreign asset. The debt cancellation saved us enormous resources that would have been used for debt and debt-servicing. The greatest undoing at that time was not seizing that opportunity to build a resilient economy insulated from the cyclical burst and boom of international price of crude oil; through genuine diversification to other sectors we have comparative advantage such as agriculture and manufacturing. Even the almost $16 billion expended in the power sector couldn’t generate and distribute up to 5,000 megawatts whereas South Africa with a far less population was generating close to 50,000 megawatts.

Despite that period of relative boom, Nigeria started accumulating further debts that came to a head wing on Madam Okonjo’s second assumption in 2011 as Minister of Finance and Coordinating Minister of the Economy, a subtle way of according prime ministerial position or vice presidency at the exclusion of Namadi Sambo, who to greater part remained a proverbial spare-tyre that was never used for a whole journey. On assumption she released a bomb shell that our Debt to GDP ratio was within the threshold permissible for an economy like ours, hence the need for further borrowing.

The humongous Abacha loots that were repatriated in tranches could not be accounted for properly. There were cases where she unilaterally transferred parts of the recovered loots to the office of the National Security Adviser based on probably mere written note from President Jonathan, without any appropriation from the National Assembly. She even confessed of meetings she had with Sambo Dasuki, the NSA, after which some incredible sums were transferred without National Executive Council input.

Have we so forgotten of the altercation that ensued between her and Governor Adams Oshiomhole over the latter’s questioning of her unilateral decision to withdraw over two billion dollars from the Excess Crude Account of which she initially stated that it was the National Council of State, through the Federal Account Allocation Committee (FAAC), represented by the commissioners of finance. A claim that was refuted by the governor. She recanted and placed the approval on former President Jonathan. The sum she claimed to have used to pay Independent Petroleum Marketers Association (IPMAN) and Major Oil Marketers Association of Nigeria (MOMAN), of which they claimed receiving only one billion dollars, leaving the remaining one billion dollars unaccountable.

Akujobi is a public policy analyst and lead director, Centre for Economic Development, Democracy and Peace in Nigeria (CEDDAP).

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