WHEN SAVING IS ILLEGAL
By Issachar Odion
am no economist. Then again, neither are a whole lot of the people who have written or spoken in recent times on the economic issues prevalent in our nation today. We are, however, stakeholders; after all, it is our country. We live here, earn a living here; our children attend schools here and what have you. Even those of us who are not resident in the country have family members who are, and probably some investment or the other here. So, we are all stakeholders.
Since the first alarm was sounded on the falling prices of crude oil, many of us have been following the news ardently, silently hoping for a reprieve of some sort. It has been several weeks since the first news broke, and though several actions and reactions have taken place since then, the narrative of the general populace has not changed; we are still in the ‘finger pointing’ phase. Two points arise from this phase which require that we take a look at the facts before us critically rather than allow ourselves be swept away in the flood of what at first may appear as ‘public opinion’, but now plays as a well-crafted plan to distract and derail the good people of this dear nation from the things which are true and right.
Dr (Mrs) Ngozi Okonjo-Iweala is a technocrat, not a politician. She was not appointed as finance minister and Coordinating Minister of the Economy because she was owed a political favour, but because the presidency deemed her the right fit for the job. Based on her past service to the country, it is not out of place for me to state that she is not one associated with reckless spending. In fact, it was during her first stint as finance minister that the Excess Crude Account was set up.
Secondly, while she endorsed saving; other parties, wielding political might, undermined her efforts. In April 2013, she openly, and on more than one occasion told us that the Federal Government was compelled to share over $16.4billion revenue accumulated in the excess crude account to the states because the governors argued that it was unconstitutional and even illegal for the Nigerian republic to have savings stashed away for some imaginary rainy day. She was also quoted saying that, “It was a fight to even get $1billion paid into the SWF (Sovereign Wealth Fund). We managed to save $20billion the last time, but now the governors are saying it is illegal. So, the country is not able to save, and what is left in the Excess Crude Revenue Account today is only about $3.6billion”.
The truth is, surviving the current decline in oil prices and its negative impact on national and global economies would have certainly been made easier had we enough funds shored up. Remember, it had been done before during the 2008/09 crises. The government was able to augment its budget deficit and continue with most of its development programmes with revenues from a healthy Excess Crude Revenue Account.
Had Dr Okonjo-Iweala not, in the past, expressed her concerns, reservations and angst about what another economic meltdown without sufficient funds in the ECA would do to us, then she should naturally be our first target for finger-pointing. But she did, several times over, she did. Yet we refuse to blame the people who squandered our future and have faced the one woman who became an enemy of state governors and legislature in her bid to secure the economic future of this country.
The Minister has always been an advocate of the need for the country to continue to create safety nets in the form of savings in order to cushion any potential negative effects of the volatility in the international oil market on the domestic economy should there be any further depression in the global economy. Just as she has repeatedly stressed that increased efforts to diversify the country’s economy remains the only viable option open to pursue in the face of dwindling revenues from crude oil exports as well as increasing volatility in the global oil market.
With elections fast approaching and our current situation becoming fertile ground for politicking, what is needed now is a collaborative paradigm shift. We need to look beyond the problem to the possible solutions; we need to shift our focus from blaming the finance minister and her economic team to focusing on the things that matter. In truth, as stakeholders, everyone has a role to play. Let us not be carried away by the opinions of naysayers as we look towards a better economy in the years ahead.
Issachar Odion is a post graduate student at the Obafemi Awolowo University.
