The controversy over the alleged depletion of the nation’s foreign reserves and Excess Crude Account (ECA) offers Nigerian leaders and the citizens a lesson beyond who is right or wrong: It is an urgent call for more transparency in the management of the nation’s finances.
The controversy began when former President Olusegun Obasanjo and some other Nigerians alleged that the foreign reserves which the late President Umaru Yar’Adua grew up to as much as over $60 billion had been reduced to $34.5 billion while the ECA had plummeted from $9.43 billion to $3.1 billion.
But in its defence articulated by the Minister of Finance, Ngozi Okonjo-Iweala, the Federal Government said that the two accounts were not squandered. Noting that the depletion of the accounts was a reflection of existing economic realities, the government said that at the end of May 2007, Nigeria’s reserves stood at $43.13 billion, comprising the CBN’s external reserves of $31.5 billion, $9.43billion in the ECA and $2.18billion in Federal Government’s savings. The government insisted that these figures contradicted the $67 billion that was alleged to have been lost.
According to the government, reserves are not immutable, thus since May 2007, they have fluctuated in line with developments in the international oil market. The essence of this trajectory of the defence is that the fall in reserves was largely due to the instability in the global economy and the oil economy which caused the Central Bank of Nigeria (CBN) to intervene by using some of the reserves to defend the value of the naira.
The government further stated that the Excess Crude savings which are a component of the reserves was largely used to cushion the economy at the height of the global financial crisis between 2008 and 2009. Based on these explanations, the government insisted that the nation’s reserves were not squandered but were used appropriately in the course of normal transactions required for the development of the economy.
Yet, the allegation of depletion was well-founded to the extent that there is now a negative difference in figures between what they were some years ago and what they are now. As the government admitted, part of the money was used for developmental purposes. So, what the government was largely concerned with was to erase the impression that the money was squandered.
Obviously, this controversy would not have arisen if there had been a culture of transparency in governance. The management of the nation’s finances over the years has remained largely opaque, thereby preventing the citizens from being aware of how they are governed, and nurturing an environment for the proliferation of real or perceived reasons for suspicion. In essence, there is the need for the government to create an atmosphere of transparency in governance that would not give room for speculations.
Although the government said that the figures of the external reserves and ECA could independently be verified from the records of the CBN, it ought to have done more than this. There should be a more transparent system of making records of the nation’s financial status available. The transparency of such a system would allow Nigerians at home or overseas to access the records. If all the citizens are stakeholders in the Nigerian project, the government of the day owes them a duty of informing them of the nation’s financial position. Such information should be given regularly to Nigerians with the comparable simplicity of a bank issuing a customer the statement of his/her account monthly.
If the figures were transparently available, a former president would probably not have wondered what the money was used for. In this regard, the government should create an atmosphere of openness around the nation’s finances by publishing the exact figures regularly. These measures would obviate the necessity of defending the allegations of misappropriation and save time for the pursuit of developmental programmes.
What is required now, more than official defence of the depletion of national savings, is for the country’s economic managers to think of ways to boost revenues. Although the government in its defence threw a challenge to the states as having a part to play in increasing the savings, it should set the pace in this regard. And the state governments whose fixation on the present has paved the way for the depletion of the ECA should be far-sighted enough to appreciate the imperative of delayed gratification and planning for the future. They should desist from the selfish consideration that since they generate the revenues now, they must consume them and leave empty coffers for their successors. Government is a continuum, therefore the culture of saving for the future and transparency in the management of finances should be entrenched now at all levels. Doing all this would certainly place government in the right position to tell Nigerians their nation’s worth without any fear of contradiction.
