N30tn Has Been Stolen Under Okonjo Iweala's Watch

Renowned economist and a former Governor of the Central Bank of Nigeria, Prof. Chukwuma Soludo, on Sunday alleged that over N30tn had been stolen under the watch of the Minister of Finance, Dr. Ngozi Okonjo-Iweala.

Soludo, in a 10-page response to Okonjo-Iweala’s rebuttal of his earlier criticism of the management of the Nigerian economy under the administration of President Goodluck Jonathan, said the nation was in for a very turbulent time this year because the economy had been grossly mismanaged.

The Federal Government had last Wednesday described the five-year tenure of Soludo as the governor of the CBN between 2004 and 2009 as a disaster to the banking sector.

The comment came on the heels of an earlier article by Soludo last Monday in which he claimed that the Nigerian economy under Jonathan had performed woefully.

Okonjo-Iweala had in a statement on Wednesday described Soludo’s as an “embittered loser in the Nigerian political space.”

But Soludo, in his new article, which was made available on Sunday, said if the prices of crude oil in the international market failed to rebound, Nigeria would face an unprecedented level of economic crisis with horrible attendant hardships for the citizenry.

“Our public finance is haemorrhaging to the point that estimated over N30tn is missing, or stolen, or unaccounted for, or simply mismanaged,” the former CBN governor stressed.

In the piece entitled, ‘Ngozi Okonjo-Iweala and the missing trillions’, Soludo said the sharp decline in the naira-dollar exchange rate from 158 a few months ago to 215 currently showed that trouble was already at the doorstep.

He added that “unless oil price recovers, this is just the beginning,” adding, “For the sake of Nigeria, I won’t keep quiet anymore!”

The former CBN boss said his earlier article was written out of concern that the 2015 election campaigns were being conducted in a manner that did not show that the economy was in a crisis.

“Part of my frustration is that five years after, everything I warned about has come to happen and we are conducting our campaigns as if we are not in a crisis. As a concerned Nigerian, I have a duty to speak out again,” he said.

Soludo, who gave the details of the N30tn allegedly stolen under Okonjo-Iweala’s watch, said, “Under you as the Minister of Finance and coordinator of the economy, the basket of our national treasury is leaking profusely from all sides. Just a few illustrations! First, you admit that ‘oil theft’ has reduced oil output from the average 2.3 – 2.4 million barrels per day to 1.95 mpd (meaning that at least 350,000 to 450,000 barrels per day are being ‘stolen’). On the average of 400,000 per day and the oil prices over the past four years, it comes to about $60bn ‘stolen’ in just four years.

“In today’s exchange rate, that is about N12.6tn. This is at a time of cessation of crisis in the Niger Delta and the amnesty programme. Can you tell Nigerians how much the amnesty programme costs, and also the annual cost for ‘protecting’ the pipelines and security of oil wells? And the ‘thieves’ are spirits?

“Second, my earlier article stated that the minimum forex reserves should have been at least $90bn by now and you did not challenge it. Rather, it is about $30bn, meaning that gross mismanagement has denied the country some $60bn or another N12.6tn. Now, add the ‘missing’ $20bn from the NNPC. You promised a forensic audit report ‘soon’, and more than a year later, the report itself is still ‘missing’. This is over N4tn, and we don’t know how much more has ‘missed’ since Sanusi cried out.

“How many trillions of naira were paid for oil subsidy (unappropriated?). How many trillions (in actual fact) have been ‘lost’ through customs duty waivers over the last four years? As coordinator of the economy, can you tell Nigerians why the price of Automotive Gas Oil, popularly called diesel, has still not come down despite the crash in global crude oil prices, and how much is being appropriated by friends in the process?

“Be honest: Do you really know (as coordinator and minister of finance) how many trillions of naira self- financing government agencies earn and spend? I have a long list but let me wait for now. I do not want to talk about other ‘black pots’ that impinge on national security.”

Soludo added, “My estimate, Madam, is that probably more than N30tn has either been stolen, or lost, or unaccounted for, or simply mismanaged under your watchful eyes in the past four years. Since you claimed to be in charge, Nigerians are right to ask you to account. Think about what this amount could mean for the 112 million poor Nigerians, or for our schools, hospitals, roads, etc.

“Soon, you will start asking the citizens to pay this or that tax, while some faceless ‘thieves’ are pocketing over $40m per day from oil alone.”

The former CBN governor also maintained that the banking sector consolidation exercise that he supervised was a huge success contrary to Okonjo-Iweala’s assertion that it failed woefully.

He described it as both “a revolution and a war, and most people thought it was impossible, but thank God we succeeded. “

Soludo said, “For the first time in Nigeria’s history, a policy of that magnitude was announced and the deadline kept with precision. We were courageous to revoke the licences of 14 banks, including those of my friends, in one day. The FT-Banker concluded that the scale, precision and cost of the transformation were unprecedented in the world. Before then, Malaysia had the least cost of banking consolidation at five per cent of the Malaysian GDP.

“It did not cost Nigerian taxpayers one penny. Twenty-five new and stronger banks emerged, but the powerful idea behind the consolidation ignited something even more powerful – the race to the top. Banks raised more capital, and even banks like First Bank, Zenith, GTB, etc. that did not merge with others went on capital raising several times. The consequence was higher levels of capitalisation and within two years, 14 Nigerian banks were in the top 1,000 banks in the world and two in the top 300 (no Nigerian bank was in the top 1,000 before I came).

“Even after I left office, still nine banks were in the top 1,000. Our vision was to have a Nigerian bank in the top 100 banks within 10 years. As I see the new Access Bank, Zenith, GTB, Fidelity, Diamond, UBA, FBN, FCMB, Skye, Stanbic IBTC, Union, Ecobank, etc., I cannot but feel that we have taken giant steps forward.

“Deposits and credit soared (from barely N1.2tn to over N7tn); new technologies (ATM and e-banking) boomed, and banks had 57,000 new jobs; mega businesses emerged (ask any major operator in the Nigerian economy their experience with banking and credit before and after Soludo; – the Dangotes, Arik, MM2, oil and gas operators etc.); capital market boomed and dominated by the banking sector.

“It was a new dawn for the Nigerian private sector. I have heard Dangote twice say that he would not be near as big as he is today without the banking consolidation. Many other stakeholders still say it today. FDI and portfolio inflows flooded into Nigeria. The world celebrated, and one single transformative idea has changed the face of the private sector and the economy forever. Banks became Nigeria’s first transnational corporations, with about 37 branches outside of Nigeria.”

He also said he would write about the Assets Management Corporation of Nigeria later as a separate topic