Jonathan Did Not Squander $67bn Reserves – Okonjo-Iweala

The coordinating minister for the economy and minister of finance, Dr Ngozi Okonjo-Iweala, has debunked widespread media reports that the administration of President Goodluck Jonathan squandered the nation’s reserves, insisting that the reserves fluctuates in line with developments in the international market.

The minister, in a statement, yesterday, stated that the $67 billion cited in some recent commentary is factually incorrect as the reserves has not risen to the quoted figure in the present administration.

According to her, as at the end of May 2007, Nigeria’s gross reserves stood at $43.13 billion , comprising of the Central Bank of Nigeria (CBN)’s external reserves of $31.5 billion, $9.43 billion in the Excess Crude Account (ECA) and $2.18 billion in the federal government’s savings.

She said the statement was issued to clarify the facts of the recent history and status of Nigeria’s Excess Crude Account and foreign reserves as the issue is gaining more headline attention in this election season.

“Because of the importance of this key economic indicator, we believe it is important to restate the true position in the interest of the Nigerian public as well as local and international investors. First, it is absolutely not true that the administration of President Goodluck Jonathan has squandered the nation’s reserves. The facts are clear and indisputable.

“Second, it is a misconception to think that reserves are immutable or cast in stone. The reality is that since May 2007, the reserves have fluctuated in line with developments in the international oil market, rising from $43.13 billion at that time and peaking at $62 billion in September 2008 during the Yar’adua/Jonathan administration when oil prices reached a peak of $147 per barrel, and fell subsequently to a low of $31.7 billion in September 2011. This fall in reserves was largely a result of the vicissitudes of the global economy and oil market which caused the CBN to intervene, using some of the reserves, to defend the value of the naira,” Okonjo-Iweala said.

She further emphasised that the Excess Crude savings was largely used to cushion the economy at the height of the global financial crisis in 2008-2009.

“As a result, Nigeria was one of the few countries in the world that did not seek assistance from international financial institutions at that time. The fiscal stimulus used to shore up the economy during that period was shared by all the 3-tiers of government,” she added.

Similarly, she noted that savings in the ECA were also used to pay for fuel subsidies for the entire nation and that sharing continued after the crisis ended. She said that since 2012 such payments have been published each time they are made . The minister, however, agreed that savings in the ECA would have been higher but for the fact that a number of governors, against strong professional advice, actively kicked against continuous building up of the ECA and, indeed, pushed for its sharing.