These may not be the best of times for the ever bubbling and vivacious Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala.
Even when recent developments at local and international financial environments have little or no bearing with the managerial competences on the Minister as one of the foremost economic experts globally, the heat has been on her from all fronts as the nation’s economy continues to grapple with the rippling effects of fiscal shocks orchestrated by losses in the oil and gas sector.
Quite expectedly, the Minister had had to continue to tell those who care to listen through all communication channels, that despite scathing criticisms from political and public service critics, the nation’s economic fundamentals are stronger than ever.
Relying strongly on the available micro and macroeconomic indices at her disposal on the state of the economy, the amiable financial expert has assured that there was no cause for alarm in the face of the present funding constraints.
Defending the various policy measures of government targeted at positioning the economy on stronger productive pedestal and inclusivity of its growth trajectory, Okonjo-Iweala, was about 10 days ago compelled to respond to some concern raised by a section of state governors that the economy was gradually grinding to a halt.
The Amechi-led Governors had, based on their perceptions of the economy, had raised the alarm that the policies being fashioned to achieve sustainable growth of the economy were not achieving the desired results and therefore called for the resignation of the Minister if her capacity to minister ‘health’ to the ailing economy is no longer assured.
Specifically, the Governor Amechi-led Nigerian Governors’ Forum did not only allege breach of the provisions of the Appropriation Act, 2013 and non-compliance with the revenue projections federal budget by the Minister but also demanded the immediate disbandment of the National Economic Management Team (NEMT).
The Rivers State Governor, who read the communiqué of the NGF’s meeting said, “members expressed concern in the management of the economy by the Minister of Finance and Co-ordinating Minister of the Economy and called for a strict adherence to the Appropriation Act, 2013 failing which she should resign.
“Forum observed that the National Economic Council is constitutionally responsible for the management of the economy and should be used for that purpose as opposed to the Economic Management Team constituted by the Presidency.”
The Governors also urged the National Assembly to separate the Office of the Accountant- General of the Federation from that of the Accountant-General of the Federal Government for improved accountability and transparency in public finance management.
In what could be called a spontaneous weighty allegations of the policitically powerful group, which for recent political rumbles within the ruling political party, the Peoples Democratic Party of Nigeria, PDP, are enjoying some measure of public goodwill, Okonjo-Iweala said the insinuations about the health of the economy were mere political balderdash lacking factual substance.
Expectedly and in a tone of seasoned financial and economic manager of global repute, the Minister spoke on various efforts of the present administration to achieve holistic transformation of the economy and guarantee the sustainability of its growth in the years ahead.
Specifically, the Minister explained that despite some misgivings about the economy in some quarters, the performance indices, in terms of macroeconomic stability, increasing build up of critical infrastructure, Foreign Direct Investment, FDIs, inflows, job creation opportunities, foreign reserves profile and growing investors’ confidence in the economy suggested clearly that Nigeria is on the path of sustainable growth.
She also on the various achievements of the current economic reform agenda, particularly in terms of the jobs created, infrastructure development in rail, road, air and waterways, foreign reserves level, successful privatisation of PHCN successor companies, increasing private investment inflows inflation rate and capacity of the country to meet payment obligations when due and other areas, said she was confident that the economy is sound.
According to her, in addition to ensuring that the economy is prudently managed through a combination of fiscal and monetary measures, indications showed that more and more investors were investing in the economy even as the State Governments are also exploring the bond market to raise funds for their long-term infrastructure needs. Okonjo-Iweala said: “It is very clear that there is a growing investor confidence in the economy and this happens only in prudently managed economy. You only float bonds in a stable, prudently managed economy.
Many of the states are doing this. “Already, we have nine of them that have done this and many more are coming. As we speak now, two new applications are also coming in. So, the environment is supportive of investment and I can say that more and more investors are doing business here” On the performance of the 2013 capital budget, the Minister said in addition to paying salaries regularly and paying government’s bills when due, a total of N850 billion had been released this year on capital budget of which substantial portion had been cash-backed.
For instance, she disclosed that out of the N600 billion released in the first and second quarters this year, the MDAs had achieved 76 per cent utilisation just as out of the N250 billion for the current quarter, N210 billion had been released to cashback the capital budget.
Okonjo-Iweala said it was in demonstration of government’s concern about the negative implications of sustained drop in oil production as well as oil theft for budget efficiency, that the President constituted the Governor Uduaghan-led Committee to help in mitigating the impact of the problems on the economy.
On the type of budget Nigerians should be looking forward to in 2014, the Minister said plans would be put in place to ensure that Nigeria gets a more prudent budget given the emerging developments in the oil sector at both domestic and international economic environments and the need for caution in setting budget benchmark and provisioning for expenditures.
She, however, assured that despite the worrisome developments, government would still be more committed to focusing more on critical sectors of the economy, particularly the real sector and massive build up of infrastructure given their multiplier effect potentials for the economy.
As if that was not enough for the Minister, some heads of the MDAs during the week also condemned the approach being used to release capital budgets, alleging that substantial part of their 2013 capital budgets remained not cash-backed, causing the National Assembly members to also demand explanations by the minister. For instance, members of House of Representatives Committee on Finance, who visited the Office of the Accountant General of the Federation (OAGF) on Tuesday in furtherance of as their oversight functions in the MDAs, expressed displeasure at what the Ministry of Finance and the Budget Office used as budget performance template.
The legislators accused the Ministry of Finance and the Budget Office of the Federation for basing budget performance on the amount that had been released rather than on what had been budgeted. According to the legislators, the current template for budget performance should be jettisoned and performance should not be based on releases but on budgeted figures.
To justify their stance, the Chairman of the Committee, Hon. Abdulmumin Jibrin, pointed out that incomplete release of funds to the Ministries Departments and Agencies (MDAs), especially the OAGF will lead to non- performance, Poor release of funds will lead to poor performance Using the presentation made by the Accountant General of the Federation, Mr Jonah Otunla, to the members of the committee as basis of their assessment, the legislators were worried that between January and August this year out of the N3.3 billion budgeted as personnel cost for the OAGF only N2.03 billion had so far been released and utilized.
For the first, 2nd and 3rd quarter capital releases for the OAGF, N43,000,000.00 was budgeted for the purchase of a “power generating set” but as at yesterday, only N20,546,228.52 had been released and out of the sum, only N18,100,203.90 had been expended on the purchase, with a performance rating of 88 per cent.
According to the lawmakers, rather than use the amount released to measure budget performance, the legislators said they preferred the use of the budgeted figures in order to reflect a true picture of how a budget is performing.
In a related development, the Committee had also during the cause of week listened to the Standard Organisation of Nigeria’s, SON’s, lamentations over low capital budget releases, attributing it to the poor performance recorded during the year under review.
The question analysts are wont to ask is: Could the MDAs’ complaints about low cash-backed budgeting be primarily been based on desire to deliver, particularly when analysed within the context of the minister’s claim that capital budget had achieved 76 per cent utilisation as at the end of the 3rd quarter? Or are the complaints orchestrated by efforts to Minister to curb leakages in public finance, through the ‘Envelope policy, a fiscal step that has not gone down well with many MDAs’ top officials in recent months?From the Civil Service: Okonjo-Iweala: Assailed by political intrigues, bureaucratic conspiracy by ngcareers