FORMER finance minister Dr Ngozi Okonjo-Iweala has attributed the nation's current set of financial difficulties to the poor management of the economy during the Goodluck Jonathan administration which failed to save for a rainy day when oil prices were high.
During most of the six years when Dr Jonathan was president, oil prices were in excess of $100 a barrel, rising to $140 a barrel at one stage. This year, they plummeted to below $40 a barrel and Nigeria has to cope with a significant drop in revenue as a result and according to Dr Okonjo-Iweala, the effects of the fall could have been cushioned with proper planning.
Speaking on inequality, growth and resilience, at the George Washington University, Dr Okonjo-Iweala said the World Bank and the International Monetary Fund (IMF) must seek means to embed savings into national constitutions devoid of political manipulations. She added that Dr Jonathan was not interested in saving Nigeria’s huge earnings from oil and other sources between 2011 and 2015.
According to Dr Okonjo-Iweala, the absence of political will to save under former President Jonathan is responsible for the hardship facing the country currently. She added that Nigeria was able to save $22bn under former President Olusegun Obasanjo, which saved the country from global economic meltdown in 2008.
Dr Okonjo-Iweala said: “We tried the Chilean saving example in Nigeria as we put in an oil price-based fiscal rule in 2004 and it worked very well. We saved $22bn because the political will to do it was there and when the 2008/2009 crisis came, we were able to draw on those savings precisely to issue about a 5% of gross domestic product fiscal stimulus to the economy and we never had to come to the bank or the fund.
“This time around and this is the key now, you need not only to have the instrument but you also need the political will. In my second time as a finance minister, from 2011 to 2015, we had the instrument, we had the means, we had done it before but zero political will."
According to Dr Okonjo-Iweala, Nigeria was not able to save when she should have. She added that this is why you find that Nigeria is now in the situation it is in along with so many other countries.
