Immediate past Minister of Finance, Dr. Ngozi Okonjo-Iweala, has explained why Nigeria was not able to muster enough oil savings in the good times during former President Goodluck administration to buoy Nigeria up in lean times as being experienced now.
For her, the country’s present economic downturn is a result of lack of political under Jonathan presidency to save for the rainy day.
Okonjo-Iweala, who spoke at the George Washington University, Washington D.C. Okonjo-Iweala on Thursday said that the Goodluck Jonathan administration differed seriously from the Olusegun Obasanjo administration under whose administration the Nigeria government saved $22 billion.
Okonjo-Iweala, who first served as finance minister under Obasanjo (2003 -2006) and later recalled by Jonathan for the same job (2011-2015) said the saving helped to cushion the dryness that came the way of the country at the end of the last decade.
Okonjo-Iweala served as finance minister under President Obasanjo between 2003 and 2006 and again under President Jonathan between 2011 and 2015. The former finance minister and World Bank president, who spoke on “inequality, growth and resilience,” with Chile as an example of a country with a saving culture, was quoted by The Cable, an online news medium, to have said: “We tried it in Nigeria, we put in an oil price based fiscal rule in 2004 and it worked very well. We saved $22 billion 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 five per cent of GDP 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. “So we were not able to save when we should have. That is why you find that Nigeria is now in the situation it is in. Along with so many other countries. That is the question that I ask, what do we need to do to these countries to save over a period of long accelerated growth.
“We need to devise mechanisms not just that are good technically but find a way to either embed them in the constitution or find a way to separate them from the political manipulation so that these countries can survive over time. “To build resilience, African countries need tools, mechanisms and it is doable and we need to interrogate ourselves why we have not done it.” The Cable further quoted her as saying that manufacturing was also critical to growth in Nigeria and the rest of Africa as she was reported to have said that manufacturing represented just 11 per cent of GDP in Africa.
“I do not believe that we can be resilient, except if we can encourage manufacturing even on the goods we consume, services, entertainment industry, agriculture. I think these are the kinds of questions that policy makers struggle with on a daily basis and that is what we are going to answer to get resilience. If we don’t get these mechanisms, we politicise them, find ways to transform the base of the economy and create jobs including in manufacturing, I believe we are going to go into this looming deceleration that is being talked about.”
