Zero Will To Save Under Jonathan Caused Present Challenges – Okonjo-iweala


BEVERLY HILLS, April 15, (THEWILL) – The immediate past Minister of Finance, Dr. Ngozi Okonjo-Iweala has declared that the lack of political will to save part of the monies raked in from crude oil sales under former President Goodluck Jonathan was responsible for the challenges presently facing the country.

Speaking at George Washington University, on “inequality, growth and resilience,” the two-time Finance minister was quoted by TheCable as disclosing that Nigeria was able to save $22bn under former President Olusegun Obasanjo, which rescued the country during the 2008 global economic meltdown.

She however requested the World Bank and the International Monetary Fund, IMF, to seek means to embed savings in national constitutions devoid of political manipulations.

Citing the Chilean saving model, Okonjo-Iweala said: “We tried it in Nigeria, we put in an oil price based fiscal rule in 2004 and it worked very well.”

She further explained that “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 on those savings precisely to issue about a 5 percent of GDP fiscal stimulus to the economy and we never had to come to the bank or the fund.

“This time round, 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.”

She said as a result, the World Bank and the International Monetary Fund must seek means to embed savings in national constitutions devoid of political manipulations.

On solving the problem of political will and manipulations, she said, “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 and mechanisms, and it is doable and we need to interrogate ourselves why we have not done it.”

The ex-coordinating minister for the economy further disclosed that manufacturing was also critical to growth in Nigeria and the rest of Africa, stressing that manufacturing represented just 11 per cent of GDP in Africa.

According to her, “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.”