President Muhammadu Buhari’s Senior Special Assistant on Media and Publicity, Mr. Garba Shehu, in a recent statement in Abuja, said that Buhari’s administration inherited an already ravaged economy due to years of mismanagement and corruption from Ex-President Goodluck Jonathan.
Shehu’s statement was in response to the statement made by Ex-President Jonathan and Senator Ahmed Makarfi, the Chairman of the Peoples Democratic Party (PDP) National Caretaker Committee.
According to the PDP chieftains, “under the previous administration, there was money but now things are very hard.”
Shehu in his response said that;
“It is understandable that Dr Jonathan kept his comments short, because a cursory look at any sector clearly indicated that he and his government presided over the most monumental and tragic economic mismanagement recorded in our national history.
“The oil sector boomed under his tenure, with oil prices as high as 120 dollars and peace in the Nigeria Delta. Nigeria earned unprecedented dollar revenues. Sadly, that is where the story turns sour.
“There is nothing to show for the revenues earned; no major capital project was completed, neither power generation, road development, rail nor agriculture benefited from the windfall earnings.
“Rather, the administration presided over the diversion of oil revenues on such a massive scale that even without the protection now accorded to Whistle blowers, the then Central Bank Governor blew not only a whistle but a trumpet.
“He was hurriedly shown the door.”
“Indeed, the President once celebrated having the largest number of private jets, whilst our youth languished without jobs, our fields stood idle and our factories began the layoff of workers.
“Government simply reticulated oil revenue through personal spending by corrupt leaders, wasteful expenses and salaries.
“This was done rather than investing in what would grow the economy. Economies grow due to capital investment in assets like seaports, airports, power plants, railways, roads and housing.”
According to Shehu, the PDP-led government for over 10 years could not record a single major infrastructural project, “in short the money was mismanaged”, he stated.
“Such was the looting that even the goose that was laying the golden egg was being systematically starved.
“The direct contractual costs of oil produced in the form of cash calls, remained unpaid.”
He however noted that President Muhammadu Buhari’s administration was faced with the task of fixing the serious inherited economic challenges from the oil majors, which according to him included six (6) billion dollars owed by Nigeria for oil that had already been sold or stolen.
He added that the PDP solution to the challenges was to “raid the Ecological Fund and selectively grant two billion dollars each to the PDP states.’’ Adding that it was just the aggressive borrowing by the Ministry of Finance under the leadership of Dr. Mrs. Ngozi Okonjo-Iweala that prevented the then Jonathan’s administration from owing salaries.
“The economic wisdom of borrowing to pay recurrent bills is a questionable one, particularly as those paid would have included over 45,000 that have subsequently been removed by the Buhari led administration as ghost workers.
“It also included the lavish costs of chartering private jets, first class travel and other wasteful acts that have been eliminated under this administration.
“To compound the problem, the government was borrowing heavily and owed contractors and international oil companies.’’
He noted that Buhari came into power and inherited an accumulated debt.
Shehu added that all these factors were building up to “Nigeria heading for a major crisis if the price of oil fell. Nigeria did not have fiscal buffers to withstand an oil shock.
“The oil shock should and could have been foreseen. When Islamic State of Iraq and Syria, ISIS crisis started, it was clear that the United States of America wanted to cut off funds to terror groups by crashing the price of oil.
“When America granted permission for exploration of oil on land (Shale), the warning signs were evident, but these were ignored by Nigeria’s economic managers.
“In summary Nigeria earned a lot of money when oil prices were high but there is nothing to show for it. Now oil prices have fallen; we are suffering”.
He said that the Buhari’s administration was already fixing the issues like, increasing spending on capital projects, blocking leakages that allowed its revenues to be siphoned by greed individuals, creating jobs and generating revenue from agriculture, solid minerals and manufacturing.
Shehu said that if these things had been done already when the price of oil was as high as $120 per barrel, Nigeria wouldn’t have been in this bad situation.
“We would not be suffering now if we had no cash reserves but we had power, or a rail system, or good roads, or good housing. But we don’t have money and we don’t have the projects either.
“Now that the oil has fallen below those levels, it is very difficult to do what is needed but they must be done to save Nigeria. There is no other way if we want to be honest.
“If PDP were still in power, they would have continued deceiving people, by borrowing to fund, stealing and wastage and the problem would have simply been postponed for future generations to face.’’
Regarding Jonathan’s statement on the astronomical increase in dollar rate now compared to when he was president, Shehu said that;
“With such a line of argument, it is clear why we are where we are.
“With oil prices as high as $120, the average inflow of dollars each month was high, making it easy to support cheap dollars.
“However, with oil price plummeting as low as 28 dollars, the fundamental laws of supply and demand dictated that the currency would need to adjust, since oil was the sole export.
“It is instructive to note that virtually every major oil exporter has witnessed currency adjustments with the fall in oil price.
“The Buhari administration has taken a long term strategic view of supporting a stable naira on both the supply and demand sides.’’