The House of Representatives Committee on Finance, yesterday, summoned the Minister of Finance, Dr. Ngozi Okonjo-Iweala for further clarifications on her answers to the 50 questions the committee sent to her on December 19, last year.
The letter of invitation dated January 31 and signed by the Chairman of the committee, Dr. Abdulmunin Jibrin, entitled, ‘Observations, Request for Additional Information and Invitation to Investigative Hearing,’ however, demanded further clarifications on 40 answers to the earlier questions.
The committee asked the Minister to appear before it on February 20 after when she must have provided more information on the 40 questions she had earlier answered.
The letter read in part: “your response to the 50 questions we raised to ascertain the true state of our economy dated January 15, 2014 was received and carefully analysed by the Committee.
”Having gone through your responses, the Committee noted that some questions were either not answered, partially answered, out rightly ignored or completely misunderstood.
”The Committee noted glaring missing gaps in the responses, absence of supporting proofs to assertions and lack of relevant documents to back up the presentation as is the practice in any legislative oversight or investigation.”
It was stressed in the letter that “many data and statistics provided were inconsistent with subsequent information provided while answering other questions.
“Also noted were the wide ranging comparison you made with other advanced and developing countries while responding to some questions but failed to apply the same in some cases that obviously require such approach.’’
It was further explained in the letter that “ in some instances, you abruptly referred the Committee to relevant agencies for clarification.
”The Committee is surprised that because of its conviction that if all the questions raised are beyond the competence of the Minister of Finance, it is certainly not beyond the competence of the Coordinating Minister for the Economy to the extent of information you must have in your possession unless you say otherwise.
”In view of the above and ahead of the investigative hearing on the state of the economy, the Committee is obliged to forward to you additional observations and requests to be submitted to the Committee not later than February 20, 2014.”
The 50 questions asked Dr. Okonjo- Iweala then generated a lot of controversies even as the Minister of Finance promptly replied them and was commended for responding to the questions promptly.
Here are some of the original questions:
1. What should you consider as the major economic achievements of this government in the 2013 fiscal year and why?
2. You have been credited with many announcements regarding Nigeria’s economy as one of the fastest growing economies in Africa. If the economy is one of the fast growing economies, what is exactly growing the economy? What role does government play in the said economic growth, especially given that as high as 80 per cent of the country’s total annual budget spending still goes into recurrent expenditure?
3. Since your arrival as minister of finance in 2011, you have publicly announced the need to reduce the recurrent expenditure so that more money would be made available to capital spending which is critical to growing and diversifying the country’s economy. How far has government succeeded in making these necessary cuts; and where exactly have these cuts been made in this effort to reduce recurrent expenditure?
4. You are known to be celebrating a single-digit GDP growth.
But speaking recently at a breakfast dialogue with some members of the organised private sector in Lagos, organised by the Nigerian Economic Summit Group, NESG, you were quoted as saying: “We are growing, but not creating enough jobs. That is a very big challenge…We need to grow faster. I think it needs to grow at least nine to 10 per cent to drive job growth the way we want.” Don’t you agree that a good finance minister managing an economy like ours should be celebrating a GDP growth as high as 20 per cent annually? Why is it that our economy cannot grow beyond a single digit? How many jobs are being created as a result of these said growths? In which sectors of the economy are these jobs created? If in private sector, what contributions is government making to further assist these private sector firms?
5. In the presence of Nigeria’s huge infrastructure deficit, why is it that the country’s debt-to-GDP at about 19 per cent in 2012 remains one of the lowest in the world when compared to nations already with world-class infrastructure and industrial economies such as America’s 105 per cent, Brazil’s 65.49 per cent, India’s 67.60 per cent, and South Africa’s 40.9 per cent?
6. Since facts don’t lie, have you any disagreements with the September 4, 2013 Global Competitiveness Report of the World Economic Forum for 2013-2014, which ranked Nigeria 120th out of 148 countries ranked in the Global Competitiveness Index, including being ranked far behind some African countries such as Mauritius 45th, South Africa 53rd, and Kenya 96th?
7. “For the first time in Nigeria’s 53rd year history, we have successfully privatised the electric power industry,” so said the President at a recent meeting in London with some foreign investors. As minister of finance should you agree that the recent privatisation of the country’s power infrastructure is worth celebrating as a major economic achievement in 2013, when in reality there is little or nothing to show as an improvement in the country power supply? Also why our rush to wholesale privatisation of the power sector when countries like South Africa, generating as high as 42,000MW still have their power sector mostly in public hands?
8. What was your reaction to the November 12, 2013 statement credited to the World Bank Country Director for Nigeria, Marie-Francoise Marie-Nelly, who said that over 100 million Nigerians are today living in absolute destitution, representing an unheard-of 8.33 per cent of the world’s total number of people living in destitution?
9. Nigerians are increasingly perplexed that these days nothing happens without government borrowing. And for most Nigerians, it is frightening how those managing the economy are just dragging us into excessively unproductive debts. More worrisome is the fact that every effort is being made to hide the details of the country’s debt stock from Nigerians. Where are the facts that the country’s current high rate of borrowing is productive, let alone have the ability to be repaid without having to resort to more borrowings?
10. Is prudence in our borrowing simply reduction in borrowing or simply constructive borrowing with government putting necessary measures in place to ensure that domestic debt profile is properly supervised and utilised by curbing corruption?
11. From Debt Management Office (DMO) 2012 Annual Report, the total public debt outstanding between 2008 and 2012 for external stock rose from $3.72bn to $6.53bn, while domestic stock rose from $17.68bn to $41.97bn. The total debt service the same period saw the percentage of external debt service drastically reduced from 11.46 per cent to 5.96 per cent while the percentage of domestic debt servicing grew from 88.54 per cent in 2008 to 94.04 per cent in 2012, drastically increasing the cost of the total debt service since the cost of domestic borrowing is atrociously higher than the cost of external borrowing. How could your debt sustainability analysis rationalise this without seeing some narrow interests being the overriding reason? Could this be the explanation why commercial banks in the country are declaring unheard-of three digit profits and the high Foreign Portfolio Investment and low Foreign Direct Investment?
12. It’s an established fact that the willingness and ability to borrow do not automatically translate into economic growth. If you agree with this fact, how productive are the country’s recent borrowings?
13. Why should our internal debts continue to represent more than two-thirds of Nigeria’s external debt profile, when the cost of servicing domestic debts is ridiculously far more expensive than servicing external debts? Why should government continue to borrow internally when in so doing results in insufficient funds, skyrockets the cost of borrowing and above all, crowds out the real sector from the money market? Shouldn’t the high cost of domestic borrowing override whatever are the assumed benefits? Since both London Interbank Offer Rates (LIBOR) and the US Treasury Bonds rates offer far better interest rates for sovereign borrowings, why have we continued not to take advantage of cheaper interest rates?