The minister has rejected the suggestion that the economy was under-performing; on the contrary, the economy was strong despite revenue shortfalls, she said.
Mrs Okonjo-Iweala did admit however that the global market price of crude was not at issue; instead, she added, the level of crude production in the country was below budget projection.
Federal government revenues derive substantially from the sale of crude oil. In recent years, such revenues have been sliding. The problem is aggravated by massive oil theft by a complex network of criminals, government officials who profit from it and security agencies who, more often than not, look the other way. The maze of corruption in the industry may be befuddling, but a determined government can put a stop to it. Because of the absence of a proper audit, the public is in the dark about how much crude the country produces daily.
The problems that beset the oil industry, and which affect the national budget, became more pronounced after President Goodluck Jonathan bypassed statutory security agencies to award a multi-billion dollar contract to a firm run by ex-militants and oil bunkers to guard pipelines and oil assets that had hitherto been their main targets of sabotage and profit. Despite the huge sums paid out to the firm, oil theft has escalated on an even larger scale, with revenues from such illegal activity almost half of the nation’s annual budget. The failure of that contract to stem the flow of stolen crude is therefore undeniable. In the past couple of months, the regular sharing ritual among the tiers of government appears to have been affected by the crisis of dwindling revenue that accrues to the federation account. A statement by the Minister of State for Finance that henceforth revenue sharing would henceforth be made on actual collection, not budget, seemed to have stirred the hornet’s nest, hence the governors’ complaint. It stands to reason that states, in accordance with existing stipulations, should not be made to suffer as result of the inefficiency of the federal. As the governors pointed out at the end of a recent meeting, non-compliance with the revenue projections of the federal government for the 2013 budget breeched provisions of the Appropriation Act. As the coordinating minister for the economy, the Minister of Finance cannot be completely absolved of blame for the current crisis. Her haughty retort that she worked for President Jonathan and was answerable only to him may be correct, but is impolitic and insensitive for someone in the high public office she now occupies. That being said, calling on her to step down does not t arise because, as the governors must be aware, the buck, as they say, stops at the president’s table. She also cannot be asked to take responsibility for the current economic crises, which stem chiefly from the inability of the federal government to meet its revenue targets. That is so because it has not put its foot down to end oil theft and deal with its own officials that encourage those who engage in it
The governors however made some observations concerning the need to separate the office of Accountant General of the Federation (AGF) from that of Accountant General of the Federal Government for accountability and better management of the economy. They also pointed out that the National Economic Council (NEC) is the legally recognised agency to manage the economy, not some economic management team that has no parliamentary mandate. These are matters that the National Assembly should look into and act upon appropriately.