Jonathan and the $31bn Question By Nasir Ahmad El-Rufai
Published:30 Nov, 2012
Jonathan and the $31bn Question
By Nasir Ahmad El-Rufai
When I wrote an article in 2011, stating that the government of President Goodluck Jonathan was spending two billion naira every day, including weekends, on security without commensurate returns on the lives of Nigerians, the president’s reaction was to have his then chief goon, General Awoye Azazi, arrest and detain me for publishing ‘misleading information’. In retrospect, I agree with the accusation – because the amount I stated hugely understated the grand larceny going on in government.
An opening into what is really going on in government was provided a few days back by the Punch newspaper, which found that a staggering 5 trillion naira – or $31bn has been stolen under Jonathan’s 30-month stewardship of our nation’s affairs.
Assuming that Jonathan has been in power since May 2010, that works out to an incredulous $1bn stolen each month. If you add the average borrowing of another $1bn per month since Jonathan took office, then the true scale of the epic theft becomes clearer.
President Jonathan is making a mockery of himself if he continues to insist his government is determined to fight corruption, or that Nigeria under his watch has not finally lost the war on graft. It is no accident that Nigeria is perceived as the second most corrupt country in the world by a recent Gallup poll. According to International audit firm KPMG, the cost of fraud in the first half of 2012 alone is $1.5bn (N225bn), the highest on the African continent. And that is only because they have no real idea of what is going on in government circles While Nigeria is ranked third behind USA and China in backlogs of orders for personal private jets, the Economic Intelligence Unit (EIU) asserted that our nation is the worst place to be in 2013 due to deteriorating indicators of human security..
One day, we read that billions of naira of pension funds have been stolen, and the next, it becomes trillions of unbudgeted fuel subsidy monies. It seems Nigerians have simply gotten numb to these figures, or have not appreciated the opportunity cost of the sums being stolen in terms of goods and services forgone. To put things in context, if one spends one hundred thousand naira daily, it will take about 53 years to spend one billion naira! A billion dollars is of course some 150 billion naira, so go ahead and do the math.
In short, what would $31bn do for Nigeria or Nigerians? For a person who lives for 100 years, he would have to spend the sum of $310m dollars a year for an entire century – near a million dollars a day, weekends included to finish it all. And if he decides to join the league of private jet owners, that amount would purchase 1,550 planes at an average cost of $20m each.
If the funds were to be used to finance the operations of the Nigerian government, the $31bn sum effectively covers Nigeria’s N4.8trn 2012 budget with a leftover of about N200bn. And is only less than N1 billion short of the proposed N4.92trn budget for 2013. From another perspective, according to an MoU signed by government this year, 6 refineries would be constructed in modular forms within 30 months at a cost of $4.5bn. Each refinery would process 30,000 barrels of crude per day with an output of 5 million litres of gasoline. This means that with $31bn about 41 new refineries can be built.
The immediate implications of that are: the very volatile fuel scarcity situation existing all over Nigeria would be solved. And hundreds of billions of naira that are ordinarily stolen annually in the guise of fuel importation would be saved. Similarly, of the 41 refineries, one would be sited in every Nigerian state, with an extra five clustered or evenly distributed around larger consumption centres like Lagos, Ibadan, Kano and Abuja. There is simply no telling how many jobs this would create for Nigeria’s tens of millions of unemployed citizens.
And speaking of employment, some of the decisions by this government are simply confounding because the MoU for the refineries indicated that 6 months of construction work will be done in America, followed by one month of test-running and dismantling of the refinery. Another month is provided for transporting the dismantled refinery, and an extra 4 months to reassemble the plant and commence production. Not one Nigerian job will be created in the construction of the refineries for which $4.5bn was to be spent! And like everything with this hapless administration, nothing has been heard of the construction of these modular refineries, only a report of yet another committee on refineries.
The design and construction of rail services in Abuja which the Obasanjo administration awarded in 2007 and due to have been completed in 2010 was recently “re-approved” by the Federal Executive Council for about the same it was originally awarded – some $823m, less than a billion dollars. The vanished $31bn would have conveniently provided a project similar to the Abuja light rail system for 32 of our 36 states. Imagine the jobs we would have created, the savings on road repairs, reduction in accidents, cost of transportation and improvement in the standards of living we would have had.
Similarly, what became the Primus Specialist Hospital in Abuja, was awarded for less than N5 billion by the FCT Administration, and reportedly finally completed at multiples of the original price. Assuming it would cost N100 billion to build and equip such a facility, it would mean that if the looted $31bn was channelled into healthcare, it would have comfortably built about 31 hospitals of that calibre. And if it had not been inflated, the same amount might have built a world class hospital in every state capital with the best equipment anywhere. Incidentally, the First Lady would not have had to go to any German hospital for any reason. Nigeria would also have saved the N450 billion we lose annually, travelling overseas for medical treatment.
In the last two fiscal years, less than N20 billion have been budgeted annually for the capital needs of all federal universities. Between 2004 and 2007, the FCT administration and the Petroleum Technology Development Fund contributed about 200 hectares of land plus $10 million, and $25 million respectively as virtually sole contribution to the set-up of the African University of Science and Technology (AUST), Abuja. With the stolen funds, the federal government would have financed the capital programmes of all federal universities for some 250 years! And if the same funds were applied to building new universities, we could easily have got at least 60 AUST- like institutions up and running all across the country.
From every perspective one looks at it, the amount of stolen funds would have improved the lives of Nigerians: if the $31bn had been invested in road construction, Nigeria would have emerged with one of the best road networks in all of Africa; even at the reported N89.53bn at which the Lagos Ibadan expressway was ‘concessioned’ in 2009, the amount would have translated into about 525,500km of roads, several multiples of the paved road network we now have nationally.
Meanwhile, was it not this administration that set up an assessment committee to look into cases of abandoned Federal government projects? The final report of the committee can be summed up in 2 points: there are 11,886 abandoned federal projects across Nigeria, and it would cost an estimated N7.78 trillion to complete these projects. With the $31bn in stolen funds, Nigeria would have successfully completed about 65% or some 7,000 abandoned projects all across Nigeria that would create jobs and improve our standards of living.
The report of the committee has not been implemented; instead, President Jonathan recently sent a letter to the National Assembly requesting approval to borrow $7.9bn to fund a pipeline of projects between 2012 and 2014. This is not to say borrowing money to fund national developmental priorities is a bad idea. But we all know that most of these monies will add up to the Jonathanian statistics of stolen funds.
On the issue of debt, if we add the proposed borrowing to our currently known $5.7bn debt burden at the end of 2011, our external debt stock would rise to $13.6bn by 2014. It leaves little to wonder if Nigeria can sustain servicing its rising debt profile. Curiously, the proposed foreign borrowing and the requests were not included in the 2012- 2015 Medium Term Expenditure Framework presented to the National Assembly last year by the President himself, thereby violating the Fiscal Responsibility Act 2007.
The most frightening aspect of the $31bn question is: what if international and reputable audit firms had been engaged to audit Nigeria’s accounts not just at the federal, but also at state and local government areas? What would have been the findings? It is not hard to imagine that Nigeria would have been labelled the world’s most corrupt country by far, without a close second.
What should concern every Nigerian is that the President knows where mass fraud is being perpetuated, yet chooses to ignore the goings on. Why else have all the reports on the petroleum subsidy fraud only resulted in more ad-hoc committees, and then white paper committees whose reports are never ever published, and then finally abandoned to gather dust with no pretext at even attempting to implement any of the recommendations? No wonder, Dr. Faruk Lawan had to be compromised, while deliberate attempts were made to discredit the Ribadu Task Force report.
If the President wants to be regarded with any vestige of respect now or in the future, he must rise up with some spine, face corruption squarely and fight it with sincerity. He must de-emphasize reliance on foreign and domestic borrowings that simply line up the pockets of the lenders and the few unpatriotic Nigerians serving their interests. He must order the Debt Management Office to publish information on existing loans, tie them to the projects for which they were obtained, and make this information public to all Nigerians on a regular basis.
In the meantime, what most Nigerians simply want to know from the president is what happened to N5trillion in 30 months. That is the $31bn question which Dr Jonathan ought to answer