ABUJA — 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?
http://www.vanguardngr.com/2014/02/house-
reps-summons-okonjo-iweala-clarify-50-
questions-answered/
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?
http://www.vanguardngr.com/2014/02/house-
reps-summons-okonjo-iweala-clarify-50-
questions-answered/
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