Why Jonathan left an empty treasury

Prof. Sylvester Monye served as Special Adviser to the president in the immediate past administration before taking his leave late in 2014 to seek the governorship ticket of the Peoples Democratic Party, PDP. Monye was a guest of Channels Television last Monday during which he fielded questions pertaining to the financial affairs of the Jonathan administration. Excerpts:

By Gbenga Oke

The language of opposition is different from the language of government. In government, anything you say has fundamental implications. Over the years, the parties that came together to form APC have been excellent in doing their job as opposition party, propaganda, they have   been very effective and they were successful in last campaign up to the point of winning election. Now they are in government, whatever they say or the language should change to language of government. When you say certain fundamental things like empty treasury, the country is broke, the economy was run aground, you are creating bigger problems for yourself. In my own position, it is not true.

Are you saying that ‘meeting an empty treasury’ is not true?

Sylvester Monye

The fundamental issue is was there supposed to be anything in the treasury? Before we can even begin to talk of empty treasury, we need to look at the provisions of the constitution. The constitution says that any money that is earned from oil sales, tax, customs collection, is going to the federation account, and once it goes in, it must be shared using the subsisting revenue formula sharing.

Now, we had a very visionary and strong leader in the person of President Obasanjo then. When he was president he said no, whether it is in the constitution or not, we must put something aside for the rainy day which is the origin of the Excess Crude Account. The Excess Crude Account accumulates from the difference between what is earned and the benchmark price in the Federal Government budget. So the excess of the oil benchmark goes into savings but the governors have said it is an illegality because the constitution says you cannot save and I am sure you are aware that the governors took the Federal Government to Court and they are in Supreme Court as we speak. It has not even been decided whether that action is illegal or not illegal. I am being told we currently have about 2.09 billion dollars in that account. It is that 2.09 billion dollars that people are fighting to say we will not have that savings. As long as that savings is concerned, they want it shared. So how can you be talking about empty treasury when there is a Court case saying that the little one you have must be shared.

If the FG gets its own share of the money, does it mean there will be nothing left?

When you do budget, the budget is an estimate of what you are going to get and a projection of how you will spend that money. So if this year, you say X amount of money is coming in and if it comes in, this is what we will do with it. Federal Government receives its own component and it is used on what the National Assembly approves it for. So that is budget.

You will recall that some years back, President Yar‘adua cum Jonathan told the governors to start the Sovereign Wealth Fund and they commenced that investment with $1 billion. Again, that investment is also being challenged, but upon that, Federal Government has been able to save $500 million on top of that $1 billion so in the kitty, we have in excess of $1.5 billion in savings. $1 billion belongs to the three tiers of government, $500 million belongs to Federal Government alone. Secondly, I have not been told the Federal Government is owing salary.

But did the Federal Government borrow to pay?

You know when you budget, you do either balanced budget or deficit budget. Deficit budget means you are going to spend more than what you have. It means you foresaw that in your planning that what you will get will not be enough to meet what you spend. Now if you borrowed money to meet your obligation, didn’t you foresee it and was it not approved by the National Assembly? So when people say you borrow, was it not planned for?

Can you explain what Mr President meant that he met empty treasury?

I have no idea of what he meant. In our constitution, every money that comes in is shared. The revenue that accrued from oil sales, customs and taxation in May was just shared on the 24th of June. $409 billion. What that means is that after sharing, the treasury is empty. This administration could as well say we don’t want the treasury to be empty, we want to beef up our savings, then we won’t share!

Are you saying they are doing this within the confines of the law?

Well, that is what the constitution says and that is what the governors are challenging in the Supreme Court.

The Buhari administration claims the Jonathan administration left nothing and that is why they have not been able to hit the ground running. What is your take on that?

That is funny. When you talk about government, you don’t use such words for a start. The tasks you see in government are enormous and that is why I said you don’t use such words for a start. There are ways of measuring any government and we have about three major international rating agencies. They look at your capacity to earn money, your capacity to meet your obligations and rate you. It is that credit rating that enables our private sector to go and borrow money abroad at reduced interest rate. If there was so much rot as they are implying, how come Nigeria continues to attract so much foreign investment? It is on record that Nigeria attracts more foreign investments that any other country in Africa. If Nigeria is in such a bad shape, why have the investors not run away? So saying rot will scare people away.