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The $289m special vote for nia was economic sabotage

“Having power destroys the sanity of the powerful. It allows their irrationalities to leave the sphere of dream and come to the real world.” Saul Bellow. (VANGUARD BOOK OF QUOTATIONS, VBQ, p 195).

FOR any economist worthy of the name it must have appeared like fiction or fairy tales. Who would have thought that a President of any nation, even a Banana Republic, said to be a Ph.D holder would in one day sign off N289 million to a security outfit without authority from the National Assembly, NASS, and have the funds withdrawn illegally from a government agency? Saul Bellow has pointed to how power destroys the sanity of most people. But, power allied with stupidity amounts to a double curse on the people led by such individuals.   As German philosopher Frederick Von Schiller, 1759-1805 (VBQ p 235) has advised us “Against stupidity [of the leaders] the gods themselves struggle in vain.”

Let us place the $289 million in its true perspective starting with the timing. By February 2015, the price of crude oil globally was already heading for the basement at under $60 per barrel from the zenith of $118 in 2013. External Reserve was being rapidly depleted; Excess Crude Account, had plummeted from over $115 billion in early 2011 to under $3 billion in early 2015. The monthly allocation to states was dropping rapidly such that by February 2015, when the $289 million was ordered released to the National Intelligence Agency, NIA, for reasons still to be disclosed, the situation was as summarized below in a column published on these pages in March 2015. Please read on.

“One does not need to be an economist to understand the points being made here. A sound understanding of elementary school arithmetic will be sufficient. If a state owed its staff three or four months salary, by December 2014, when the average price of crude was over ninety dollars ($90) per barrel, how would it be able to pay now that the January 2015 price is fifty-seven dollars ($57) and falling?

Furthermore, except for July, the revenue from crude oil in 2014 fell below budget every month. By October, it was as low as 45 per cent of budget and went steadily down till December. The Federal Government had augmented the revenue by drawing down the Excess Crude Account, ECA, until it came down to $4.5 billion in October – when $2 billion was again peeled off to help all the tiers of government. At the moment, there is little money left in the ECA to cushion the impact of dwindling oil revenue. In 2015 there will be no ECA cushion.

Obviously, the economy faced harsh times and all other sectors were forced to adjust thei expenditures downwards – except the NIA. The N13 billion given to the security agency in one transfer was more than what the six poorest states received that month and far more than what all the universities got. The Federal Government was even borrowing money at exorbitant rates to pay salaries and the foreign exchange market was poorly funded resulting in higher rates than what would have been the case.

Readers can recollect how all that was required to start rolling back exchange rates from N520/$1 to N380/$1 in March this year was the release of $380 million to appreciate the damage to the economy in February 2015 of withdrawing $289 million from circulation and just warehousing it.

The motives for the release are also as questionable as the quantum of foreign exchange involved. With only three months to the end of the first term, and re-election not assured, observers should wonder why so much money was taken out of circulation at once. What sort of imminent threat was the nation facing that would have called for such massive expenditure on security alone at a time when other national needs were in crying need of funds? Who initiated the request? Surely, such huge expenditure for anything outside statutory allocations would have to be justified by pointing to possible calamity. What was it?

Even if there was a valid reason the funds should not ordinarily have been taken directly from an agency of government which collected revenue for all the three tiers – Federal, States and Local Governments. To that extent the states and local governments were cheated by the Presidency and the NIA. They spent funds which did not belong to them and which had not been appropriated by the National Assembly.

With the benefit of hindsight and the little we have been told about the disbursement of the funds, it turns out that no single item was actually urgent. Building staff quarters for NIA personnel was not an urgent need which could not have been captured in the 2015 budget or even in a revised budget. The fact that as much as $43 million of the funds were still found intact two years after in a flat rented by the wife of the DG-NIA proves conclusively that public funds were handled like private assets? Were the DG’s wife and family allowed access into the flat at will? Who ensured that they also had no direct access to the money kept there?

Finally, who kept the records of expenditure to ensure they were made for the legitimate needs of government. That the NIA carried out clandestine operations is no reason why its accounts cannot be audited to ensure that the operatives are not lining their pockets with public funds. Foreign exchange which should have been in circulation promoting economic growth was simply packed away to the detriment of all Nigerians. That was economic sabotage; not security operations.


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