Banking Of Public Funds

Banking Of Public Funds, Corruption & Double Speak!

Les Leba

Many years from now, historians may conclude that the most obvious defining features of the first nine years of third Republic so far was the art of ‘double speak’ or in plain language, the penchant for insincerity and deception. Today most Nigerians are no longer in doubt that whenever government expresses its intensions to pursue noble ideals for the common good, in reality, the people would expect the direct converse of such propaganda.

For example, former President Obasanjo recognized the yearnings of Nigerians for steady power supply and promised uninterrupted electricity within 2 – 3 years of coming to office, but regrettably, even after an alleged sum of $10-16bn had been expended on power projects in the country, our power generation and distribution capacity is less than the 3000MW inherited when he came to power. In his first term in office, Obasanjo was totally against any form of constitutional review and anyone who expressed support or reason for a national conference was labelled a traitor and renegade. The nation, however, witnessed a total somersault when the same Obasanjo suddenly became the senior apostle for constitutional amendment so long as it accommodated the introduction of a third term in office for the incumbent!

The preceding administration also paid lip service to the rule of law and an expatriate student of Obasanjo’s rhetoric may be forgiven for thinking that the ex-President was God’s gift to Nigeria for the preservation of the rule of law. The reality on the ground, of course, was that Obasanjo only obeyed the court judgments which favoured his position and indeed rode rough shod over any law or judgment that was not in consonance with his personal wishes. This same duplicity can be discerned in a host of other government posturings from the privatization exercise, to electoral reforms, excess crude account, deregulation and economic reforms.

The prevailing hypocrisy is probably most glaring in the area of government’s declared war on corruption. The series of revelations of the sordid and unpatriotic deals in the power sector; the mal-administration of the Petroleum Trust Fund; COJA, the sale of undervalued government properties and common-wealth to cronies and party stalwarts; the arbitrariness in the composition and management of the Police Equipment Fund, the illegal withdrawals from the equally illegally consolidated excess crude account; the list of malfeasance is open-ended, and at the end of the day, there can only be one conclusion, and that is that the trust Nigerians had in elected or selected public office holders and civil servants has been grossly betrayed and the patience of our people countenanced as foolishness.

Nigerians were assured that the public procurement process had been streamlined to reduce corruption and Dr. Ezekwesili, a member of Obasanjo’s high profile Economic Team received local and international accolades, together with the then Minister for Finance, Dr. Ngozi Okonjo Iweala, for the excellent work they were apparently doing in their respective posts; the IMF (International Monetary Fund) which sponsored these candidates and indeed paid their salaries while they served the Nigerian government have also elevated these eminent hit-women to Executive Vice Presidents of the World Bank for carrying out their briefs for Nigeria to the letter. The Due Process office claimed at one point to have saved the country about N60bn during Ezekwesili’s tenure, but the staggering sums which are now revealed to be misappropriated in various government ministries, departments and agencies (MDAS) during the same period probably indicates that the Due Process office could not have done worse, if all its officers spent most of the time snoozing at their desks.

Our economic situation continues to deteriorate inspite of the genius of Okonjo Iweala and Soludo at our Finance Ministry, and Central Bank respectively during Obasanjo’s tenure.

Those who have had close contact with ministries and parastatals will confirm that the N300m scam in the Ministry of Health is not peculiar! It would require a dozen EFCC’s and ICPCs and immediate expansion of our jail houses to accommodate all those who would be indicted by similar investigations and audits in almost all government establishments.

These patrons and beneficiaries of government ‘come and chop’ projects will tell you that corruption in government cannot be reined in because the public officers have deliberately left the stable doors open! In focused economies, worldwide, the Central Bank is the prime custodian of the nation’s wealth and treasury. In the same manner that the private sector deals with commercial banks, the Central Bank is the banker to government!

If government and its agencies did what is sensible and appropriate by placing its revenue in the care of the CBN, it would, for instance, have been impossible or at worst very difficult for the Ministry of Health to disregard the instruction of Mr. President to MDAs to return the unspent portion of their 2007 budget to the treasury, as the CBN would have simply frozen the balances in MDAs accounts immediately on receipt of Mr. President’s directive. Finito!

In addition, a true historical track record will automatically always be available for all disbursements made by MDAS, and thereby facilitate audits and financial control of these establishments. Billions of Naira have been allegedly misappropriated by State Governments with the instrument of the ISPO; i.e. Irrevocable Standing Payments Order – a system which facilitated treasury looting through conscious collaboration with commercial banks. Even though the EFCC and ICPC have fingered the odious vehicle of ISPO, no one has yet been indicted or committed to prison for involvement in such scam. It would also be impossible for public officers to collect up front interest on MDAs deposits with commercial banks!

Equally important is the beneficial impact on the economy if CBN performs its role as government’s banker; the perennial problem of excess liquidity induced by the extended capacity of banks to extend credit whenever monthly allocations of the three-tiers of government and MDAs are paid into their accounts with commercial banks will be assuaged as less funds will become available for such credit expansion. In the same vein, the CBN and Debt Management Office do not have to continue to increase the Nation’s indebtedness by borrowing back from the banks funds which had earlier been deposited as allocations to the three tiers of the government by the same CBN! The Nation paid interests value of almost N400bn last year, even though the over N2000bn so far borrowed are just stored as idle funds in the CBN vaults. The value of such interest payments will approach N600bn in 2008 even though the budget is silent on this inexplicable waste which surpasses any other sectoral allocation by a wide margin!

The unfolding revelations of extensive treasury looting in all facets of government suggest that a significant portion of the government revenue after payments of interest and over N600bn petrol subsidies will go into the private pockets of these public servants whom we have entrusted with our welfare and national destiny. However in keeping with tradition, these vultures will remain prominent in the vanguard of government propaganda machinery which seek to assure us that we are on track and with more patience, Nigerians will end up better off in December 2008 even if critical budget issues remain un-resolved with a quarter of this year already wasted and inspite of the obvious pitfalls nay Niagara waterfalls ahead!

SAVE THE NAIRA, SAVE NIGERIANS!