The Presidential Advisory Council (PAC) has raised alarm over widespread and substantial increase in the level of corruption in all sectors of government, resulting in extensive haemorrhage and wasteful expenditure, under the present administration.

The Council, in a report submitted to President Goodluck Jonathan, on January 20 this year titled 'Memorandum on Effective and Optimal Management of National Resources', and signed by its chairman, Lt. Gen.
Theophilus Yakubu Danjuma (rtd), said: "The PAC, at its meeting held on
December 15, 2010, comprehensively reviewed the macroeconomic
performance of the country and "notes with grave concern the sub-optimal
management of the national resources and the risks of deterioration in
the macro-economic condition of the country in the face of possible
external shocks."

In the report, the PAC further warned that, "The widespread corruption prevalent at all levels of government remains an issue in budget implementation. Funds allocated to the three tiers of government,
by way of annual budgetary estimates, are inadequately accounted for
when it comes to performance measurement. Nigeria has remained
internationally uncompetitive as a result of unnecessary delays among
regulatory agencies in administering published incentives for would-be
investors. This has severely hampered the implementation of several
policies, like the Vision 2020.

"No economic indicator better exemplifies our poor management of
resources than the depletion of the Excess Crude Account (ECA) at a time
of rising oil production and prices. This is considered a negative
development. The ECA has been eroded from $20 billion to approximately
$1 billion between 2007 and 2010. However, at the end of the year,
precisely on December 31, 2010, the sum of $1 billion was fully drawn
down and shared among the three tiers of government."

PAC also drew the attention of the president to what it described as the over-arching role of the legislature in the nation's budget formulation and implementation process.

It warned that, "The principle of separation of powers is entrenched in the Constitution - it is not so in practice. The legislature has exceeded its normal role of scrutinising the budget at committee stages
and has distorted and inflated the estimates. This is in addition to the
debilitating effect of the larger-than-normal legislature cost. Nigeria
is now considered one of the most over-governed nations in the world in
terms of cost of administration."

The Council further decried that the important oversight function of the legislature has been abused "with additional sums of money allocated to Senate and House committees that, among other things, physically
visit project sites for the purpose of ensuring that the allocated funds
are judiciously expended. These visits serve primarily to further
increase recurrent expenditure and it is an incontrovertible fact that
neither the quality of our spending nor the value-added from spending
has been improved as a result of this oversight function. In any case,
this trend is unsustainable."

Another area of concern, which PAC drew the attention of the president to, is the sharp increase in public debt in recent times. It noted that the state and federal governments have resorted to borrowing
through bank loans and bonds to finance their budgets.

"While governments across the federation may consider it expedient at
this point in time, we must, as a matter of course, consider the
consequences of the growing debt burden and its structure and terms on
the future of our nation, especially when it is not always clear that
the money raised from the issuing of bonds will be expended on
income-generating or productive capital investments.

"Fiscal indiscipline, which can be put in simpler terms, as the mismanagement of public funds remains a serious threat to the Nigerian economy," the memo further noted. "Revenues accruing from the oil and
gas sector, which should grow the reserves, have remained threatened by
Nigeria's huge deficits.

"Uncertainty surrounding the passage of the Petroleum Industry Bill (PIB) for over two years has jeopardised new investments in that sector. Consequently, several Foreign Direct Investment (FDI) decisions have
been terminated, which is threatening the growth of the oil and gas
industry on one hand, and government revenue on the other."

PAC, in its 12-point recommendation to the president, advised that the government must be seen to strictly implement a zero-tolerance policy on corruption.


Reacting to the development, the Nuhu Ribadu Campaign Organization called for the president's resignation, saying it is particularly worrisome that the damning verdict was given by the president's own
advisers.

"The president, who seems to be helpless in the face of this national problem, should also resign on the grounds of the findings of the PAC," Ibrahim Modibbo, the spokesperson of the organization, said in Abuja.

Human rights activists who spoke with journalists on the issue described Jonathan's activities in the light of the PAC's recommendations as an act of irresponsibility.

We are complaining that the size of the government employees is too large and he is still enlarging it. That is irresponsible.

I want to also querie the depletion of the ECA, arguing that the government's expenditure has not translated into growth.

Why is the excess crude account depleting? Why is he emptying the treasury? What about the future? Why does he want the country to stop moving? These activities are not translating into development. President Jonathan owes
the country an explanation.

There have been concerns over the state of the ECA. some weeks ago, the foreign media carried reports about the reluctance of foreign investors, who were worried about the unchecked depletion of the ECA, to
invest in the $500 million bond issue of the government.

Mounting concern about a huge outflow of money from Nigeria's 'rainy day' oil fund has prompted some big investors to shun the country's debut international bond issue.

The ECA had depleted from $20 billion in 2007, when former President Olusegun Obasanjo, who created it, left office, to less than $400 million in September 2010.

William Wallis, the Financial Times Africa Editor, who has been covering Nigeria's foreign investment since 2007, explained why foreign investors were reluctant to invest in the bond.

"You would not normally, for example, expect foreign reserves to be going down, and oil savings to be depleted, while debt levels are rising too, all in a year when oil production has recovered and prices are
soaring.

Few days before the Peoples Democratic Party (PDP) held its presidential primaries, the Federal Government drew $1 billion from the Excess Crude Account. The money was said to be shared among the federal,
state and local governments, but some media reports suggested that the
money was disbursed to enable governors fund the Jonathan/Sambo
campaign. This is outrageous because Federal Government's financial recklessness and inability to effectively tackle corruption is destroying the economy. 

 

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