TheCable

Adams Oshiomhole, governor of Edo state, has blamed the economic crisis facing the country on the “recklessness” of the administration of former president Goodluck Jonathan.

Oshiomhole said huge sums of money were unaccounted for under Jonathan’s watch and that oil theft reached an unprecedented level.

He said the government not only misappropriated the country’s resources but also gave its cronies avenue to exploit the nation.

He was speaking on Wednesday during Sunrise Daily, a breakfast programme on Channels Television.

“The crisis we have at the moment is not a flash; it’s going to be here for some time. I feel what has happened is that at the peak of the oil boom, prices were high and people made projections and budgets were drawn up on the basis of those numbers and along the line there was a sharp drop,” he said.

“The drop that people talk about is not just a drop in price. Because prices have dropped below this level before but what is new is the so-called theft of crude oil, a situation in which certain persons powerful in the system pretend not to know what is going on and simply explain that with huge losses through crude oil theft, we have a double theft, drop in price and escalation in the volume of alleged theft of crude oil.

“We know we have no control over price but we have control over stealing. We could have budgeted for the shortfall but what we did not budget for is having a federal government that will be so hopelessly incapable to protect our crude oil.

“The combine effect is this is that the total inflow into the federation account dropped sharply. This is also compounded by the fact that the ministry of finance and the ministry of petroleum resources refused to transfer to the federation account. Over the past four years, the NLNG has made huge payments, about $2.5 billion, which ought to go into the federation account, while this money ought to be transferred to the federation account it was unilaterally expended by the federal government.

“At the national economic council I fought the former finance minister and the then vice-president over this.”

Oshiomhole claimed that Jonathan’s government became insolvent and had to be depending on loans in order to pay salaries.

He said were it not for the loan, the worst state hit affected by the economic crisis would have been better than the federal government in terms of paying salaries.

“I speak on my honour that the federal government is broke and that they are borrowing huge in trillions of naira to pay salaries,” he said.

“The finance of the federal government under the past administration was in a worst shape. Over the past 9 months, the federal government could not pay salaries from her legitimate income, what she has been doing which states couldn’t do was to borrow, using the structure of the CBN, through various instruments; bonds, security, etc.

“So, if the federal government had been stopped from borrowing, the federal government would have defaulted much earlier than the states and the number of months that the federal government would have been worse than the worst state in the federation. The federal government allowed itself to borrow recklessly, quite reckless in the sense that no serious manager goes month after month to borrow for the payment of salaries.”

The governor added that revelations of the excesses of Jonathan’s administration have been coming into the fore, noting that President Muhammadu Buhari has made practical efforts to correct his predecessor’s anomalies.

“Two days ago we had reports from the office of the accountant general that the federal government illegally granted waivers to various agencies running into hundreds of billions of naira. Even value added tax (VAT) was waived,” he said.

“All these are sources of funding government. We must understand that in other climes, government does not live on rent from oil, government worldwide are run on taxes but this last government was infamous for being the worst in terms of granting huge sums of money in the name of waivers.

“Can you believe that even oil companies were granted so-called pioneer status, they set up a small vehicle in the oil sector, give them certain transactions, so that they would be excused from paying taxes and all these are federation assets? The way the government is structured, the money is meant for the local government, state government but managed by the federal government.

“The constitution is very clear on this issue and President Buhari alluded to this three days ago when he inaugurated the national economic council (NEC). He said those money should now flow to the federation account in compliance with the extant rules and because of president Buhari’s transparency and in line with his commitment to honesty and openness, the CBN is now going to transfer to the consolidated fund for distribution to state $ 2.1 billion which flowed in from NLNG this year. If that money had come in under the last government, that money would have been spent unilaterally.”