Soludo: the absurdity of his missing N30 trillion allegation
Everybody is an economist in his/her own little way. Thus, you are an economist once you are able to differentiate your needs from your wants, and then, decide on how to allocate your scarce resources (money) to those products that you need.
You don’t even have to acquire a degree in economics to make these decisions. They are inherent in our daily lives.
However, it is the duty of a trained economist like Professor Soludo to examine your behaviour and that of other small businesses in order to determine the factors that influenced your choice of a product over another.
These indicators of consumers’ behaviour will assist in forming the overall macroeconomic policy of a country; in dealing with growth, inflation and unemployment etc.
For instance, the increase in demand for goods and services will drive up prices, which will increase money supply that will lead to inflation. Conversely, if the market is oversupplied, prices will fall; profits will decline; growth will slow down; redundancies will follow and lead to unemployment.
Hence, an economist will tweak policies that will bring equilibrium (where supply meets demand), which will stabilize prices; steady growth; reduce inflation and unemployment.
The above is the summary of what contributed to the growth, inflation and unemployment data that Soludo used in his article; Buhari vs Jonathan: Beyond the Election.
In his 12-page article, Soludo tried to paint the economy under Pres. Jonathan gloomy. He churned out data to support his opinion but only succeeded in saying what everybody already knew; the price of oil has fallen; Naira has depreciated; etc.
But Mrs Okonjo-Iweala (Finance Minister) replied Soludo that he shouldn’t be talking about the economy because the Nigeria banking system almost collapsed under his watch. In fact, Soludo’s successor as CBN Governor (Sanusi) told the world that the entire Nigeria financial system was rotten.
Then, she accused Soludo of being used by the enemies of Pres. Jonathan’s administration. She also doubted his sincerity in using outdated economic data in arriving at his position.
Talking about economic data, should anyone really rely on the data that Nigeria presents?
Take unemployment data for instance; apart from the civil service and some corporations that remit their employees income (PAYE) taxes, there’s no other method of obtaining employment/unemployment figures.
Besides, self-employed Nigerians such as mechanics, labourers, babysitters and traders etc. are not captured in the employment statistics; whereas in Europe they are included. It doesn’t matter the kind work an individual does or the level of income he/she receives but as long as that person earns an income he/she is employed.
Therefore, it is only when all the segments are included in the statistics that a realistic unemployment data can be achieved, which can turn out to be lower than what it is today.
In fact, due to the credible data obtainable in advanced societies, Nigerian economists excel working for IMF and World Bank etc. But in Nigeria, data and the realities on ground will always clash.
So Madam Ngozi, it doesn’t matter the data Soludo used, the outcome will always be suspect.
Now, Soludo irked by the response from Okonjo-Iweala produced another 12-page article; Ngozi Okonjo-Iweala and the Missing Trillions (1). Soludo wrote that he was careful not to mention Okonjo-Iweala’s name in his first article.
But whether or not he mentioned her name, Mr Soludo, as an economic consultant to most governments ought to know that condemning an economic policy of a government is indicting the Finance Minister and the consultants that formulated the policy. They will surely respond to his accusations.
Anyway, Soludo alleged that within the last 4 years, N30 trillion has been misappropriated, missing or stolen under the watch of Okonjo-Iweala. “For the sake of Nigeria, I won’t keep quiet anymore” - Soludo.
But when did Soludo know that N30tn was missing? Why didn’t he mention this in his first article? It took him 24 pages of article to simply inform Nigerians that their N30tn is missing; at least, that’s what Nigerians remember from his whole writing.
APC members are hailing Soludo as a patriot for exposing the fraud. A human rights group has written to Okonjo-Iweala, citing freedom of information act, to explain the missing money or face court action.
I thought freedom of information act allows an individual to obtain information kept in a government file. But if Jonathan and his people stole the money will they leave the traces in any file? That’s nothing but being dumb.
Furthermore, hear Femi Gbajabiamila, the APC house minority leader; “now, let us assume that [Soludo] embellished and exaggerated his N30tn figure… even if it is N15tn or N20tn, it still beats the imagination and shocks the system”.
At least, Femi has some doubts about the missing N30tn. So, if there could be an exaggeration, it also means that there could be no missing N30tn.
But if APC and their co travellers want to investigate the alleged missing funds, they should ask Soludo to substantiate his allegation. After all, the burden of proof lies with the complainant.
Now let’s do some maths and see what it will look like for Nigeria to lose N30tn without feeling the shock before Soludo dropped his bomb. Nigeria’s yearly budget is approximately N5tn and it is financed mainly by oil revenue.
Nigeria produces about 2 million barrels of oil per day (bpd). Let’s assume that everything is sold and the country keeps 100% of the income without giving the oil companies and others their shares.
2,000,000 bpd X $100 per barrel (pb) = $200,000,000 per day (pd) x 365 days = $73,000,000,000 per year x 4years = $292,000,000,000 x N160 exchange rate = N46,720,000,000,000.
From the calculation above, Nigeria will make $292billion in 4 years from the sale of 2 million barrels of oil per day. The equivalent in local currency is N46.72 trillion in 4 years.
Overall, if N30tn is missing from the country’s total income of N46.72tn in the last 4 years, as alleged by Soludo; the balance of N16.72tn wouldn't have been enough to finance the country’s 4 years budget of N20tn.
This allegation is absurd and no wonder Mrs Okonjo-Iweala said she would not “join issues with what didn’t happen”.