*By Daniel Osofisan*<\/p>\n
The naira has been on a steady decline for the past few months. The
\ndisparity between rates at the Central Bank of Nigeria (CBN) and that of
\nthe parallel market is as clear as the difference between day and night.<\/p>\n
Many economic analysts and keen followers of the economy have blamed the
\nsituation on factors varying from the fall in oil prices to the depletion
\nof the Excess Crude Account and the role of the Bureaus De Change (BDCs).<\/p>\n
It would be recalled that former Minister of Finance and Coordinating
\nMinister of the Economy, Dr. Ngozi Okonjo-Iweala had a run-in with the 36
\ngovernors under the auspices of the Nigeria Governors\u00e2\u20ac\u2122 Forum. Against her
\nadvice,\u00a0 significant portions of the Excess Crude Account (ECA) were used
\nto augment monthly allocations to local and state authorities. The states
\nhad maintained that rainy days were already at hand and in fact (the rain)
\nwas already pouring, so the money needed to be used right away.<\/p>\n
This rash nature of the governors, who always want to spend, spend, and
\nspend, is why we are presently facing this freefall in the value of the
\nNaira. If they had heeded the counsel of the former finance boss to save
\nfor the rainy day, we would not be in the mess we are in now.<\/p>\n
But, no! They decided to feed fat on the nation\u00e2\u20ac\u2122s oil boom and ended up
\nplunging the entire country into economic crisis. Between 2011 and 2014,
\nthe 36 states of the federation received a total of N2.92 trillion from the
\nExcess Crude Account. This amount alone is close to 50% of the country\u00e2\u20ac\u2122s
\n2016 budget. What would be the strength of the Naira if these monies were
\nsaved and not expended by the governors?<\/p>\n
Dr Okonjo-Iweala also said that a significant portion of the billions of
\ndollars drained from the oil savings account over the past two years was
\ndistributed to \u00e2\u20ac\u0153powerful governors\u00e2\u20ac\u009d instead of being saved.<\/p>\n
The decline in oil price reduced the earnings of the country. This
\nsituation in turn made the CBN to devalue the naira last year by 8 percent
\nstating that it was running out of forex reserves with which to defend the
\ncurrency.<\/p>\n
If the governors had not arm-twisted Dr Okonjo-Iweala by depleting the ECA,
\nthe CBN would have had enough forex to defend the Naira instead of having
\nto devalue it. And since then, the naira has declined steadily before its
\nrecent rise against the dollar.<\/p>\n
You would remember that these same state governors requested $2 billion
\nfrom the ECA to complete projects and provide security ahead of last year\u00e2\u20ac\u2122s
\nelections. The powers the governors wield have to be put on a leash lest
\nthey run this nation aground with their insatiable appetite. Nigerians must
\nrise up and speak with one voice to confront waste in government so that
\nour economy can be brought back to life.<\/p>\n
*Daniel Osofisan writes from University of Jos*<\/p>\n
danosofisan@gmail.com<\/p>\n","protected":false},"excerpt":{"rendered":"
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