Nigeria is on auto-replay. Every time I make this statement, I feel a tad older than I really am, but let me tell you some stories. In April 2016, I was reporting the World Bank/IMF meetings in Washington DC — this was my first time at such an event. Ngozi Okonjo-Iweala, the former finance minister, said there was no political will to save under the Goodluck Jonathan administration.
I reported what she said in her exact words. It was really late in the night. Once I was done filing the story, I went to bed. By the time I woke up in the morning in the US, the story had gone viral in Nigeria. Lots of people were already looking for me. The former minister’s aide had released a statement to discredit my report.
The summation of what she was saying was: State governors, NOT Jonathan, lacked the political will to save. I asked the International Monetary Fund (IMF) for a video of her speech, so I could redeem my name by sharing this with the Nigerian people. They indulged me, and I shared the video here. The video vindicated me and influenced my journey into fact-checking. But that is story for another day.
I would later meet Okonjo-Iweala again the following year, and we spoke about some of these stories, and I came to understand more of her position on the whole “political will” issue. What has this got to do with President Bola Tinubu? Yes, I know you are already asking. So here goes everything:
WHO WILL BE TINUBU’S AMAECHI?
Following the float of the naira, I had predicted that states would get up to N1.1 trillion to share at FAAC in July from over N700 billion in June 2023. Eventually, the numbers were way higher than I predicted, the Federation Account Allocation Committee (FAAC) surprisingly had N1.9 trillion to share, which meant state governors could get more than double the funds they got in June.
However, Tinubu approved the establishment of the infrastructure support fund (ISF) for the 36 states as part of measures to cushion the effects of petrol subsidy removal. The move meant FAAC will save N790 billion — or 42% of FAAC income — to ISF from the funds that would normally have been distributed to FG, states and LGAs. The FG, states, and LGA share only 47% of what was generated. Does this remind you of anything?
If it does not, let me remind you: In 2011, the Goodluck Jonathan administration set up a Sovereign Wealth Fund (SWF) to manage some of Nigeria’s excess crude savings. So FAAC did not share all the money that came into the federation account. Before Jonathan, former president Olusegun Obasanjo had an excess crude account (ECA), which saved $22 billion for the rainy day. What the Jonathan government did was to institutionalise the process by an Act of parliament, which led to the birth of the Nigeria Sovereign Investment Authority (NSIA).
Immediately after NSIA was set up, governors, led by Rotimi Amaechi, the governor of Rivers state at the time, sued Jonathan’s administration, to block a transfer of $1 billion from ECA to set up SWF. After a long battle, the supreme court asked the states and the federal government to settle out of court. Jonathan succeeded in setting up NSIA, and the governors won the move to share oil savings.
In 2016, after sharing oil savings, Ameachi explained why he and other state governors, insisted on sharing what should have been kept for rainy days. Who will lead the charge to share ISF? Who will be Tinubu’s Amaechi?
A TEST OF TINUBU’S POLITICAL WILL?
So if you get Nigeria’s auto-replay, you should already predict where we are going with this. At the FAAC meeting last week, governors effectively left N790 billion (over $1 billion) on the table to be saved for infrastructure support. In August and September, they will likely do the same, and maybe for a few more months until some of them decide, that the money should be shared — and not saved.
If our auto-replay is anything to go by, governors will, in a short while, ask that the infrastructure support fund be shared as the oil savings were. They will argue that policies by the Tinubu administration are responsible for the higher cost of everything in the country, hence, the money left on the table should be used to fix the problem he created. Then, we will be back to an era without savings, the era Okonjo-Iweala complained about in 2016.
That test of Bola Tinubu’s political will is coming; will Tinubu be able to convince governors into saving for infrastructure? Obasanjo did this from 2004 to 2007, thereby saving the country from the 2008/2009 global economic crisis. Will Tinubu follow Obasanjo’s way or will he follow Jonathan’s path and succumb to the will of the ‘sharers’ to eat our tomorrow, today?
THE CABLE
