Nigerian gov’t has excess cash – Hamman Tukur

During the recent protests over fuel subsidy removal, one of the grouses is the issue of the jumbo pay of political office-holders. As chairman of the RMAFC you had the opportunity of addressing the problem, but you were unable. Why? Hamman Tukur: The pay system for political office holders were designed within the economic fortunes […]

During the recent protests over fuel subsidy removal, one of the grouses is the issue of the jumbo pay of political office-holders. As chairman of the RMAFC you had the opportunity of addressing the problem, but you were unable. Why?

Hamman Tukur: The pay system for political office holders were designed within the economic fortunes of the country. The scale we used when I was the chairman is related to civil service salary structures. The maximum amount we gave even the president was related to what should have been paid relative to his position and the rest of the civil service. Like the permanent secretaries, the ministers and others. But in real terms, what is being paid is different from what we were asking government to pay.

Let me give you a typical example from when I was chairman of RMAFC. We allowed loans for every legislator in this country to buy a car and we gave allowances for that. But then federal and state legislators bought cars. We queried the clerks of the National Assemblies because they were the accounting officers, asking them why they did so. They argued that the cars were meant for committee meetings, and such. But we asked, how can you buy a number of cars that is approaching the number of legislators that you have? You see, what the legislators were doing is that virtually every member is either a chairman or vice-chairman of a committee or the other and therefore they argue that the car is not meant for the person but for the post he or she is occupying. And that is how inflation came into the system.

Our advice was take a loan, buy a car and pay over a period of four years but they now went to buy cars for every member. In addition, travelling among public officials became more frequent and this also added to the cost of governance. I also remember we advised the legislators not to stay within any designated legislative quarters because when they were campaigning they were with the people, so when you come into office, stay with them so you know how they feel.

But as chairman you could have stressed that position, maybe by coming up with a memo…

Tukur: How many times did we do that with no effect? We said several times that no, you can’t do that because it is outside the rule of law. But Nigerians being what we are, the rule of law is not taken seriously, particularly by top government functionaries.

Coming to the issue of subsidy removal, you were among those who were invited to the House to speak about the matter. What went on there?

Tukur: When you say subsidy removal, are you actually removing or you are talking about subsidy transfer? That is where the whole thing is a bit muddled. When government says ‘we are removing subsidy’ I asked the Minister of Finance who was at the House sitting, ‘are you actually removing subsidy or you are transferring subsidy to Nigerians?’ When you say the price of petrol is N141 from N65, there is a difference of about N76. You say you are removing but then you are asking Nigerians to pay the N76. So why don’t you call it subsidy transfer, not removal? With the current price of N97 you are now asking Nigerians to pay N32.

The government argues that they are going to use this money to develop infrastructure, but I asked the minister how can you narrow the argument of infrastructural development in Nigeria  to just 445,000 barrels of crude oil for internal consumption, something that is not meant to be exported at all going by the OPEC quota for Nigeria.

So instead of pinning it down to subsidy why don’t you go to the main source of the revenue, which is the crude oil itself? If you remember, it was the government itself that went to the National Assembly to say the benchmark for crude oil for the current budget is $65 per barrel. Now from available data, crude oil never sold below $100, I think it was only a couple of weeks that it sold for about a little less than that. Suppose it is a $100 average, you have a $35 extra. This extra money is how countries like Indonesia were able to convert oil money into infrastructure. Believe me, if only we have infrastructure, there will be no problem in this country, everybody will be happy and politicians will be able to walk freely without police or sirens.

So what happens to this excess money that accrues from the $65 benchmark?

Tukur: Every now and then the government takes some of this money and says ‘let us disburse it’. For example about three months ago, the government went to the account and withdrew some millions of dollars to be part of what is to be distributed. But you see the problem there is rule of law does not apply. Neither the federal government nor the state governments return to the assemblies to ask for supplementary budget.

Also, all the conflicting claims from the ministry of finance, the Customs and the petroleum ministry, about the quantity of our petroleum imports does not speak well about the country. I believe President Jonathan is not corrupt but he does not seem to be getting correct information on which to base a decision. What he gets is what he uses. See how the ministers and all the agencies are now confusing him. NNPC comes with a different figure, Customs the same, this one different, that one different.

While you were at RMAFC, how efficient was your monitoring of other government agencies?

Tukur: Nigerian government functionaries find it difficult to operate within the ambits of the rule of law. Let’s take FIRS for example. They tax companies on oil revenue but they illegally take 4% of whatever they collect. The Constitution is very clear about that. Personally, I went to former President Obasanjo and told him this is absolutely illegal and cannot be sustained. How can you authorize an agency to collect 4% of the federation account money and keep it? Do you know that FIRS does not go to the Board with this money because the Service is supposed to be a member of the Board of Inland Revenue Service? Of course they talk about security and others but not budget and revenue earned.

This is one of the reasons the laws became weak. In addition to that FIRS collects VAT. These are states tax. By law the federal government is appointed to collect the tax on behalf of the states and for that purpose it gets paid 15%. Now, what it does is a completely different thing. The federal government takes 15% as it fees for collecting these revenues on behalf of the state government. The FIRS in addition to that takes another 4% for itself after collection.

I went to President Obasanjo and told him this is absolutely illegal. At a stage the Chief of Staff to the president had to ask if I knew I was addressing the President of the Federal Republic of Nigeria. I said ‘yes, my loyalty to you Mr. President is to tell you the truth all the time and any officer of the government’. But the president knew it was the truth and that was why we sustained our relationship. If only officers of the government tell the president the truth, when he takes decision it will be based on the facts.

Don’t you think that corruption could be behind this recklessness by our public officials?

Tukur: Well, it could be attitudinal. Nigeria came from military dictatorship after about 18 years. Now, those who came into government after in a democratic dispensation are still using the same approach that obtains in a dictatorship. The situation was not helped by the fact that the first president we had in the new democratic dispensation was a former dictator.

You see, you cannot change such attitudes overnight. Facts in a dictatorship are difficult, but government functionaries in a democracy must learn that we’ve changed.

Are you in support of Nigeria borrowing money?

Tukur: Don’t forget that the present Minister of Finance, during the Obasanjo regime, took $12 billion as payment of loans to the western world. And don’t forget it has never happened to any country in the world. There is no way a country can survive that, not even the U.S economy could have afforded it, but we paid. What was the argument? To get relief from debt servicing. So why are you going out to take a loan again?

Why are you taking loans when you have excess oil revenue accruing to you? What is wrong with taking your excess from the Sovereign Wealth Fund to develop your infrastructure? They say they are keeping the money for future generations, but the question is when does that generation begin?

So, when some people say the government is broke, do you believe it?

Tukur: How can the government declare that it is broke when the quantity of crude oil being exported is still the same, while the price is going up?