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Past govts owed contractors N500bn -Okonjo-Iweala
ABIODUN FELIX, Osogbo
FINANCE
Minister, Dr. (Mrs.) Ngozi Okonjo-Iweala at the weekend accused previous
administrations in the country of ruining the economy and in the process,
accumulated arrears of debt of over N500 billion to contractors who consequently
abandoned several projects.
The minister spoke while presenting a
paper titled: Infrastructure and Sustainable Development in Nigeria
presented at the expanded zonal executive meeting of the Peoples Democratic
Party (PDP) in Ada, Osun State over the weekend.
According to Okonjo-Iweala, "previous
administrations during the past couple of decades built up contracts arrears,
left decaying infrastructure, declining educational and health standards,
massive capital flight, and build-up of external debt due to infrequent and late
servicing of our debt.
"Today, the country has numerous
uncompleted and abandoned projects, massive accumulation of contractor arrears,
some dating back to 10 years or more. The other day, I mentioned that such
arears are in excess of N250 billion, but since then we have finished compiling
our members and the arears are actually double that figure. This cannot be good
for business confidence," she noted.
The minister also said successive
administration in the country husbanded a system that totally undermined and
destroyed the public service.
She said this led to "low and declining
investment in the non-oil sector, rising unemployment, increasing poverty, and a
general loss in living standards and well-being of Nigerians".
Berating the past administration,
Okonjo-Iweala revealed that "available data indicate that the growth of the
non-oil sector over the last 20 years, has challenged less than three per cent
per annum, which is barely enough to keep pace with the 2.8 per cent per annum
population growth rate."
Dr. Okonjo-Iweala stressed that although
the oil sector accounts for over 90 per cent of export earnings, about 75 per
cent of the fiscal revenue and sizeable share of the Gross Domestic Product
(GDP), its employment is about five per cent.
Dr. Okonjo-Iweala explained that "the lack
of private sector growth encouraged an over-reliance and over-dependence on the
public sector by Nigerians with dire consequences as it affected spending and
fiscal policy.
"Our expenditure pattern became mostly
pro-cyclical. With a tendency to embark on huge expenditures whenever the oil
revenue was high, with little or no reparation for future downturns in the
market," the minister said.
"Poor fiscal discipline and weak
expenditure controls, combined with a culture of accommodating monetary policy,
has usually led to an increase in the rate of growth of money supply, resulting
in higher rates of inflation, and putting pressure on the exchange rate.
"The capital budget, under which
infrastructure is funded, has usually borne the brunt of expenditure cutbacks
during periods of weak oil market performance. With cutbacks, existing
infrasture was poor maintained, ongoing projects abandoned and the development
of new ones postponed," the minister stated.
She disclosed that a bill is already
before the National Assembly aimed at providing a regulatory framework within
which the private sector can partner on infrastructural provision.
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