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n January 24th, 2013, Mrs. Obiageli Ezekwesili, the former World Bank Vice President for Africa Region and former Minister of Education under President Obasanjo (OBJ), delivered a thought-provoking Convocation Lecture at her alma mater, the University of Nigeria, Nsukka, on the topic "The Wealth and Poverty of a Nation: Who will restore the dignity of Nigeria?" Unfortunately, the key messages of the lecture have been overshadowed by the following sentence in her lecture: "Furthermore, it is happening back to back with the squandering of the significant sum of $45 Billion in foreign reserve account and another $22Billion in the Excess Crude Account…that the Obasanjo administration handed over to the successor government in 2007".

The reputation managers of the Jonathan (GEJ) administration wasted no time in firing back at what they perceived as an attack from an Amazon of the OBJ administration at a time of frosty relationship between OBJ and GEJ. Barely three days after the lecture, the Minister of Information, Mr. Labaran Maku, issued a press release which stated among other things that "The recent statements by Mrs. Obiageli Ezekwesili … betray a surprisingly limited understanding of government finances…The statement…that the governments of Presidents Musa Yar'adua (YA) and Goodluck Jonathan (GEJ) have squandered $67 billion in reserves (including $45 billion in external reserves and $22 billion in the Excess Crude Account) left by the Obasanjo Administration at the end of May 2007 is factually incorrect. At the end of May 2007, Nigeria's gross reserves stood at $43.13 billion - comprising the CBN's external reserves of $31.5 billion, $9.43 billion in the Excess Crude Account, and $2.18 billion in the Federal Government's savings… The figure of $67 billion alleged in her statement is therefore clearly fictitious". He went further to question Mrs Ezekwesili's record as Education Minister, stating that "During her tenure as Minister of Education between 2006 and 2007, she collected a total sum of N352.3 billion from direct budgetary releases… What did she do with all these allocations? What impact did it have on the education sector? One wonders if our educational system would have been better today if these allocations were properly applied". He concluded by painting a rosy picture of the macro-economic performance of the GEJ administration: "This administration has restored macroeconomic stability…We have reduced our fiscal deficit… while rebalancing our spending in favour of capital expenditure. These achievements have already received strong endorsement from international ratings agencies…This administration is squarely focused on promoting a stable, non-inflationary, and inclusive economic environment for Nigeria to ensure that Nigerians can live better and more fulfilled lives".

Two days later, in an oblique response to Mrs. Ezekwesili's "offending sentence", the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, who also served under OBJ, announced to the Meeting of the Convergence Council of Ministers and Governors of Central Banks of the West African Monetary Zone in Abuja that Nigeria's foreign reserve had reached $44.6 billion. She stated that "on the back of greater efficiency in the management of our resources, our foreign reserves soared from US$32.6 billion at the end of 2011 to about US$44.6 billion now…he Excess Crude Account, balance has also improved from $4.57 billion in August 2011 to about $9 billion now". The same day, the Senior Special Assistant to the President Jonathan on Public Affairs, Dr Doyin Okupe addressed a press conference on the same issue and reiterated Mr. Maku's earlier claim that Mrs. Ezekwesili lied about the amount of external reserves OBJ bequeathed to the Yar'Adua/Jonathan administration. Quoting from documents and statistics published by the Central Bank of Nigeria, he stated that "at no time did the nation's external reserve rise up to $67 billion, let alone the government have such to misuse." He also insisted that "the Federal Government did not at any time dip its hands into the external reserve to run government". He then called on Mrs Ezekwesili "to disclose the source of her figures or retract her statement and apologise to the government and people of Nigeria" or else "she should be regarded by all as a wilfully perjured individual not worthy of any respect or recognition whatsoever." Haba! I simply cannot understand why the reputation managers of the GEJ administration were so incensed and hyper-reactive to the Mrs. Ezekwesili's figure and a single sentence in a very long lecture, which could be honest errors or mistakes. Why must they throw caution to the wind to impugn the integrity of a woman who clearly belongs to the best and brightest of economic managers Nigeria has ever produced, and who has represented Nigeria well abroad as a Vice President of World Bank and a Director of Transparency International.

In this article, I will examine what are see are some the errors or mistakes of Mrs. Ezekwesili's "offending sentence" and the unwarranted attacks by Messrs Maku and Okupe, the reputation managers of the GEJ administration. I would like to state upfront that there is nothing unusual about the errors or mistakes I will be discussing. There are common errors that professional economists, including yours truly, make very often and should never be used as a measure of the competency of the makers of such errors or mistakes. The fact is that economics is not an exact science and economists are not clinicians" ( Jeffery Sachs, 2005). Therefore, mistakes or errors are norms rather than exceptions in economics and public policy.

For a start, it is important to point out that Mrs. Ezekwesili never used the figure $67 billion which is a "straw figure" created by Messrs Maku and Okupe by adding the two numbers in Mrs. Ezekwesili's sentence. Her phrase was "$45 Billion in foreign reserve account and another $22Billion in the Excess Crude Account". She did not add both numbers; if she wanted she would have done so. It appears that she thought that Nigeria's excess crude account (ECA) is different or separate from its foreign (or external) reserve account (FRA). I dare that most economists and top government officials including ministers, governors and legislators, may not know the relationship between the ECA and RFA. Very few economists know that Nigeria's FRA is defined to include the ECA. The fact is that the definition of Nigeria's FRA is somehow weird and confusing. According to the CBN, "Nigeria's external reserves comprise of three components namely, the federation, the federal government and the Central Bank of Nigeria portions. The Federation component consists of sterilized funds (unmonetized) held in the excess crude and PPT/Royalty accounts at the CBN belonging to the three tiers of government. This portion has not yet been monetized for sharing by the federating units. It is sometimes ignorantly referred to as the reserves of the country. The Federal Government component consists of funds belonging to some government agencies such as the NNPC… etc. The CBN portion consists of funds that have been monetized and shared…"

It is a fact that the ECA, an illegal contraption that was set up by OBJ in 1994, has been a subject of controversy and legal tussle between the federal government (FG) and the State Governors. GEJ has doubled down by setting up a Sovereign Wealth Fund with funds from the ECA. Some economists believe that the ECA should not be a component of the FRA. Thus, like many other economists, Mrs. Ezekwesili may have thought that the ECA is separate from the FRA. If this is the case, it does not in any way "betray a surprisingly limited understanding of government finances" as stated by Mr. Maku. I will not be surprised if neither Mr. Maku nor Dr. Okupe was aware of the difference between the FRA and the ECA before this controversy. If Mrs Ezekwesili was aware that that the ECA is part of the RFA, she would have said "$45 Billion in foreign reserve account including $22Billion in the Excess Crude Account". By treating the ECA as separate from the FRA, she committed an error of "double counting" which is not uncommon among professional economists and in public policy.

Mrs. Ezekewsili's second error is one of approximation and/or data source. From the CBN data quoted by Mr. Maku and paraded by Dr. Okupe (which I have verified as true from the CBN website), we know that the level of the FRA as of the time OBJ left office (May 29, 2007) was in fact $43.13 billion, including $9.43 billion in the ECA, as against the sum of $45 billion and $20 billion, respectively, alleged by Mrs. Ezekwesili. Clearly, the difference between $45 billion and $43.13 billion for the FRA is not statistically significant and can be attributed to rounding error (to the nearest "5" unit). However, the difference between $20 billion and $9.43 billion for the ECA is significant. The likely explanation of the differences between Mrs Ezekwesili's numbers and those of the CBN could be due to the fact that she may have obtained her figures from non-CBN sources or from past "provisional" CBN statistics which are different from actuals. However, I do not think she needs to disclose her sources or apologise as Dr. Okupe has demanded. Most researchers know that there are many government official publications that contain wrong or inaccurate data, and nobody has called on the publishers to apologise. With regards to the ECA data, it must be pointed out that there have been issues of transparency with that account and data series of the ECA are not available on either the CBN or FMF websites.

Mrs Ezekwesili's third error or mistake is the use of the word "squandering". It can be argued that the word is inappropriate in the circumstance and that, to use an American parlance, she misspoke. While some part of the funds bequeathed by OBJ to the YA/GEJ administration may not have been spent in a rational manner, it is exaggeration to say that all the funds were squandered as her sentence seem to indicate. Clearly, some of the funds may have been used rationally. The way Mrs. Ezekwesili framed her statement gives the impression that the YA/GEJ administration reduced the FRA and FCA to zero but we know that there was never a time when these accounts were zero since May 2007. In fact, the FRA reached its highest level ever ($62.1 billion) in September 2008 and the average monthly level has remained relatively high since 2007 thanks to higher prices of crude oil and higher crude oil production levels than under the OBJ administration. However, when you consider the fact that the FRA level OBJ inherited was a mere $5 billion in May 1999 and he bequeathed a whopping $43.13 billion, while the average monthly RFA has hardly exceeded this level ever since despite higher crude oil prices and production levels, one may conclude that OBJ was a better manager of the FRA. The average monthly level of the FRA increased from $5.31 billion in 1999 to $8.59 billion in 2003, then to $45.39 billion in 2007, $53.47 billion in 2008. Thereafter it declined to $44.7 billion in 2009, $37.36 billion in 2010, $32.58 in 2011 and stood at $43.83 as of December 2012 - almost the same level as of May 2007 (see Chart 1).When you compare the amount in the FRA and the price of crude oil (chart 2), you will that generally the higher the price of oil the higher the amount in the FRA. However, the "gap" between the amount in the FRA and the price of oil appears wider under the YA/GEJ than under OBJ which could be interpreted to mean that OBJ accumulated more FR than GEJ. In fact, while the average price of Nigeria's crude oil was about $40 between 1999 and 2007, it more than doubled at $90 between 2007 and 2012. Yet, on average there was hardly any increase in the FRA amount between 2007 and 2012

Mrs. Ezekwesili fourth mistake is to use a decline in the level of FRA as an indicator of profligacy. FRA is a "stock variable" and its level is determined by many short-term and volatile factors, especially the price of crude oil and output levels. I do not think "profligacy" or "squandermania" is a strong explanatory variable for the monthly or annual fluctuations in the level of the FRA. It could be misleading to use the level of FRA at a particular point in time how much of it was actually used or squandered over an accounting period. I think she should have used a "flow variable" such as oil revenue received over a period of time, recurrent expenditure, expenditure of the national assembly, presidency, oil subsidy and other non-productive expenditure as a percentage of total expenditure, and then compare these with the share of expenditure on the productive and social sectors, particularly education and health, over a long period of time, e.g. under the period before OBJ, during OBJ's administration, YA administration and GEJ administration. In order to determine whether funds were "squandered", it is important to examine the spending details and results of the spending and then pin-point the exact amount that was "squandered" and on what. However, if you take a close look at the FG budget details and actual spending, it is safe to say that at least 30% of FG spending qualifies as "squandering" as evidenced by the substantial overpayments for fuel subsidy, inflated contracts, the bloated federal executive, the excessive cost of government, wasteful and unproductive expenditures such as the N14 billion for the construction of the Vice President's house, N2.2 billion for the construction of a banquet hall in the presidential villa, the reported GEJ's 22 overseas trips in 2012 that gulped N3.3 billion, the N4 billion for Africa First Ladies House in Abuja and a host of similar expenses. Having gone through the FG budget details published on the FMF website, I have no doubt that there are a host of spurious items that can be eliminated or reduced drastically without affecting the performance of government and its agencies.

Mrs. Ezekwesili fifth mistake was that her statement implied that she was comparing OBJ's performance in economic management with that of Yar'Adua and GEJ, and that OBJ performed better. To be fair, if one looks at the context of the "offending sentence", it is clear that her aim was not to compare the three or two administrations. Her aim was to show that Nigeria has always failed to take advantage of the opportunities offered by commodity boom cycles to transform the economy - an irrefutable fact. Even the two OBJ administrations (1976-1979 and 1999-2007) failed on this score! The sentence preceding the offending statement reads as follows: "I have known at least five cycles of commodity booms that offered us rare opportunities to use revenues generated from oil to transform our economy. Sadly, each cycle ended up sliding us farther down the productivity ladder. The present cycle of boom of the 2010s is however much more vexing than the other four that happened in the 70s, 80s, 90s and 2000s. This is because we are still caught up in it even as I speak today and it is more egregious than the other periods in revealing that we learned absolutely nothing from the previous massive failures" No one can deny this fact, and I am glad that neither Mr. Maku or Dr. Okupe challenged it. Perhaps, Mrs. Ezekwesili would have framed the next sentence in a way that would not have given the impression that she was trying to compare OBJ and GEJ. Unfortunately, after the offending sentence, she doubled down: "Six years after the administration I served handed over such humongous national wealth to another one; most Nigerians but especially the poor continue to suffer the effects of failing public health and education systems as well as decrepit infrastructure and battered institutions. One cannot but ask, what exactly does Nigeria seek to symbolize and convey with this level of brazen misappropriation of public resources? Where did all that money go? Where is the accountability for the use of both these resources plus the additional several billions of dollars realized from oil sale by the two administrations that have governed our nation in the last six years? How were these resources applied or more appropriately, misapplied?" This could be interpreted as a comparison of both administrations and a castigation of the GEJ administration. If indeed her intention was to compare both administrations - and I see nothing wrong with that - she should have used some "flow variables" as I indicated previously. It may be too early to compare the OBJ admin with that of GEJ since the latter has about five more years to equate OBJ's eight-year rule. However, I think an analytical comparison of the first three years of the OBJ administration (May, 1999 - May 2007) with the first three years of GEJ (Feb. 2010 - Feb. 2013) will be very telling, and could help the GEJ administration to improve its performance.

Having looked at the offending statement of Mrs. Ezekwesili, it is only fair to look at the mistakes of Messrs Maku and Okupe. First, their reaction was appalling and "unstatesmanly". It was like using the proverbial harmer to attack a fly. In other words, the reaction is disproportionate to the error/mistakes of Mrs. Ezekwesili's offending statement. This was a situation where "silence would have been golden". What point were they trying to make? That she lied? To damage her earned respect and reputation? To say that the GEJ is not guilty of profligacy and "squandermania"? As I write, pictures of Nigeria women protesting against the N4billion First Ladies Mission House as a "wasteful allocation" have flooded the internet for the world to see. Their reaction has attracted more attention to the profligacy of not only the GEJ administration but also those of the state and local governments, which is not what they wanted but which is good!

Secondly, Messrs Maku and Okupe focused on only one errant sentence and ignored its context as well messages and unassailable truths of the lecture. In fact, one can say that they were intellectually dishonest. No person who reads the entire lecture will conclude that it was aimed at discrediting the current administration or comparing it that of OBJ under which Mrs. Ezekwesili served. She clearly stated the purpose of her lecture in the penultimate paragraph is a very poetic and inspiring manner, by stating that "I have spoken to you today to stir up your collective effective angst at the indignity of your inheritance. If I have succeeded in raising your determination to free our nation from the trap of oil, then my coming is worthy. If I have succeeded in helping you see how continuous education not more extraction of oil will help you outperform and take Nigeria up the economic development ladder, then my coming worthy. If I have succeeded in preparing you to embrace dignity of labor as your philosophy of life -never shunning legitimate vocation that helps you earn a living regardless of how lowly it might seem- then my coming is worthy…. If I have deposited in you a deep seethed contempt for poor governance, then my coming is worthy. …If I have moved you to decide that you will be one of those that will redefine and build a New Nigeria of our dream then is my coming worthy. If I have succeeded in inspiring a resolve within you to uphold from today a strong sense of personal responsibility for the political governance of Nigeria then my coming is worthy. Above all, if I have succeeded in getting you motivated and empowered enough to walk out of this hall seeing ready to walk and work as a part of the Turning Point Generation that courageously dares to restore the dignity of Nigeria then is my BEING truly worth it!". No one who reads the entire the lecture can say that she did not focus on this purpose, even if in doing so she stepped on the toes of the current and past administrations.

In conclusion, the reputation managers of the GEJ administration should learn to be tolerant of criticisms, especially from professionals like Mrs. Ezekwesili, even if they see them as opponents. More importantly, our governments and their representatives must develop a capacity to listen to, and take criticisms in good faith.

Chart 1

Chart 2