Letter to President Goodluck Jonathan

Dr. Goodluck Ebele Jonathan, GCFR
President, Federal Republic of Nigeria
State House
Aso Drive
Abuja

Mr. President,

ON THE STATE OF THE NATION

We write respectfully to demand your constitutional authority and moral responsibility in respect of alarming portends for our great and beloved Nigeria.

We are a cross section of Nigerians, privileged to be in various sectors of our economy, professions and society, who are deeply concerned about signs that our beloved nation is descending into anarchy and hopelessness, compounded by a palpable threat that the nation itself will become insolvent. We make an earnest call on you Mr. President to swiftly and effectively deploy the enormous power of your office as well as the immense national resources available to you to arrest the national drift and despondency before it becomes irreversible.

In this past year of your presidency, Nigeria has witnessed an unending spate of bombings and killings of innocent citizens; reckless and unchecked wholesale looting of our national treasury and natural resources on a scale largely unknown before; a growing national debt without commensurate development and progress and above all a signal failure from the national government to outline a vision for rebirth and progress, and a floundering without direction in critical government functions and agencies. The ship of state under your esteemed captainship seems to be dangerously adrift.

Please permit us to highlight below key elements of this phenomenon.

Bombing and Killing of the Innocent

Boko Haram began its campaign in 2009 of ‘Bombings and Killing of the Innocent’ and defenseless citizens in places such as Borno, Bauchi, Kano, Yobe, Kaduna, Adamawa and Abuja. The accurate number and identities of those maimed and killed in these attacks have remained unknown. Estimates by civil society groups rendering support services to the victims suggest that the number of those that died may be much more than official figures suggest, including thousands who may have been maimed, displaced or hiding from attacks in make-shift camps without adequate food and vital supplies.

While there has been no respite to this campaign, which undermines the sovereign character and authority of the Nigerian state itself, there is at the same time, no discernible coherence in the response of our government to these atrocities and the collapse of public safety within our territory.

Mr. President, the urgent question to which your citizens demand your answer is: When is our national government going to formulate and articulate a rational, effective and progressive approach to a national crisis and when will we see decisive action within the law to tackle this growing menace and halt the slide into anarchy?

National Debt and Sovereign Solvency

Since paying off the country’s debt to the Paris debt club in 2006, Nigeria began to borrow massively and there is little development in any sector to show for the scale of borrowing. So far, Nigeria’s debt profile has risen to US$39.72 billion (about N6.02 trillion) with external debt put at US$5.398 billion while domestic debt is N5.21 trillion. This debt profile is more than the Federal Government’s yearly budget as its external component translates to 2.76 percent of Gross Domestic Product, GDP, and its domestic component translates to 17.53 percent of the GDP. This debt profile is unsustainable and deeply troubling. It is doubtful that we have the capacity to repay the money, considering our annual revenue profile and the profligate corruption and leakages in all sectors of government.

Between 2010 and 2011, N2.8 trillion were scammed from Nigeria’s treasury and allegedly spent on fuel subsidies, from an annual budget of N240B. The response of our national government was to attempt to remove the subsidy without any satisfactory explanation to the people of the reason for the over 100% increase resulting to a complete shutdown of the country for 2 weeks in January 2012. This led to the “fuel subsidy scam probe” by an ad hoc committee of the House of Representatives. The probe revealed mindboggling corruption in the oil industry involving persons and groups with connection to your government.

Mr. President, it is now several months since the report was adopted and sent to you for implementation. There has been no acknowledgment of this report from our national government and the perpetrators still walk the streets with blatant impunity. As if that was not enough, media reports indicate that the N888B budgeted for 2012 subsidy (despite the increase of the pump price of fuel from N65 to N97) is almost exhausted and a further N624B is being sought and will likely be successfully appropriated by supplementary budget. When you add to this national bleeding, the N155B scandal of Malabo oil and the N273B stolen from the Pension Fund, you begin to appreciate the very alarming threat of an imminent sovereign insolvency, which is frightening to any well meaning Nigerian.

Finally as we write Mr. President, Nigeria is losing about 20 percent of its oil production to theft involving high profile people in and out of government, which has led to a significant shortfall in production target. The unit cost of production per barrel, which gets to the terminal, is also going up and projected to rise by about 500% to about $10 from about a 2006 baseline of $2. Presently,

it’s reported to be costing about $7-$8 per barrel. It is therefore a multi-pronged challenge: prices are off the cliff, production costs are up a steep gradient; production itself is shut-in and unable to get to terminal and new investments can’t be made. The price of oil is now about $80, which is about the budgeting benchmark. This effectively means that the slush fund called Excess Crude Account has been wiped out. As it is, Nigeria needs to borrow to cover all capital expenditure (CAPEX) and part of the recurrent for this year. So, this is the context in which your government is seeking the syndicated facility of $7.9 billion which will take our dollar denominated debt to possibly over $13B without the earnings to support it?

Mr. President, this scenario threatens seriously our credit rating and if, as expected, yields begin to go up on our sovereign paper, our nation will be looking not at a liquidity problem (which is regular) but at a solvency issue, which is of a different and potentially cataclysmic order. It should be underlined that we are going down this thorny and uncharted path apparently because of incapacity, grand corruption and misplaced priorities at various levels of government. If the citizens of this country are going to be committed to this level of debt, the least we expect is that your government takes the fight against corruption more seriously than just rhetoric.

Our Demand

Mr. President, we demand firmly but respectfully, that you personally exercise the authority and responsibility of our presidency to arrest this drift in the country and lift the pall of gloom that now hangs over our future.

We require you Sir, to act immediately to address the security situation in the country, implement the report of the Oil Subsidy Scam; halt the large-scale theft of crude oil in the Niger Delta and bring swiftly and publicly to justice those involved in the pension scam and Malabo oil scandal.

Respectfully Sir, at a time of palpable national crisis, a president cannot be silent. It is exactly at such a time that the nation is entitled to moral and legal leadership and above all accountability. It is at such a historic moment that the highest test of national and personal character falls like a mantle before you. If you will not or cannot pick up this mantle, then your presidency is entirely void of its substance and legitimacy.

Your citizens demand that you be president that they elected or you be nothing to us.

Respectfully yours,
N-Katalyst:
originally posted  here http://n-katalyst.com/2012/07/10/letter-to-the-president