Remi Babalola: I Left Jonathan’s Govt Because Of Financial Mismanagement

A former Minister of State for Finance, Mr. Remi Babalola, on Tuesday explained why he left the cabinet of former President Goodluck Jonathan.

Babalola, in a paper presented at the 45th Annual Accountants Conference and 50th Anniversary celebration of the Institute of Chartered Accountants of Nigeria described the lack of transparency in the oil sector under Jonathan as alarming.

Babalola, who chaired the Federation Account Allocation Committee between 2007 and 2010, said he left the previous administration owing to mismanagement of the nation’s resources.

In his paper titled “Achieving the Nigeria of Our Dream: The Responsibility of Professional Accountants,” he urged the administration of President Muhammadu Buhari to confront the endemic corruption whole-heartedly in order to resolve the country’s mal-functionality.

He said, “Our culture of impunity is the bane of the entrenched corruption in our society. The value destruction and corruption undermine any economic development or social change we may aspire for our nation.

“Mismanagement and misallocation of resources, coupled with an unprecedented level of corruption have been at their highest in the history of our nation in the last six years.

“Performance or success in public space was measured by the conversion rate of public funds into private accounts. It looks as if democracy has been substituted with kleptocracy.”

He recalled, drawing the attention of the nation to the parlous state of the Nigeria National Petroluem Corporation’s accounts five years ago, adding that many sympathisers feared for his life as it amounted to what he described as “stepping on a snake”.

He said, “I was unperturbed and unruffled but ready and willing to take a walk as a statement of intent that if they wanted to continue in that decadence of resource mismanagement, I was not going to be a part of it.”

The former minister decried the absence of transparency in the oil sector and the NNPC, regretting that the corporation’s core competence had been reduced to importing refined products and paying subsidies to bogus companies.

He wondered why it was difficult for the NNPC to compete with the likes of PETROBRAS of Brazil and PETRONAS of Malaysia.

“It is counter intuitive that we deliberately ensure that receipts and proceeds into the nation’s treasury are not accounted for.

“Such has been our contempt for process transparency that an incumbent governor of an operationally and legally independent central bank, who publicly alerted the nation, was forced out of a fixed tenure.

“Of course given its systemic importance to the economy, there is no justification for the state-owned oil sector monopoly (the NNPC) not to publicly publish its audited accounts and even quarterly accounts like all listed companies on the stock exchange,” he said.

Babalola, who is a Fellow of the Institute of Chartered Accountants of Nigeria, recommended public asset declaration for every principal officer in the executive arm of government from the president to the ministers, permanent secretaries, director-generals, and heads of parastatals and agencies.

The public asset declaration, according to him, had become necessary to curb the alarming rate of corruption in the country.

He also urged the Federal Government to ensure that the NNPC published its audited accounts quarterly like all listed companies on the Nigerian Stock Exchange.

On the Federal Government’s bailout programmes for the states, the former finance minister advised that it should be done in line with Section 41 of the Fiscal Responsibility Act.

“As good a gesture as the bailout is, it may lead to moral hazard as the states continue with financial recklessness leading to financial insolvency. Why are we borrowing to pay salaries in stark violation of Section 41 of the Fiscal Responsibility Act?” he queried.

He added, “Rescuing the states is a necessary gesture but how and on what terms? Each state should have been treated as an entity with peculiar conditionalities.

“A body like ICAN and other professional bodies should have been brought in as independent platform to assess and recommend terms and conditions for each state just like the situation in Greece.”
Babalola called for a higher level of advocacy in financial prudence and disclosure by professional accountants.

He charged professional accountants to display discipline, knowledge, ethics and integrity at all times.

“As professionals, we should be able to establish causal relationships in observed phenomena.

“The highlighted causes of the financial crisis and corporate governance scandals cannot but be traced directly or indirectly to professional accountants and financial reporting.”