A senior executive in one of the country’s leading new generation banks has faulted former President Olusegun Obasanjo that the present regime has squandered the nation’s external reserves.
The senior executive, who craved for anonymity, said a scrutiny of behind the scene figures will counter the assertion by Obasanjo on alleged declining foreign reserve.
Obasanjo had during the week alleged that the administration of President Goodluck Jonathan squandered over $45 billion of the country’s foreign reserve since coming into power.
He said this was one of the reasons it was easy for the naira to crash against other currencies when the price of crude went down in the international market.
The bank executive said Obasanjo leaving behind $43.17 billion in the foreign reserves was attributable to favourable market forces at play then as he operated in era of rising oil prices.
He said in the case of Jonathan, the reverse is the case.
Obasanjo became president in May 1999 at a time oil price was at $14.74 per barrel and left office with price at $68.75 per barrel.
The argument was put forward that the increase in oil price was more than 350 per cent within the period and this quickly buoyed efforts at increasing the country’s foreign reserves.
Jonathan, on his part, assumed office in May 2011 with oil prices at $117.18 per barrel and foreign reserves at $32 billion.
A steep fall in global oil prices kick started in mid-2014 from a peak $116 per barrel in January 2014 to about $51 per barrel in January 2015.
The situation was further compounded by rising bunkering and sabotage of oil facilities, the bank official explained.
“And in the face of these economic adversities, the country has managed to maintain a foreign reserve of about $34.4 billion, an improvement on what the incumbent met on ground,” he explained.
The position of the reserves will also necessitate taking into consideration massive economic pressure from spill over effect of international policies that include the end of Quantitative Easing by the US Federal Reserve, which implied that the monthly injection of about $8 billion into the global economy suddenly ended, subsisting sanctions against Russia for its alleged role in the ongoing crisis in Ukraine and continuous hurting from the sustained fall from a peak $116 per barrel to $58 for a country that relies on oil proceeds for over 95 per cent of its foreign reserves.
According to the banker: “These are the behind the scene issues that the former president was silent on when he chose to play politics with the issue of foreign reserve.”