Nigeria Extractive Industries Transparency Initiative (NEITI),has expressed concern that Nigeria posts the least record in oil revenue savings, among resource based countries, as it is currently advocating a robust policy to save portion of oil and gas revenue for the rainy day and for inter generational equity.
NEITI therefore suggested urgent measures to be taken by all tiers of government to include the immediate transfer of all revenue savings in the stabilisation fund and the Excess Crude Account into the Nigeria Sovereign Wealth Fund.
But Oil and Gas industry experts said the country could not have been expected to have good savings when the governors are always interested in sharing whatever the countries earns as revenue to the detriment of future generations.
NEITI insists that recommendations for a Nigeria Sovereign Wealth Fund Model is stemmed from the fact that of its more transparent model,it is well structured and having a better clarity for some re-investments to grow the wealth. He notes that NSWF scores 90% in terms of transparency in mangement structure in continental ratings.
Waziri Adio,the Executive Secretary of NEITI said if Nigeria has imbibed the culture of savings overtime, it would had some buffer to shielf it from the perennial economic recession that it is presently suffering from.
The Executive Secretary during a presentation to Newsmen titled:”The case for a robust oil savings fund for Nigeria”,lamented that inspite of the benefits and the huge revenues that have accrued from oil and gas over the years,Nigeria has one of the lowest resource savings in the world.
“Take the volatility of the oil price and know you don’t have control over it.Take the exhaustion of the oil resources which is already known fact that in the next 38 years we could cease to exist.But what we do with the money we are getting now from the oil is what we have control over,and we must do it well”Adio said.
He suggested Norway,as a key country experience where Nigeria could learn from,whom he said commenced the culture of savings well before it discovered oil.
“Norway, a country of 5.2 million people has a sovereign wealth fund worth $922 billion,Chile $24 billion,Angola $4.6 billion and Botswana $5.7 billion.Others are Russia $89.9 billion and Kuwait $592 billion.
Dirran Fawibe, the chairman and chief executive officer of International Energy Service told BusinessDay the situation is not unexpected because the country eats all that she earns as revenues.
He said the governors are always agitating that the revenue that comes to the federation account must be shared without thinking of the raining day.
All the efforts of Okonjo Iweala , the former minister for Finance to make the governors see reasons for the country to have structured Sovereign Wealth Fund was rebuffed as the member of the National assembly don’t feel concerned about saving for the future.
Another chief executive of an oil company but does not want his name mentioned said what did you expect from corrupt governments that have governed this country over the years. “Most of the past governments that have ruled this country are aware of how some of the resourced based countries such as Norway, Saudi Arabia have made good savings for their future generations from oil revenues. But they turned deaf ears to suggestions from experts and shared everything each time”, he said
Rotimi Amaechi, the current Minister of Transport said that when he was the chairman of the Nigerian Governors Forum, the governors demanded the sharing of money from the Excess Crude Account (ECA) under the last federal government because it was not properly managed
He explained further: “In 2009, we had an economic crisis so President Yar’adua put $1billion in the economy so no one felt the crisis. I can’t remember what was left in that account, the excess crude account. “During Goodluck Jonathan, every month when the governors went for the economic council meeting, the amount in the account kept dropping. If we asked about what happened to the money, the response we got was that the president approved for it to be spent. “So we said can we please share this money because the rate at which it was going, the president would have continually approved $1billion to spend and we won’t know what we are spending for and they won’t give us an account.
Nigeria it would be noted currently has three oil savings fund.They are Sovereign Wealth Fund with $1.5bn,the Excess Crude Account with $2.3 bn and the stabilisation fund with N29.02bn($95M).
Suggesting way forward in his presentation,the Executive Secretary recommended that government should,”Initiate amendment to sector 162 of the constitution to accomodate the welfare of future generations.The constitutional option is necessary to ensure that the rules are not subjected to political fluidity’.The negotiations need to be complemented with appropriate guarantees for transparent and accountable governance of the funds to reasures stakeholders especially at the sub-national level”
He also recommend in his presentations the need to delink government expenditure from oil revenues to support policy initiatives that pursues prudent macro-economic policies,better economic and social environment for the next generation.This is in addition to ensuring that there is constant savings whether oil prices are high or low and provide regular payouts from the returns on investments of the funds to compensate beneficiaries (the three tiers of government)for their sacrifice.
Olusola Bello and HARRISON EDEH, ABUJA
