The Nigeria Extractive Industries Transparency Initiative (NEITI) has called for the transfer of all the country’s oil revenue savings into the Nigerian Sovereign Investment Authority (NSIA).
NEITI’s directors of communications, Orji Ogbonnaya Orji, made the call in a statement on Wednesday in Abuja, citing the Initiative’s position in its paper entitled ‘The case for a robust oil savings fund for Nigeria’.
Orji said that NSIA had been scored nine out of 10 on the Sovereign Wealth Institute’s transparency index, the highest score by any African Sovereign Wealth Fund.
According to him, the NSIA Act 2011 is an improvement on the legislations for the excess crude account (ECA) and the 0.5 per cent Stabilisation Fund in terms of comprehensiveness, transparency and accountability.
He said that the ECA and the 0.5 per cent stabilisation fund were established each by a single clause in fiscal legislations with no specific governance, transparency or accountability requirements
“The NSIA is a comprehensive legislation with extensive corporate governance and management provisions in line with global principles and best practices,” he said.
Orji said that while the NSIA made N192 billion return on its investments, the ECA and the 0.5 per cent Stablisation Fund recorded zero returns on investment.
He expressed concern that unlike the Sovereign Wealth Fund, the ECA and the Stabilisation Funds had suffered all kinds of abuses over the years thus undermining the objectives for which they were set up.
He said that the NEITI Fiscal Allocation and Statutory Disbursement Audit report released in 2013 had revealed that while N109.7 billion was transferred into the ECA for the period 2007 to 2011.
“The sum of N152.4 billion was withdrawn from the account and as at May 31, the account had an outstanding sum of N29.02 billion.
“The paper further revealed that between 2005 and 2015, 201.2 billion dollars accrued to the ECA, but 204.7billion dollars was withdrawn from the same account. In other words, outflows were 102 per cent of inflows.’’
NEITI noted that the relevant laws that prescribed the condition for disbursement of the 0.5 per cent Stabilisation Fund and the ECA did not specify how the funds should be withdrawn and allocated.
NIETI said: “The inherent pitfalls in this arrangement became glaring in a recent report by the National Economic Council Committee on the ECA.’’
“In the report, the President of Nigeria, the Federation Accounts Allocation Committee (FAAC) and the CBN were listed at various times as approving authorities for withdrawals from the ECA.
“These indiscriminate withdrawals, showed that Nigeria had no prudent and robust oil revenue savings scheme for purposes of generational equity.’’
Orji explained that the fund started off with a seed capital of one billion dollars in 2012.
He said that in November 2015 and March 2017, the government transferred additional 500 million dollars into the fund bringing the total savings to 1.5 billion dollars.
NEITI, however, observed that while these savings were significantly below projected transfers to the NSIA, it was satisfied that “the funds under the management of the authority have not been depleted unlike the other oil savings accounts – the Excess Crude Account (ECA) and 0.5 per cent Stabilisation Fund.’’
Orji advised Nigeria to learn from resource-rich country like Norway, adding that Norway transfers all oil revenues into its Sovereign Wealth Fund known as the Government Pension Fund Global.
