Former Minister of State Petroleum Resources and Chairman of the Nigeria Natural Resource Charter (NNRC) Expert Advisory Panel, Odein Ajumogobia has said Nigeria made no significant savings from the conservative estimate of over one trillion dollars in oil revenues accrued to the country.
This was disclosed at a roundtable discussion on the savings and stabilisation for Nigeria organised by the Oil Revenue Tracking Initiative of the Shehu Musa Yar’Adua Foundation held in Lagos. Ajumogobia said Nigeria has no savings nor has translated the earnings to productive capital through human development, physical infrastructure and institution building despite an estimated trillion dollars in oil revenue.
He stressed that Nigeria requires improved legal policy and advocacy frameworks for the Excess Crude Account and other Stabilisation Funds to be more effective and beneficial to citizens.
According to him, Appropriations from the Excess Crude Account (ECA) have previously gone through the FAAC, saying that withdrawals from ECA in the past three years are not disclosed to the FAAC, even when properly documented elsewhere. He observed that the ECA lacks transparency and has an unclear methodology for withdrawals and distributions manifested in unilateral withdrawals by successive governments.
“Nigeria’s ECA has been ranked the most poorly governed sovereign wealth fund among 33 resourcerich countries, according to a 2017 report by the Natural Resource Governance Institute.
“Nigeria was placed in the last position along with the Qatari Investment Authority as a country whose government discloses almost none of the rules or practices governing deposits, withdrawals or investment of the ECA.
“The huge revenue from oil has not translated to real improvement in the welfare of the citizens. Sixty per cent of the population, according to the National Bureau of Statistics, still lives below the poverty line. Corruption, mismanagement of oil reserves and lack of diversification in the export sector all have an important role to play in our slow economic growth and high poverty levels,” he said.
In recommending possible solutions to the problem, Ajumogobia said ECA and 0.5% stabilisation account should be collapsed into the Sovereign Wealth Fund. He added that Civil Society Organisations should generate grassroots political pressure regarding the importance and benefits of the stabilisation fund to the nation.
The former minister emphasised that the Federal Ministry of Finance should create a real-time platform to provide figures on the ECA rather than the conflicting accounts from the Ministry of Finance and Office of the Accountant General.
In her own submission, former Vice President (Africa Region) of the World Bank and Director of Africa Economic Development Policy Initiative (AEDPI), Dr. Obiageli Ezekwesili recommended that there should be movement of relevant clauses necessary to empower automatic funding of the Nigerian Sovereign Investment Authority (NSIA) into the Nigerian Constitution and adopting an amendment of the Current Provisions of the Constitution.
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