SPENDTHRIFT! Nigeria blows $1tn in 37years with little to show

The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that Nigeria has only been able to save $3.9 billion from sales of crude oil worth $1.09 since 1980.

The country, within the 37 years period has expended well over one trillion, eighty-eight billion, seven hundred million with little to show for it in terms of socio-infrastructural or economic development.

Despite the resources earned from crude oil, Nigeria has the third highest number of poor people in the world, after China and India. About 70 million Nigerians are reportedly living on less than one US Dollar a day.

Low human development level, social conflicts and enviromental degradation are just a few problems which characterize the current state of development in Nigeria.

In terms of dollar value worth of crude oil export, Nigeria in 2016 earned more than, Angola, Norway, Mexico and Qatar.
NEITI’s Executive Secretary Waziri Adio who gave the figure on Tuesday in Abuja, at the presentation of its occasional paper, titled: “The case for a robust oil savings fund for Nigeria”, noted that Nigeria has a current balance of $3.9billion as at June 2017 in its three savings funds.

He said, “Nigeria currently has three oil savings funds. They are the Sovereign Wealth Fund with $1.5billion, the Excess Crude Account $2.3billion, and the Stabilisation Funds with N29.02 billion ($95million)”.

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While stressing the inability of Nigeria to save, Asio lamented that “In the last 40 years of oil production, Nigeria has extracted about 31billion barrel of its oil reserves”, even as he called on the Federal Government to consolidate oil trust funds into the Nigeria Sovereign Wealth Fund to yield return on investment.

According to him, with $3.9 billion in Nigeria’s oil savings funds, accounting for 16 per cent of the N7.44 trillion of the federal budget, the country’s economy is highly vulnerable and unprotected.

According to the NEITI boss, “when people are talking about how we ended in this trouble and how we will get out of it, little attention is paid to savings – that we didn’t have enough savings, when the prices were high, we thought it would be high forever living in Fools’ paradise and when the prices fell, we didn’t have enough to fall back on.”

He harped on the need for Nigeria to move away from its present state of “spend it all” or “save and spend attitude” to real savings culture.

Adio added that most countries that established one or more oil revenue funds have accumulated huge savings in their stabilisation accounts, but noted, that, Nigeria’s ECA has been dogged by questions about its constitutionality, which have hindered regular remittances into the accounts.

Adio went down memory lane to recall that it was not the first time Nigeria will be experiencing economic downturn. Nigeria, he recalled, faced a similar challenge in 2008/2009, but overcame it without having to borrow since the country had an excess of $60 billion in reserves.

In his words: “We were one of the very few countries that didn’t have to go and borrow, and we didn’t have to go through what we are going through now and this happened in 2008/2009 and by the time the prices started rising again and selling above $100, we were just blowing it.”

 

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