- In 10 years, Nigeria accumulated a total of $201.2billion (about N734trillion) in Excess Crude Account
- The money was reportedly squandered within the same period
- This was revealed by the Nigeria Extractive Industries Transparency Initiative (NEITI)
A report by The Punch indicates that in 10 years, Nigeria accumulated a total of $201.2bn (about N734trillion) in Excess Crude Account, which it squandered within the same period.
This was revealed by NEITI in its Occasional Paper (Issue 2) released in Abuja on Monday, August 14.
The publication noted that despite current efforts to pull Nigeria out of recession, the economy remained vulnerable to one of the conditions that created the problem in the first place – lack of adequate and prudently managed savings in a period of plenty.
It further revealed that between 2005 and 2015, $201.2bn accrued to the nation through the instrumentality of the ECA, and the entire amount was shared among the three tiers of government within the period.
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According to NEITI, to overcome commodity price volatility and depletion of non-renewable resources, countries dependent on revenues from natural resources are usually advised to save for the rainy day and for the future generation.
Part of the publication read: “Nigeria has about three decades of experience in implementing different oil revenue funds. However, attempts at oil revenue savings have been plagued by contested legal frameworks, governance issues and inadequate political will.
“Nigeria has one of the lowest natural resources revenue savings in the world. The balance in the three funds (0.5 per cent stabilisation fund, ECA and NSIA) is less than $3.9bn, not enough to fund 20 per cent of 2017 federal budget.
“Nigeria’s $1.5bn Sovereign Wealth Fund is one of the lowest in the world; it has one of the worst ratio to annual budget (10 per cent), and one of the lowest SWF per capita ($8), better only than war-torn Iraq and crisis-hit Venezuela but not by much.
“In contrast, Norway, a country of 5.2 million people (2.8 per cent of Nigeria’s 186 million people) has a Sovereign Wealth Fund worth $922bn (which is 23,641 per cent of the $3.9bn balance in Nigeria’s three oil revenue funds).”
The conclusion is that Nigeria has no prudent and robust oil revenue savings scheme that can tie it over expected volatility of oil prices and eventual depletion of its reserves in 38 years.
The ECA was created by the federal government to save oil sales above the annual budget benchmark price. Within the period, most state governments argued that the funds were illegal and opted that the money should be shared to meet immediate challenges.
Although Nigeria has created instruments for such savings such as the ECA and the Sovereign Wealth Fund, it has hardly retained much as leaders especially at the sub-national level have always argued that the rainy day is already here.
Meanwhile, the chairman House committee on aids, loans and debt management, Honourable Adeyinka Ajayi has given an ultimatum to states wishing to take loans from foreign banks.
Honourable Ajayi tasked the states to submit the necessary documents and carry out all necessary house cleanings or forget their loan applications.
The committee on Wednesday, July 26 listened to the defense from states like; Abia, Enugu and Kano states and found that the three states intend to take loan facilities from either the Islamic Development Bank (IDB), the African Development Bank and the French Development Agency (FDA).
Watch the NAIJ.com TV video report on how Nigerian youths protest made the National Assembly pass the 'Not Too Young To Run' bill.