Nigeria Extractive Industry Transparency Initiative (NEITI) says all of the country’s oil savings since the inception of its savings history cannot fund 20% of 2017 budget.
In its second occasional paper series unveiled on Tuesday by Waziri Adio, its executive secretary, NEITI, said: “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 lowest natural resource revenue savings in the world. The balance in the three funds (0.5% stabilization fund, ECA and NSIA) is less than $3.9 billion, not enough to fund 20% of 2017’s federal budget.
“Nigeria’s $1.5 billion sovereign wealth fund is one of the lowest in the world, has one of the worst ratio to annual budget (10%), and one of the lowest SWF per capital ($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% of Nigeria’s 186million people) has a sovereign wealth fund worth $922 billion (which is 23,641% of the $3.9 billion balance in Nigeria’s three oil revenue funds).”
In simpler terms, if Nigeria’s oil savings were shared across the country, each citizen will have access to only $8, after over 60 years of oil exploration.
For countries like Norway, Kuwait and Botswana is at $185,000, $148,000 and $14,400 respectively.
Between 2005 and 2015, NEITI said $201.2 billion accrued to ECA but $204.7 billion was withdrawn from the ECA during same period, indicating that withdrawal was 102 percent of deposit.
To buck this prevailing dutch disease, NEITI recommends that the federal government and states government “should seek speedy resolution at the Supreme Court of the case on the constitutionality of remittances to the ECA and the NSIA.
“Initiate amendment of Section 162 of the 1999 Constitution (as amended), drawing on the political consensus that led to the creation of the ECA and the NSIA.
“Consolidate all oil revenue funds into the NSIA, which should be strengthened with appropriate guarantees on transparent and accountable governance to re-assure all stakeholders.
“Ensure constant savings whether oil prices are high or low; also provide for regular payouts from the investments proceeds to compensate benefi ciaries (the three tiers of government) for their sacrifice; and delink government expenditure from oil revenues and pursue prudent macro-economic policies.”