Nigeria’s saving in oil revenue can’t fund 2017 Budget- NEITI

Nigeria Extractive Industry Transparency Initiative (NEITI) has said that all the country’s oil savings since the inception of its savings history cannot fund 20% of 2017 budget.

This was disclosed by NEITI during its second occasional paper series unveiled in Abuja on Tuesday.

Speaking on the issue, NEITI’s executive secretary, Mr Waziri Adio, 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).”

The development indicates that 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.

But smaller countries like Norway, Kuwait and Botswana, each citizen is expected to get $185,000, $148,000 and $14,400 respectively.

NEITI also added that between 2005 and 2015, $201.2 billion accrued to ECA but $204.7 billion was withdrawn from the ECA during same period, indicating that withdrawal was 102 per cent of deposit.

It therefore 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.”