The Nigerian Extractive Industries Transparency Initiative (NEITI) in its yearly publication tagged “Occasional Paper” issue 2 has accused the Nigerian past governments of squandering over $201 billion in oil revenue accrued to the country as an excess crude oil revenue contains in excess crude account ECA between the year 2005 and 2015.
According to the publication released to the press, between 2005 and 2015 the sum of $201.2billion accrued to the nation through the instrumentality of the Excess Crude Account and the total funds was shared among the three tiers of government in Nigeria notably, the federal, state and local governments. However, nothing tangible is evident in the country in terms of infrastructural and human development.
Nigeria Extractive Industries Transparency Initiative
The Federal Government of Nigeria created the ECA as a buffer purse to save oil sales above the annual budget benchmark price. The saved funds were meant to be reserved for the rainy day or to cushion the economy during a period of low oil prices. The funds were jointly held in an account by the federal government on behalf of other tiers of government.
It was established during the second term of President Obasanjo administration and existed throughout President Jonathan tenure. Countries dependent on revenues from natural resources are usually advised to save for the rainy day and for future generation. The account was set up, therefore, to insulate the country from severe price shocks. Between 2005 and 2015 when it operated effectively it acted as a stabilisation fund that helps the three levels of Nigerian governments close budget deficits caused by crude oil price violability. It also helps to fund domestic infrastructure investments.
However, within this crucial period also, the fund was grossly depleted through persistent and indiscriminate sharing to the three tiers of government usually as a result of pressure brought to bear on the federal government who is the fund’s custodian. It is on record that state government were always at loggerheads with the federal government over the fund as they insisted that it was illegal and that they never consented to the saving of their entitlements through the fund.
Wastages of Resources causes Poverty and Unemplyment
The Publication from NEITI brought to the fore various revelations which included that Nigeria has over 30 years’ experience in implementing different oil revenue funds. However, despite these lofty years of experience, the country cannot boast of a valuable and well-funded revenue accounts such as the ECA.
One of the ills affecting the country’s inability to save for future development includes contested the legality of the funds as well as the lack of political will. The publication also revealed that the nation has one of the lowest natural resources e.g crude oil revenue savings in the world. Nigeria’s three revenue savings fund is less than $3.9billion. This amount, unfortunately, cannot even fund 20% of 2017 budget.
Nigeria’s Sovereign Wealth Fund is one of the lowest in the world. In fact it only better than the wealth funds of war torn nations such as Iraq and Venezuela. This is awful when compared with the wealth fund of countries such as Norway a country of 5.2 million people with a Sovereign Wealth Fund of $922billion.The tendency for consuming and expending every revenue accrued to the country from crude oil sales by the various levels of government in Nigeria has made it impossible for the country to save for the rainy day. The worst malaise afflicting Nigeria is the curse of corruption and poor leadership in all strata of government. The corrupt habits of her leaders
The tendency for consuming and spending every revenue accrued to the country from crude oil sales by the various levels of government in Nigeria has made it impossible for the country to save for the rainy day. The worst malaise afflicting Nigeria is the curse of corruption and poor leadership in all strata of government. The corrupt habits of her leaders are the reason why so little is achieved in terms of human and infrastructural development even when so much money had been reported to have been spent in the last 12 years.