Nigeria Made No Savings From $1trn in Oil Revenue, says Ajumogobia

By Segun Kasali

The Former Minister of Petroleum Resources and Chairman of the NNRC Expert Advisory Panel, Odein Ajumogobia has said that Nigeria made no significant savings from the conservative estimate of over one trillion dollars in oil revenue.

This was disclosed at a roundtable discussion on the savings and stabilization for Nigeria organized by the Shehu Musa Yar’Adua Foundation.

Ajumogobia said that Nigeria has no savings nor have translated the earnings to productive capital through human development, physical infrastructure and institution building despite an estimated trillion plus dollars in oil revenue.

According to him, Appropriations from the Excess Crude Account (ECA) have previously gone through the FAAC, adding that in the past three years withdrawals from the ECA are not disclosed to the FAAC even when properly documented elsewhere.

He observed that the ECA lacks transparency and has an unclear methodology for withdrawals and distributions manifested in unilateral withdrawals by successive governments.

“Nigeria’s ECA has been ranked the most poorly governed sovereign wealth fund among 33 resource-rich countries, according to a 2017 report by the Natural Resource Governance Institute.”

“Nigeria was placed in the last position along with the Qatari Investment Authority as a country whose government discloses almost none of the rules or practices governing deposits, withdrawals or investment of the ECA.”

“The huge revenue from oil has not translated to real improvement in the welfare of citizen. Sixty percent of the population, according to the National Bureau of Statistics, still lives below the poverty line. Corruption, mismanagement of oil reserves and lack of diversification in the export sector all have an important role to play in our slow economic growth and high poverty levels.”

In recommending possible solutions to the problem, Ajumogobia observed that the ECA and 0.5% stabilisation account should be collapsed into the Sovereign Wealth Fund.

He added that Civil Society Organisations should generate grassroots political pressure regarding the importance and benefits of the stabilisation fund to the nation.

The Former Minister emphasized that the Federal Ministry of Finance should create a real-time platform to provide figures on the ECA rather than the conflicting accounts from the Ministry of Finance and Office of Accountant General.

The Key participants included The Former Vice President (Africa Region) of the World Bank and Director of Africa Economic Development Policy Initiative (AEDPI), Dr. Obiageli Ezekwesili; Former Executive Director of the Department for Petroleum Resources, Mr Austin Olorunsola; A Member of the Central Bank Monetary Policy Board and Member of the NNRC Expert Panel. Also in attendance were other representatives from Ministries, Departments and Agencies, Civil Society and National Assembly.

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