The Nigerian Extractive Industries Transparency Initiatives (NEITI) has condemned the 102 per cent outflows from the nation’s Excess Crude Account, The Guardian reports.
NEITI said in its Occasional Paper that between 2005 and 2015, the sum of $201.2 billion accrued to the excess crude account, but $204.7 billion was withdrawn from the same account, outflows were 102 per cent of inflows.
The agency is worried that the account is experiencing a similar fate like the Sovereign Wealth Fund, and the Stabilisation Fund, which have suffered all kinds of abuses over the years, thus undermining the objectives for which they were set up.
According to the agency, the NEITI Fiscal Allocation and Statutory Disbursement Audit report released in 2013, had revealed that while N109.7 billion was transferred into the Excess Crude Account for the period 2007 to 2011, the sum of N152.4 billion was withdrawn from the account. As at May 31, 2017, the account had an outstanding sum of N29.02 billion.
These indiscriminate withdrawals, the paper argued underscores the fact that Nigeria has no prudent and robust oil revenue savings scheme for purposes of generational equity.
NEITI therefore advised Nigeria to learn from resource-rich countries like Norway, which transfers all oil revenues into its Sovereign Wealth Fund, called the Government Pension Fund Global, and then proceeds to disburse only the amount needed to finance any deficit in its budget (Norway’s budget is based on non-oil revenue).
“From a modest ‘seed capital’ of less than $310 million in 1996, the total asset value of Norway’s Sovereign Wealth Fund is currently $922 billion,” it said.
The NEITI Occasional Paper therefore recommended that the $95 million currently in the Stabilisation Fund and the $2.3 billion in the Excess Crude Account should be transferred into the Sovereign Wealth Fund as investment savings.
It equally urged the government to ensure constant savings whether oil prices are high or low, and reiterated the need for regular payouts from the investments proceeds, as stipulated in the NSIA Act, to compensate beneficiaries especially the three tiers of government for their sacrifice in saving for the rainy day.
It further suggested that government should also delink its expenditure (budget) from oil revenues and pursue prudent macro-economic policies capable of shifting attention to the non-oil sectors.
NEITI urged the Federal Government and the states to speedily resolve the litigation before the Supreme Court to ensure that remittances are made into the fund without interruptions.
NEITI’s Executive Secretary, Waziri Adio, said the country spent more than what was saved from crude oil between 2005 and 2015.
He stated: “Between January 2005 and June 2015, the money that entered into the excess crude oil account as savings was $201.2 billion but the country spent $204.7 billion within the same period, which means that the country spent more than what it saved from oil from 2005 to 2015, and this amounts to no savings at all,” he said.
“Even if the country had saved 25 per cent of the $201.2 billion, by the time prices of oil started falling, we would have had about $50.3 billion in excess crude oil account alone.“We have been in the journey of saving our earnings for over 30 years now, but the problem we have is that we save and spend instead of saving and keeping.’’