Order PaperToday – The Nigeria Extractive Industries Transparency Initiatives (NEITI) has called for the transfer of all the country’s oil revenue savings into the sovereign wealth fund operated by the Nigerian Sovereign Investment Authority (NSIA).
In an ‘Occasional Paper’ titled ‘The Case for the Robust Savings Fund for Nigeria,’ NEITI explained that its position was informed by the transparency rating of the NISA by the global Sovereign Wealth Institute.
The NEITI paper recalled that the Nigerian Sovereign Wealth fund was set up in 2011 to build a saving based developed infrastructure and provide stabilization in times of economic stress for the country.
A statement by NEITI’s Director, Communications, Orji Ogbonnaya Orji, noted that while the NSIA made N192 billon return on its investment, the excess crude account and the Stabilization Fund recorded zero returns on investment
The statement expressed concerns that unlike the sovereign wealth fund, the excess crude account and stabilization funds have suffered all kinds of abuses over the years thus undermining the objectives for which they were set up.
It said that NEIT’s 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N109.7 billion was transferred into the excess crude account for the period of 2007 -2011, the sum of N152 billion was withdrawn from the account adding that as at May 31 , 2017 the account had an outstanding sum of N29.02 billion.
The paper further revealed that between 2005 and 2015, the sum of $201.2 billion accrued to the Excess Crude Account, but $204.7billion was withdrawn from the same account. In other words, outflows were 102% of inflows.
The NEITI Occasional paper noted that the relevant laws that prescribed the condition for disbursement of the Stabilization Fund and the Excess Crude Account did not specify how the funds should be withdrawn and allocated.
According to the Report, “the inherent pitfalls in this arrangement became glaring in a recent report by the National Economic Council Committee on the ECA, where it noted that the President of Nigeria, the Federation Accounts Allocation Committee (FAAC) and the CBN were listed at various times as approving authorities for withdrawals from the ECA”.
These indiscriminate withdrawals, the Paper argued, pointed to the fact that Nigeria has no prudent and robust oil revenue savings scheme for purposes of generational equity.
NEITI advised Nigeria to learn from resource-rich countries like Norway, noting that Norway 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.