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Experts worried about no savings amid rising crude prices

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An oil and gas governance consultant, Henry Adigun, has expressed worry over Nigeria’s savings culture, saying despite the rise in oil prices in recent times, nothing has been put aside either to the Excess Crude Account (ECA) or the Nigerian Sovereign Investment Authority (NSIA).

According to him, less than $1.8 billion and barely $1.25 billion are left in the ECA and NSIA accounts, respectively. These figures matching the country’s population, he said, were peanuts.

Adigun at a dialogue series on the challenges of the 21st Century in Nigeria organised by the Centre for Public Policy Alternatives (CPPA) and supported by the Ford Foundation in Lagos, noted that all leaders had done was to consume oil resources without thinking about the future.

He cited how countries like Norway had saved over a trillion dollar on oil revenues, adding that: “Dubia funds are over $600 billion and Kuwait’s fund is about $495 billion, and Nigeria is all these countries put together.”

The oil and gas consultant stressed the need to force leaders from using oil revenues to address for recurrent expenditure, saying such approach was not logical.

He explained that of every dollar Nigeria earns, 75 cents goes to recurrent expenditure, which raises the question on why the country should keep high deficits, which is causing the nation a lot of the problems it is facing. “The arguments need to change to why we are spending so much on consumption,” he stressed.

The increased prices of crude oil, according to him, has a negative effect on the landing cost of petrol, which has caused daily subsidy cost to hit about N1.9 billion. This, he noted, translated to the fact that subsidy budget is bigger than that of every other capital expenditure, including health, education, and transportation, and more than what is being put to savings.

Speaking on the main vein of the series which is about drivers of inequality, Melvin Ayogu of CPPA observed that a lot of countries like Australia, Canada, and the United States, had converted their natural resources -both in private and public domains- for economic benefits. So, why does it have to be a curse for African countries, he enquired.

The professor of Economics explained that most African countries with extractive industries tend to oppress their citizens while those with no natural resources, do more with less.

The situation, he stated, had impoverish the citizenry because the cabal that takes over government use the nation’s wealth  as an ammunition to defraud the society.

This, he said, had made it necessary for civil societies to gather and question the situation, adding that: “ Civil engagement is the only way to call public institutions to order.”

The drivers of inequality caused by government, Adigun noted, had caused a shrink in the middle class in the country, causing the economy to contract last quarter with further contractions forecast for this quarter.


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