By Yunus Yusuf
Lagos – An NGO, Shehu Musa Yar’ Adua Foundation, has urged the Federal Government to ensure that all tiers of government meet their financial obligations toward boosting the Sovereign Wealth Fund (SWF) account.
Mr Amara Nwankpa, Director, Public Policy Initiative of the foundation, made the assertion on Monday after a roundtable on “Savings and Stabilisation Mechanism for Nigeria” in Lagos.
Nwankpa said that was necessary to improve the country’s economic growth.
He said that to achieve a boost in the fund, the Excess Crude Account of 0.5 per cent stabilisation account could be collapsed into the stabilisation account of the SWF.
He said the Federal Government needed to reform its public finance management to translate substantial oil wealth into equitable economic benefits.
Nwankpa said that in spite of earnings over one trillion dollars from oil since 1970, more Nigerians were still living in poverty.
Quoting the Brookings Institute, he said that an approximated 83.6 million people in Nigeria representing 43 per cent live in abject poverty.
He said countries that depended on revenues from natural resources to finance their budgets were characteristically prone to boom-and-bust cycles.
Nwankpa said that over reliance on oil had reduced the capacity of government to provide socio-economic benefits to citizens.
He said that oil was the dominant source of Nigerian export and foreign exchange earnings as well as the largest contributor to government’s revenue.
According to him, the economic reforms established by the Olusegun Obasanjo administration (2003-2007) represented the first attempt to break the pattern through the innovation of a savings mechanism known as the Excess Crude Account (ECA).
He said that attempts had been made to institutionalise the ECA in the fiscal responsibility Act of 2007 but state governors claimed it contradicted the 1999 constitution.
“At current levels of production, reserves are projected to last for another 37 years. This increases the urgency of the need to save for future generations.
“In spite of oil revenue earnings, 60 per cent of the population still live below the poverty line.
“Corruption, mismanagement of oil reserves and lack of diversification in the export sector have slowed economic growth and contributed to high poverty levels.
“In spite of the substantial revenues that have accrued to state and local governments, states are still burdened by debts from outstanding salaries owed to workers and huge contractor debts,” Nwankpa said.