Managing Nigeria’s Revenues Prudently

Managing Nigeria’s Revenues Prudently

EMERGING details of Nigeria’s earnings from various sources are at variance with our status as one of the world’s poorest countries and our dilapidated infrastructure.

Managing Nigeria’s Revenues Prudently

A country where $90 billion in oil revenues flowed into in 2012 and which earned another N5 trillion in domestic taxes ought to have something tangible to show for it. Though not all the $90 billion would have accrued to the Federation Account as Joint Venture oil partners and others took some part, the figure shows that we still earned a tidy sum from oil and other sources. That such high earnings have been flowing into the coffers of the three tiers of government since 1999 strongly confirms the waste, corruption and ineptitude that have characterised public administration in Nigeria.

Data compiled by the Energy Information Administration of the United States Department of Energy showed that, of the $1.15 trillion earned from crude oil by the Organisation of Petroleum Exporting Countries member states in 2012, Nigeria received $90 billion, the fourth highest among the 12-member cartel. This represents a significant improvement over the $65 billion the EIA said accrued to Nigeria from crude oil sales in 2011. And just a week ago, our own Federal Inland Revenue Service reported that it collected about N5 trillion in 2012, an improvement over the N4.62 trillion it collected in 2011. Of the total collections in 2012, non-oil taxes brought in N1.8 trillion or 37 per cent, while oil taxes brought in around N3.2 trillion or 63.53 per cent, compared to N1.55 trillion from non-oil taxes and N3.07 trillion from oil in 2011.

These figures raise some cause for concern. Since under our federal system funds accruing to the Federation Account are distributed among the federal, state and local governments, complemented by other revenue streams available to each of them, one would have expected that, over the years, there would be massive infrastructural development and a reversal of our high poverty rates, using ever rising revenues.

Regrettably, report after report continues to place the country at the bottom rung of rankings in human development indices. A recent United Nations Development Programme study identifies Nigeria as one of the worst places on earth for a child to be born, a dubious honour she shares with Afghanistan, Pakistan, Somalia and Chad. Our infrastructure is appalling, with roads that have become death traps, dysfunctional and archaic railways, rundown and ill-equipped hospitals, chaotic ports, dilapidated dams and irrigation works and poor airports. Though oil-rich, we continue to import refined petroleum products as our four state-owned refineries are comatose and no new one, public or private, has been built since 1988.

What have the various governments done with revenues from oil and other sources? When, recently, a former minister, Oby Ezekwesili, raised posers on how the $45 billion foreign reserves and $22 billion in the contentious Excess Crude Oil Account left by the departing Olusegun Obasanjo administration in 2007 was spent, officials of the current Goodluck Jonathan government responded with brickbats at the former World Bank vice-president. But the government has refused to be accountable. It has failed to explain how, despite higher oil production of 2.2 – 2.4 million barrels per day and persistently high prices of over $100 per barrel, our reserves had just $43 billion and the ECA only $9.2 billion in December 2012.

The discovery of oil in many nations and increased oil output in the United States, where oil production rose to a 14-year high in 2012, demand that we quickly and wisely invest our oil revenues while we still have them, cut down on the excessive cost of governance by, for example, reducing the presidential aircraft fleet, number of aides and other luxuries, while also slaying the dragon of corruption.

President Jonathan must lead the way. The National Assembly must cut down on the obscene allowances it has awarded to itself, exercise effective oversight over the Executive and insist on accountability from all agencies of the government.

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