by Ifeanyi Onuba
The Coordinating Minister for the economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, has said that without the diversification of Nigeria’s revenue from oil, the economy will soon collapse.
The minister said this on Thursday during a forum with civil societies’ organisation in Abuja.
The forum was attended by top government functionaries such as the Minister of State for Health, Dr. Mohammed Pate; the director-general of the Budget Office; the immediate Chairman, Federal Inland Revenue Service, Mrs. Ifueko Omogui-Okauru, and the Chairman, Nigerian Electricity Regulatory Commission, Dr. Sam Amadi.
The minister, who said there was need for the complete removal of fuel subsidy, argued that since the policy had failed in other major oil producing countries, its stoppage would enable the government to develop key sectors of the economy.
For instance, she noted that the crisis in Europe and the United States where about 60 per cent of the country’s crude oil was sold had made it difficult for government to depend solely on oil revenue.
Okonjo-Iweala, while giving an overview of the current reforms of the Federal Government said, “This country depends on a product that is sold internationally and whatever happens there affects us. That’s why we need to have savings.
“Sixty per cent of our oil is sold to US and Europe and these countries are facing big economic problems. For instance, the US has an unemployment rate of eight per cent; Spain 24 per cent; and India, 9.9 per cent.
“So, if 60 per cent of our oil is sold to them, then, we have a problem and any country that has great volatility such as ours will always have problem and this will lead to crisis in the economy.”
She also said, “The ECA account and its successor, the sovereign wealth fund, are very important but we have the state governors saying no we will only allow $1bn. In fact, we manage to get that and now they said its illegal and so the country is not able to save in the ECA and we have left today in that account only about $3.6bn.
“What that means is that should the oil price drop today, we have no cushion because $3.6bn for this economy is not enough to take us to any length of time and that was what I told them at the Governors’ Forum during the National Economic Council meeting the last time.
“So, part of the reform agenda is to continue to push for the diversification of the economy and that is what we are out to achieve.”
Oil revenue, according to findings, constitutes the bulk of the country’s gross revenue, accounting for about 90 per cent of the total amount paid into the federation account.
The inability of the Nigerian National Petroleum Corporation to remit oil proceeds generated in March had led to the postponement of the monthly allocation from the initial April 12 and 13 dates to April 19 and 20.
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