Research Expert: In 22 Years, FG, States, LGs Earned N101tn from Oil Sector Alone

Ademola Babalola in Ibadan
For 22 years, the federal, states and local governments shared N101:51trillion from oil revenues in Nigeria, a research professor at the Centre for Econometrics and Allied Research (CEAR), Adeola Adenikinju, has disclosed.

Adenikinju, also a Director, Centre for Petroleum, Energy Economics and Law (CPEEL), University of Ibadan, made the disclosure at the 2016/2017 annual inaugural lecture of the University of Ibadan.

In the lecture entitled: ‘Energy and Nigeria’s Economic Development: A troubled but indispensable marriage,’ Adenikinju who traced the history of Nigeria’s oil wealth with the nation’s problem famously reduced to ‘how to spend the money’ because of its corresponding longest price oil boom between 1999 to 2007 as the price of oil rose from $26/barrel in 1998 to $140/barrel in 2007, however decried the level of underdevelopment and poverty ravaging the mass of its people.

He nevertheless stressed that oil brought some good fortunes to Nigeria as it provided the resources that financed the second, third and fourth National Development Plans, the number of tertiary institutions rose, roads and bridges were constructed across the countries; Nigeria expanded her infrastructure and physical asset base, often with big projects that later became ‘white elephant’ projects.

“The high fiscal dependence of all the levels of government; federal, states and local governments on oil revenues between 1993 and 2015 stood at N15.3trillion, N19.15 trillion and N67.06trillion respectively. Imagine what the money could have been spent upon in terms of schools, roads, hospitals and other developmental projects!”
The above notwithstanding, Adenikinju added:, “However, falling oil revenue widened the federal government deficit from N1.2trillion in 2013 to N1.4trillion in 2015 and an estimated N2.2trillion in 2016 thus resulting thereafter in 40 per cent of states running a deficit of more than 30 per cent of their revenue, according to the report of the Federal Government Economic Recovery and Growth Plan (ERGP) of 2017.

He said the lifestyles of politicians and their allies made it difficult for people to accept the sacrifice that higher oil prices would have translated into meaningful development especially if the deregulation of the sector and huge subsidy payments which were mainly beneficial to the rich at the expense of the poor were anything to go by.

Expressing worry on why agriculture, which was the mainstay of Nigeria’s economy and development indices not far from India, China, Indonesia, Singapore, South Korea, Malaysia and the like, nosedived to a sorry state, the professor also rue why Nigeria’s GDP per capita which was higher than those of China, India and Indonesia in 1960 did not maintain the kind of leaders it had then, so as to be among the most diversified and developed economies of the world today.

On the way forward, Adenikinju who described energy resource as a development help-meet divinely provided for Nigeria notwithstanding the leaders non-challance attitude to harness their potential and make use of their research works to fast track the nation’s growth, also prophesied a prosperous future for Nigeria especially when the energy sector properly occupies its role as a well nurtured ‘development help-meet’.