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Nigeria missed oil boom opportunities -IMF chief
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Dominique Strauss-Kahn said Nigeria, the eighth-biggest exporter of crude oil in the world, shared a challenge facing several resource-rich African countries — that of finding the right fiscal response to an increase in revenues.
“Nigeria is a very good example. Fiscal policy has been well-managed in the past years, but Nigeria has also missed some opportunities with the oil boom,” Strauss-Kahn told African government officials in Abuja.
“Now the question of fiscal responsibility is at stake,” he said.
Strauss-Kahn did not elaborate on his comments about Nigeria, which were part of a brief introduction to a workshop on revenue mobilisation.
He was apparently referring to Nigeria’s economic reform programme, launched in 2003, which has improved macro-economic stability, but has yet to make much headway in fixing the country’s collapsed infrastructure or reducing poverty.
A political argument is raging at the moment over the previous administration’s spending on the power sector, which was between $5-billion and $16-billion according to different government sources.
Despite the spending, Nigeria’s electricity generation capacity has remained stuck at a woeful 3,000 megawatts (mw), meaning that most of Nigeria’s 140-million people have little or no power.
This is partly because Nigeria has limited capacity to spend the money effectively, and partly because a lot still gets stolen by corrupt officials.
The present administration that came in last May has struggled to stick to fiscal prudence.
Under pressure from state governments, it has agreed to release $4-billion from the oil savings, and a struggle is currently under way between the executive and the National Assembly over the 2008 budget, which has yet to pass into law.
Legislators raised planned expenditure by N440-billion ($3.7 billion) compared with the executive’s proposals.
President Umaru Yar’Adua has refused to sign off on this and asked them to cut spending. However, he is planning his own supplementary budget for infrastructure spending.
The country’s home-grown reform programme obtained IMF backing in the form of a 2-year Policy Support Instrument (PSI), which involved IMF delegations making regular visits to assess how Nigeria was doing and offer advice.
The PSI expired in October, but the IMF has continued to follow Nigeria, repeatedly stressing that prudent management of oil revenues was key to sustaining the benefits of reform.
It has also stuck to its view that it is crucial for Nigeria to de-link spending plans from the vagaries of the oil price.
“Nigeria is a very good example. Fiscal policy has been well-managed in the past years, but Nigeria has also missed some opportunities with the oil boom,” Strauss-Kahn told African government officials in Abuja.
“Now the question of fiscal responsibility is at stake,” he said.
Strauss-Kahn did not elaborate on his comments about Nigeria, which were part of a brief introduction to a workshop on revenue mobilisation.
He was apparently referring to Nigeria’s economic reform programme, launched in 2003, which has improved macro-economic stability, but has yet to make much headway in fixing the country’s collapsed infrastructure or reducing poverty.
A political argument is raging at the moment over the previous administration’s spending on the power sector, which was between $5-billion and $16-billion according to different government sources.
Despite the spending, Nigeria’s electricity generation capacity has remained stuck at a woeful 3,000 megawatts (mw), meaning that most of Nigeria’s 140-million people have little or no power.
This is partly because Nigeria has limited capacity to spend the money effectively, and partly because a lot still gets stolen by corrupt officials.
The present administration that came in last May has struggled to stick to fiscal prudence.
Under pressure from state governments, it has agreed to release $4-billion from the oil savings, and a struggle is currently under way between the executive and the National Assembly over the 2008 budget, which has yet to pass into law.
Legislators raised planned expenditure by N440-billion ($3.7 billion) compared with the executive’s proposals.
President Umaru Yar’Adua has refused to sign off on this and asked them to cut spending. However, he is planning his own supplementary budget for infrastructure spending.
The country’s home-grown reform programme obtained IMF backing in the form of a 2-year Policy Support Instrument (PSI), which involved IMF delegations making regular visits to assess how Nigeria was doing and offer advice.
The PSI expired in October, but the IMF has continued to follow Nigeria, repeatedly stressing that prudent management of oil revenues was key to sustaining the benefits of reform.
It has also stuck to its view that it is crucial for Nigeria to de-link spending plans from the vagaries of the oil price.
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