Daily Independent (Lagos)
31 October 2008
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has presented a booklet on how the oil windfall should be managed by the Federal Government to sustain the economy.
The booklet was unveiled at the association's two-day annual general meeting and conference which began in Aba, Abia State on October 29, 2008, with the theme: "Managing the windfall from oil revenue and infrastructure provision."
The President of NACCIMA, Dr Ignatius Ijegwa Adaji, said the association packaged the booklet to enable the Federal Government speed up its economic programmes.
While assessing the theme, Adaji said the choice of the theme for the conference was apt and appropriate at this period of Nigeria's development process when the Federal Government is making serious efforts to partner with the Organised Private Sector (OPS) to facilitate the provision of conducive environment for business growth and development through provision of structures and infrastructure towards actualization of the common goal and development of the national economy.
Adaji said the sudden increase in revenue of the government, due primarily to a steep increase in the oil commodity prices, is regarded as the "oil windfall.
"In other words, oil windfall refers to the extra revenue earned by the government from oil export as a result of the abnormal oil price. Better put, oil windfall revenue is the extra revenue, which may accrue to a nation from the sale of crude oil in excess of the benchmark provisions in the budget.
"The windfall represents the difference between the budget price per barrel of crude oil and the realised price in the international market.
"Aside this oil windfall, many analysts believe that the discovery of oil in Nigeria and the subsequent boom which that industry experienced over the years generated enough resources that ought to have helped to position the economy on the path of growth and sustainable development.
"This is possible through the provision of adequate infrastructure which are badly needed to fast track industrial production and distribution such as power and energy supply, transportation (roads and railways), telecommunication,
water supply, health and educational services, housing, among others."
The NACCIMA president said the adequate and functioning infrastructure is not only a causal factor in promoting growth, it also supplies the required support and panacea for sustaining economic growth.
"Therefore, deliberate policy by government to invest in socio-economic infrastructure is necessary not only because of its direct effect on industrial output but also because it enhances economic and social welfare of the citizenry, increases aggregate demand, which stimulates the entire economy and reduces cost of doing business."
Adaji said the funding problem, which the infrastructure sector has experienced over the years is what is responsible for the poor state of infrastructure in the country that has invariably impeded the growth and development of the country as desired and it becomes pertinent to note that the challenges of attaining desired growth and sustainable development of the economy are still possible if only a reasonable percentage of Nigeria's Oil Windfall (i.e. excess crude oil revenue) realized is utilized judiciously, particularly in the area of critical infrastructures.
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