19 December 2012

Nigeria: Stop Sharing Excess Crude Funds, Ex-CBN Gov Tells Jonathan

A former governor of the Central Bank of Nigeria (CBN), Chief Joseph Sanusi, has told the federal government not to succumb to pressure to share the excess crude oil revenue among the three tiers of government.

Sanusi, who gave the advice in an interview with journalists yesterday in Lagos, said that spending all the money now could spell doom for the economy in future, but that they should be saved in the Sovereign Wealth Fund (SWF), for use on the rainy day.

The excess crude revenue, which currently stands at $9.6 billion, was realised from crude oil sales above the budgetary crude oil price benchmark.

The accountant-general of the federation, Mr John Atunla, had announced recently that the 36 state governors had requested the release of some of the money to fund ongoing development projects in their respective states.

He, however, said the federal government and the governors were yet to reach a consensus on the matter.

Sanusi said that it did not make any economic sense to spend revenue realised from the excess crude account now.

"I have always supported the idea of setting aside something like a fund to save for the rainy day, and now SWF has been created. When I was preaching the idea in those days as CBN governor, the state governors used to tell me that we should spend the money as the rainy day was already here.

"I don't believe so because the price of oil is still high. It is good we keep the excess revenue in SWF as a protection against the volatility of oil price and keep the economy stable. So, it is gladdening that we have the fund and I urge the federal government to be committed to it," he said.

The former apex bank governor described as unsustainable the huge recurrent expenditure of the budget in terms of jumbo allowances and salaries paid to political office holders.

He called for a review of the country's political structure in favour of small and inexpensive government, stressing that the government, as currently being run, was a threat to development.

Sanusi also decried the perennial poor implementation of the budget, saying the trillions of naira rolled out yearly as budgets had not translated to development.

"We are not getting value for all these figures we roll out because there is little commitment to the country, too many people think about themselves and not the country.

"A lot of people are personally rich, while the country is poor. I think we need to have a rethink and re-assess our values if the country must progress, " he said.

Sanusi cautioned against attempts to strip the CBN of its autonomy, saying doing that would mean departing from the normal practice all over the world.

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