Nigeria: Failure to utilise oil boom led to present woes – Fashola

*Babatunde Raji Fashola, Nigeria's minister of Power.

*Babatunde Raji Fashola, Nigeria’s minister of Power.

Oscarline Onwuemenyi

26 January 2016, Sweetcrude, Abuja —
Nigeria’s Minister of Works, Power and Housing, Mr. Babatunde Fashola has said the country’s failure to effectively invest resources from past oil booms in diversifying the economy has led to the dire state of the economy presently.

Fashola, who spoke in Abuja, at the Nigerian Pension Industry Strategy Implementation Roadmap Retreat, noted that with the dwindling revenue from the country’s major source of income, the crude oil, there was need to diversify and change the face of the nation’s economy once and for all.

In an address titled, “Overcoming the challenges and managing the risks and constraints that inhibit the investment of private capital and funds in Nigeria’s infrastructure landscape in order to make a visible economic impact,” the minister revealed that an option available to achieve diversification was to utilise available assets or savings such as the private money belonging to pensioners.

According to Fashola, the country failed to utilise the oil boom period to diversify the economy adding that, “today’s reality is that we are in another cycle of bust. Oil prices have crashed from over $100 per barrel and is now hovering around $30 per barrel, and there is a real chance that it will fall lower.

“For over three decades, we have mouthed the need to diversify our economy in order to open up more sectors for productive activities, income, economic growth and jobs. But we failed to follow through because of oil resources.

“Every time the cycle burst, we scampered, and promised to diversify but we soon drop the idea because not too far on the horizon is a boom in oil prices and we go back to an old life.”

Fashola, therefore, advocated the adoption of a national policy that would allow the utilisation of the huge pension fund in growing the real sector, as a means of diversifying the economy.

Fashola noted that, “With the right attitude to diversification utilising the huge fund representing the contribution of Nigeria’s working class, pension shows that the national economy is bigger than the challenges posed by the dwindling oil prices,” he said.

Quoting an online publication of “Institutional Investors”, which estimated Sub-Saharan Africa’s ten largest pension fund markets as having approximately $310 billion in assets recently, the minister said that the funds were not serving the “Real Sector” of roads, bridges, hospitals, rails, airports and fee paying universities among others.

“There is a palpably visible poverty in most of these countries, some of who gathered to seek funding support in South Africa recently at the instance of the Chinese Government who offered funding support (loans) of $60 billion for all of Africa, when 10 (ten) pension funds had $310 billion lying fallow.

“Many of these countries are scurrying after multilateral agencies looking either for aid or loans, while sitting literally on a pot of money,” he added.

The Nigerian contributory pension funds managed by licensed pension fund administration currently stands at N5 trillion.

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