24 February 2016, Lagos — The Vice President and Treasurer of the World Bank, Ms. Arunma Oteh has called on the federal government to reposition the Nigeria oil and gas industry, stating that the sector has the potential to provide for the future and the improvement of lives.
She said that there are a lot of discussions on how to share the oil revenue, instead of how to grow and develop the country amongst the three tiers of government, pointing out that many state governments have cut down capital spending while others are struggling to pay salaries and even bail themselves out from debt.
Oteh disclosed this on Monday at the Philip Asiodu Lecture Series with the theme: “The Proper Role of Oil in the Context of Accelerating Growth and Development in Nigeria.”
She also stated that with the country’s heavy reliance on the oil industry and the national budget’s almost completely dependent on oil revenues, the efficient management and protection of oil resources should not only be a developmental issue, but a national security issue.
Oteh said: “Diversifying Nigeria’s economy away from oil is urgent for two reasons. First, despite Nigeria’s Gross Domestic Product (GDP) growth over the past decade, it lags behind in human development and competitiveness indicators. A broader-based, more inclusive economy is needed to effectively transmit as much oil wealth as possible into improving the well-being of all Nigerians.
“Second, Nigeria’s over-dependence on oil revenues for its economic growth and government budget makes it highly susceptible to oil price volatility. Furthermore, the future of the oil industry will be shaped by climate change and environmental concerns which require a global transition from fossil fuels to a cleaner, renewable and efficient energy sources.
“The role of oil in accelerating Nigeria’s development is to provide it with financial resources to make strategic investments to diversify its economy. Success requires a strategic vision of the future, establishing sound development plans to achieve that vision, effective implementation, and on-going monitoring of the implementation to ensure that the desired objectives are achieved. Nigeria must establish a strategic vision of what it wants the economy to be in future and continuously re-evaluate that vision in the face of a rapidly evolving world.”
The former Director-General of the Securities and Exchange Commission further stated that the development of the country should imply excellence on fronts that will shape the quality of life and welfare of the people, stressing that despite the high growth of the GDP in the past decade, the level of under-development in the country remains high.
She added: “The oil sector challenges include pro-cyclical fiscal policies, weakening of the agricultural sector, and governance that has been characterized by weak institutions and lack of transparency.”
The World Bank VP stated that listing of the Nigeria National Petroleum Corporation (NNPC) on the Nigeria Stock Exchange (NSE) besides growing the capital market would also be an important way to strengthen accountability and transparency of managing the state-owned enterprise.
*Ugo Aliogo – Thisday