As crude oil prices fall below $35/bbl, recent abuse of Nigeria’s Sovereign Wealth Fund framework including the illegal transfer of $1.76bn to Governors during election campaign & illegal use of funds for fertilizer subsidy by @NSIA_Nigeria now puts the economy at risk

Thread!

Nigeria’s Sovereign Wealth Framework has 3 enabling laws governing it. The laws require any incumbent government to save excess crude oil revenue & a component of non-excess crude oil revenue into 5 separate funds for a time crude oil price crashes; that day is here

#FixOurOil

No savings were made into the Excess Crude Account for several months between 2015 & 2018 when the crude oil price was above the benchmark as required by the Fiscal Responsibility Act, indicating selective compliance with the enabling law by @Mbuhari’s government

#FixOurOil

Between 2011 & 2018, no savings were made from each tier of government's share of the Federation Account by @GEJonathan or @MBuhari into the 3 Sovereign Wealth Funds managed by @NSIA_Nigeria as required by Part 3 Section (31) of NSIA Act due to a loophole in the law

#FixOurOil

S.30(1) of NSIA Act, requires any government to save ONLY from residual funds left in the Federation Account. This constitutes a loophole, as no funds will be left in the account after revenue is shared to all tiers of government.

#FixOurOil

Over five (5) illegal withdrawals were made from the Excess Crude Account by @GEJonathan & @MBuhari Govts between 2014 & 2018 including a total of N759.6bn for petrol subsidy, N151.4bn Tucano aircraft purchase, N116bn for security equipment & more.

#FixOurOil

Also, @NSIA_Nigeria operates an illegal fertilizer subsidy program for selected agro-dealers and state governments which is outside its mandate to invest savings for the rainy day and for long-term infrastructure.

#FixOurOil

@Mbuhari illegally paid $1.761bn to State governors during the last election campaigns from Excess Crude Account whereas the Fiscal Responsibility Act requires Crude Oil price to drop BELOW the benchmark FOR 90days BEFORE withdrawals can be made

#FixOurOil

Furthermore, the Fiscal Responsibility Act also permits Excess Crude Account savings to be used ONLY to augment SHORTFALL in budgeted revenue due to a fall in Crude Oil price. It is clear that @MBuhari's government disregarded this law.

#FixOurOil

Part of the $1.76bn debt the FG illegally paid to State Governors from Nigeria's savings was from State's share of the ECA - creating a similar situation of over-deduction which necessitated the Paris Club refunds to state governments in the first place.

#FixOurOil

Recommendations
1. Harmonize Sovereign Wealth Fund Laws:

Policymakers and legislators need to harmonize all three savings and stabilization laws in the country, plug loopholes and work to embed explicit provisions to save from natural resources revenue in Nigeria’s constitution

2. Prosecute Duty Bearers:

Although @MBuhari & governors have prosecutorial immunity, CSOs should take legal action against career civil servants involved in breaching SWF laws to create a culture of resisting illegal demands from elected politicians for fear of consequences

3. Oversight institutions need to intervene;

@nassnigeria especially the Public Accounts Committee needs to intervene and probe all spendings from the Sovereign Wealth Fund framework especially the Excess Crude Account, ECA, as part of its oversight function.
#FixOurOil

4. Require savings from natural gas;

With the country's huge natural gas reserves and the FG's receipt of N275bn dividend & N301bn sales proceeds from NLNG alone in 2018, it's time our laws prioritize quarterly savings from revenue accrued from natural gas sales

#FixOurOil

5. Court Injunction ending NSIA’s Fertilizer Subsidy

CSOs need to explore a carefully thought out legal action to obtain a perpetual injunction preventing @NSIA_Nigeria from selling fertilizers at a loss to state governors through a subsidy scheme

#FixOurOil