Nigeria launches $10bn oil spree



Despite its abundant oil wealth, Nigerians remain poor
The Nigerian government has decided to go on a spending spree with $10bn from its windfall from the rising oil price, despite warnings of inflation.

It will spend just over $5bn fixing the country's woeful power supply which has become the administration's priority.

The rest will be shared among the 36 state governments.

Critics say state governments are not trustworthy enough to spend the money wisely, but Nigerians also want the money spent on vital infrastructure.

It is believed the total reserve is about $18bn.

The announcement came after weeks of negotiation between the federal government and the state governors, finance ministry sources said.

There have been fierce arguments over how the money should be spent, or if it should be saved.

Economists warn that a government spending spree could stoke inflation.

The Nigerian constitution says the windfall must be shared among the state and local governments.

Non-governmental organisations have also warned of rampant corruption in state and local governments.

Accounting is not transparent, and the money risks being wasted or stolen, they say.



source:http://news.bbc.co.uk/2/hi/africa/7465430.stm

bilymuse:


Economists warn that a government spending spree could stoke inflation.

The Nigerian constitution says the windfall must be shared among the state and local governments.

Non-governmental organisations have also warned of rampant corruption in state and local governments.

Accounting is not transparent, and the money risks being wasted or stolen, they say.

Well,  either that money be spent or we sit and wait to hear that someone has stolen it. We can only hope that this time, common sense will reign but then I will not hold my breath. Fingers crossed; praying for a miracle this time around!!

I think the money should be spent - the so called 'excess crude account' in itself is illegal. Yar'adua has just shown he has a poor grasp of issues and wasted one year.

This is the same excess crude account that he stopped withdrawals from in the name of 'rule of law' and suspended work from running the power plants, and now in one fell swoop, withdraws $10b along with the states and local governments, STILL WITHOUT any legal justification or framework backing the expenditure - the money was not appropriated, neither was the 'excess crude account' legalised.

The money should be spent however, I still don't see the sense in building up money when the country's infrastructure is in dire straits and virtually collapsed in all areas. My only hope is that the money will at least be partly used for the purposes it is meant for (if any planning was done that is) and not just frittered away. Nigeria has a golden opportunity to drive rapid infrastructure growth and finally begin to diversify away from dependence on oil, only if these funds are used properly.

I hear $5.2b has been earmarked for power projects, does anyone have any clue what the balance is to be used for? Or is it just to be 'shared' amongst the three tiers with no plan or expected impact?

How exactly did they arrive at the decision that $5.2b dollars is what is required in the power sector? or was that just an arbitrary figure picked up from the air?