Minister for State for Petroleum Resources, Dr. Ibe Kachikwu, has said the Federal Government is considering plans to ‘lock up’ revenues realised from the oil sector and save them in the Sovereign Wealth Fund (SWF).
Kachikwu, who made the disclosure yesterday at the unveiling of Heyden Petroleum’s mega petrol station in VGC, Lagos, said efforts were being made to convince President Muhammadu Buhari to buy into the idea in order to save for the future generation.
“We will convince the president to lock up every kobo we have in this country and put it in the SWF and spend something else, so that we can begin quite frankly. When I met with The Netherland Ambassador, he said, today, they have the highest sovereign wealth fund in the world and they have decided that whatever they have from oil, they are not going to spend it; instead they will save every penny of it and rely on the interest and other sources.’’
The SWF was created to manage and invest funds on behalf of the government. The fund, which started operations in October 2012, was set up with an initial $1 billion as seed capital, by the Nigeria Sovereign Investment Authority Act, which was signed in May 2011. Essentially, SWF was established to invest the savings gained on the difference between the budgeted and actual market prices for oil to earn returns that would benefit future generations of Nigerians.
Saving oil money in the SWF had been a subject of controversy. Apart from the seed capital, which was contributed by the federal and state governments, attempts to save more oil money in the fund by the administration of the former President Goodluck Jonathan were vehemently resisted by the state governors, who insisted all revenues must be paid into the consolidated revenue fund and shared. Kachikwu, who attributed Nigeria’s present economic quagmire to her dependence on oil revenue urged the people to go back and look at the resources inherent in other areas and begin to make money for future generations.
According to the minister, rather than rely on oil receipts, government should focus on the interest elements from oil, while leveraging monies from other sources to spend. ‘’There is too much reliance on oil with state governors fighting over allocations and sharing patterns. People must go back and look at the resources inherent in those areas and begin to make money for future generations. For the oil industry, I’m determined to touch anything touchable, whatever can be changed to dramatically change’’, he said.
He stated that every sector of the economy is in search of direction, stressing that there is need to recognise the abundant opportunities in the country and put behind us the challenges posed by the recession.
He noted that when these monies were saved for the future generation, there would be great transformation in the economy, adding that Nigerians naturally are entrepreneurs who are ready to work and develop the economy given the right platform and opportunities.
“Recession is a blessing in many respects, such as checkmating how we spend money. In my one year in office, I have gone through removing subsidies, which is saving about N1.4 trillion for the federal government. We have gone through cash crunch, which is expected to save about $9billion yearly. Therefore, there are lots of opportunities. The average Nigerian lives above his means.
“The culture has to change. One of the ways to change this culture is what President Buhari is doing to change those fundamentals. It may be very tough, and seem as if nothing is happening because it is a lifestyle we have lived over 30 years. We will drive gas incomes so that we don’t depend on oil alone. We will continue on this road path with a lot of work and we hope that in another two years, the country will be transformed.”
Kachikwu added: “The Nigerian National Petroleum Corporation (NNPC) has changed dramatically. We are not where we should be, but we have changed. We have good managers who can run establishments. We are going to get law to back the system up so that the individuals are left long enough on their jobs to make policies work, it can become political appointment. There is a lot that is going to happen.
The minister expressed the commitment of the present administration to reposition the oil industry, adding that if this is achieved, the country would be exporting petroleum, rather than importing.” According to him, “The drive of the administration is to ensure that we will not be buying petroleum products, rather exporting. There is a lot that is going to happen.” Kachikwu explained that the administration was working to ensure there was abundant gas for domestic use, particularly, power generation.
In his remarks, Managing Director of Heyden Petroleum, Dapo Abiodun, stated that the station was strategically positioned to serve the Victoria Garden City (VGC) and environs, adding that with the 29 pumps, out of which 24 would be serving fuel, the station will address the issue of fuel shortage in the area owing to few petrol stations in that axis.
He noted that the investment of downstream petroleum sector has paid off due to the incentives provided by the current administration and the deregulation of the sector, which was a problem in the past. “Kachikwu and the present administration did everything possible to reduce the burden of subsidy. We are committed to ensuring the improvement of the downstream sector,” he pledged.