Use of oil fund for recurrent expenditure sub-optional – Umahi

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By Nkechinyere Oginyi, Abakaliki

Governor of Ebonyi State, Engr Dave Umahi, has said that Nigeria can overcome its economic challenges without oil economy even as oil revenue continues to dwindle. He said there were many ways to survive hardship in the country without waiting for oil money which is no more forthcoming.

Umahi spoke at the University of Nigeria Nsukka where he was a guest speaker in the 59th Founders Day Lecture with the theme “Preparing Ebonyi State for Tomorrow’s Zero Oil Economy” on Tuesday.

The governor emphasised that one of the ways Nigeria could survive without relying on oil and even grow faster was to ensure that all revenues from oil were applied only to infrastructure development in the country.

“If we are to insist that recurrent expenditure must be funded from non-oil revenue, it will focus the minds of governments a lot more and drive productivity. It will also make the imperative to improve tax collection more urgent, which will, in turn, drive accountability as citizens start to ask what is being done with the taxes they pay”.

“Zero oil economy contemplates economy without oil. It is a process of shifting an economy away from oil source to other multiple sources from a growing range of sectors and markets. This requires economic substitutes for oil and gas with the global technological trends and with the emergence of all other renewable energy sources. We need to look beyond oil in our quest to give meaning to the lives of our people. We need to have a zero-oil plan as our strategy for economic recovery and growth.

“We need to plan to reduce dependence on oil as (the) countries main foreign exchange. Oil has dominated the country’s economic space. Unfortunately, we don’t have control of the price and it can crash at any time.

“Therefore, at a time Nigeria’s major revenue earner crude oil is experiencing volatility in price at the global level, and cost of projects rising higher than accruable oil revenue, there is need to drive ambitions for strategic zero-oil policy to reposition the country’s economy”.

The governor revealed that Nigeria’s economy was no longer what it used to be at the early period of its independence. “The founding fathers of this university bequeathed to us an economy that was strong and competitive with other economies of the world. The East was a major producer and exporter of palm oil, the West was a major producer and exporter of cocoa, the North was a major producer and exporter of many agricultural produce especially groundnut in the world market.

“Insecurity and criminalities were low. The rate of Naira to Dollar was N5.41to a dollar. Today, oil makes over 80% of all the country’s revenue and the exportation of crude oil brings nearly 98% of all export earnings. Today, the rate of Naira to Dollar is N360.00 per dollar.

“Statistics has shown that oil economy is not the greatest precursor of job creation, food security and general economic growth, instead it breeds low standard of living, it widens the gap between the poor and the rich and brings about economic imbalance and encourages unemployment. With a nation of over 180 million people, the only way out is economic diversification or zero oil initiatives by government. This is coupled with the fact that new technology is evolving, where engines or machines are manufactured to function without oil. There is pressure on federal allocation; there is alternative energy source like solar and wind energy that may crash the price of oil,” he said.

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