Vunderkind
Social Member
Corruption in Nigeria has fed for generations on state monopolies that encourage failure on a grand scale. Yet each time over the past two decades that government has found the political will to break up these power centres, the country’s potential as the leading driver of continental growth has become evident. The case for commercialising the Nigerian National Petroleum Corporation, the state oil company, has never been so clear. Because of its position as a source typically of 70 per cent of state revenues and more than 90 per cent of export earnings, oil and the way it is managed is central to Nigeria’s economic wellbeing. As things stand, the NNPC is at the centre of a rotten industry which is a barrier to growth.
According to Lamido Sanusi, the outspoken governor of the central bank, mismanagement at the NNPC and other state agencies in upstream and downstream energy is costing the treasury about $1bn every month. His detailed revelations to a senate committee and the unprecedented scrutiny that oil sector transactions now face as a result, should provide ammunition for reformers in and outside government to demand an urgent clean-up. The scale of losses is now so huge it is jeopardising macroeconomic fundamentals despite the soaring price of oil. It is stripping the treasury of rainy-day savings, placing the currency and foreign reserves under stress and forcing the central bank to raise interest rates.
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