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How should Nigeria’s windfall oil cash be managed?


nigeria_poverty_hawker.jpgNigeria’s revenues from oil exports have reached unprecedented levels as global crude prices rally, yet the majority of its 140 million population remain mired in poverty. Africa’s top oil producer set up an “excess crude account” five years ago to save windfall oil earnings and try to help promote long-term economic stability.

But infighting among the three tiers of government — federal, state and local — on how the revenues should be shared out has seen them squandered.

The country is starved of electricity, the roads in even its plushest suburbs are pitted with potholes, and nine out of 10 people live on less than $2 a day, according to U.N.statistics.

How should Nigeria’s oil revenues be managed? Why is the country’s infrastructure so dilapidated when its state budgets are so high? Should the country set up a sovereign wealth fund? Would it be any better managed than the existing arrangement?