Nigeria takes $1 billion from oil savings to fight militants

By Elisha Bala-Gbogbo and Yinka Ibukun on 12/15/2017

ABUJA (Bloomberg) -- Nigeria will take $1 billion from a special account for oil-revenue savings to boost its war against Boko Haram Islamist militants in the country’s northeast.

Governors of the country’s 36 states met with the federal government as the National Economic Council to deliberate on the expenditure, according to Godwin Obaseki, governor of southern Edo state.

“The governors have given permission to the federal government to spend the sum of $1 billion in the fight against the insurgency,” he told reporters in Abuja after the meeting on Thursday. That will leave $1.32 billion remaining in the excess crude account, where oil income above budgeted estimates are saved, according to figures provided by the government.

Boko Haram militants, who are opposed to Western education and seek to impose their version of Islamic law in Nigeria, are in the eighth year of an insurgency that has left at least 20,000 people dead, according to the government. President Muhammadu Buhari won elections in 2015 with the defeat of the group among his key campaign pledges.

“We are getting closer to the elections and defeating Boko Haram was a major campaign promise; going in these elections without delivering on that promise will be tough,” said Freedom Onuoha, a senior political science lecturer at the University of Nigeria, in the southeastern town of Nsukka.

With a new vote approaching, some of these funds for security may find their way into the election campaign, Onuoha said. “The details of spending aren’t usually made public. That creates an opportunity, a smokescreen, that can be used to fund elections and other hidden spending,” he said.

Ambushing troops

Concerns the government may misuse the money are misplaced, according Laolu Akande, a spokesman for Vice President Yemi Osinbajo, who represented the federal side at the meeting with governors. “Nigerians have come to appreciate that the Buhari administration is as one that is judicious with the management of the country’s resources and actively fighting corruption,” he said.

Since he took office, the military has recaptured lost grounds from Boko Haram, enabling assistance to reach millions of displaced people in what has been described by aid agencies as one of the world’s worst humanitarian disasters. The militants, who have pledged allegiance to the Islamic State, have also changed to guerrilla tactics, ambushing troops and increasing suicide attacks against both military and civilian targets.

The government may have decided to withdraw from the oil savings because of improved crude prices, according to Dolapo Oni, head of energy research at Ecobank Nigeria Ltd. in Lagos.

“But this is not what the savings are meant to be used for,” he said. “They are meant to fund the budget and capital expenditure. The idea is that it’s a rainy day fund.”

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