Yep, repairing your infrastructure is a spree

BBC NEWS | Africa | Nigeria launches $10bn oil spree

But the real push to spend such a large chunk of money from the nation’s oil coffers came not from the public, but from state governors.

Haggling

Nigeria’s power grid has all but totally collapsed.

Investment and job creation are almost impossible without a reliable electricity supply. The government promised to repair it, and said it needs to spend some of the nation’s savings to do so.

But state governors refused to allow funds to be withdrawn without getting a share.

“It was necessary to carry the state governments along,” a Ministry of Finance spokesman said.

“They have to plug holes in their budgets or deliver programmes they have promised their people.”

But civil society activists say there might be a more sinister outcome – the money might be frittered away or stolen.

I feel sad about this story, because there’s such a strong undercurrent of opinion that Nigeria shouldn’t have a functioning electrical grid, because they broke the one they had, or something. Electricity is, as the article notes, an essential ingredient for economic development. And the country has $18 billion in oil revenues socked away, of which it plans to spend $5 billion for the power grid. But oh, no, this “spree” could result in inflation (even though an enormous chunk of the money will be going to foreign contractors).

And yeah, the other $5 billion for provincial governments: maybe ugh, maybe not. Without a little more detail we have no idea whether the activists are blowing smoke. But the overall impression I get is that the best thing according the the BBC would be for the $18 billion to keep sitting in banks in rich countries, drawing minimal interest, while Nigerians remain desperately poor and without the capital to help themselves.

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