The World Bank published a report titled “The Changing Wealth of Nations 2021” on Wednesday, which stated that Nigeria’s current oil reserves would only last about 49 years unless new oil drills are made available.
Changing Wealth of Nations is the fourth World Bank report on global wealth accounting. It breaks new ground by expanding coverage and measures of capital assets, including natural capital. for the first time, Applying purchasing power parity (PPP) prices to wealth and decomposition analysis to understand the drivers of change in wealth.
“Oil-producing countries like Nigeria and Ecuador could entirely deplete their oil reserves in fewer than 50 years at current depletion rates, assuming no other significant oil fields are discovered or become commercially viable,” the authors of the report wrote.
The report also suggests that resource-rich countries such as Guinea, Sierra Leone, and Iraq require better wealth management to avoid disastrous consequences on their national wealth in the future.
“This is true not only for hydrocarbon-rich countries such as Iraq and Nigeria but also for some mineral-rich countries, such as Guinea and Sierra Leone. The negative adjusted net savings in these countries are a lead indicator of unsustainable wealth management. If continued, it will negatively impact the value of future wealth,” the report said.
Investments in renewable natural resources and human capital could help countries not rely so much on oil and gas but diversify their asset portfolio for a more sustainable future.
The report explained: “This is because the value of a depleting non-renewable asset is being consumed rather than being invested in offsetting asset accumulation, such as via human capital or productive capital investment. Therefore, governments may need to consider policies that would better preserve and build wealth or look for alternative sources of income to raise their net savings.”