Nigeria’s oil savings, which is known as the Excess Crude Account (ECA), have been massively depleted from US$20 billion in 2006 to US$3.6 billion as at Thursday (12April), raising fears of a serious economic problem in the event of a fall in oil prices.
Finance Minister and Coordinating Minister for the Economy Ngozi Okonjo-Iweala announced the depletion during an interactive session with civil society organizations in the capital city of Abuja Thursday.
She warned that there would be an economic crisis in the event of volatility in the price of oil as witnessed in 2008, when oil prices crashed from US$147 per barrel to about US$38 per barrel.
“The US$3.6 billion in the excess crude account is not enough to sustain Nigeria for any period of time,” she said.
The Governors of the country’s 36 states have continued to insist on the monthly sharing of the funds in the ECA, in accordance with the country’s Constitution.
According to the Minister, while the Governors might be justified in their arguments on constitutionality and fiscal federalism, Nigeria – as an oil-producing country – should not be an exception where governments at the federal level sets aside some savings for the rainy day.
“Every state can save but the Federal Government can save for all Nigerians,” she said, in trying to justify the Sovereign Wealth Fund (SWA), which so far has US$1 billion, despite strong objections from the Governors