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Business Okonjo-Iweala Raises Concerns Over Depletion of Nigeria's Excess Crude Account



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Nigeria's Finance Minister/Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, on Tuesday raised serious concerns over the continued depletion of the Excess Crude Account when she appeared before the Joint Senate Committee on Finanace and National Planning. The Punch reports.

While answering questions on the Medium Term Expenditure Framework and Fiscal Strategy Paper sent to the Senate by President Goodluck Jonathan two weeks ago, she stressed that the development was capable of causing further inflation.

“I think that the excess crude account was built to be able to cushion us at times like this, when we have some kind of difficulties and I think it played that role to perfection during the crises of 2008, when oil fell to $38 and $40 per barrel, even worse than what we have now.

“The IMF actually calculated $6.3bn to be maintained in that account. It (would) help to cushion our exchange rate so if we go and withdraw it abruptly beyond that amount it causes a problem and you know we went down to $2bn last year.

“We later built it up to $9bn and there was insistence we must share, it came down to $2 and then we had at least built it back to $5bn. Right now we are at $4.1bn.

“If we had built it to a stable cushion, then anything above that we could now use to augment and that the reason why we have not seen…that is why we have to balance out everything.

“Nigerians care so much about exchange rate. If you have abrupt changes, that will also affect the psychology of Nigerians, inflation and all that.”

She however maintained that the nation’s economy at the present time, was reasonably stable compared to other countries, however noted that some actions have to be taken in order to maintain the stability.

#Nigeria #Punch #Okonjo-Iweala