Nigeria: World Bank Tasks FG to Raise Excess Crude Account to U.S.$6.3 Billion

Posted on : Wednesday , 15th October 2014

 The World Bank has advised the federal government to increase its fiscal buffers by raising the excess crude account (ECA) to $6.3 billion.

Finance Minister, Dr. Ngozi Okonjo-Iweala, disclosed this in Washington DC, saying the World Bank tasked the Federal Government on the need to increase its fiscal buffers by building external reserves to about $6.3 billion, up from the present level of $4.1 billion.
Speaking to Nigerian journalists at the end of the 2014 annual meetings, Okonjo-Iweala assured: "we would look at how we would strengthen the buffer. There is no cause for alarm; we are on top of the game. We have to be realistic about our ability to spend."
Instead, she said the nation's economic management team is working on contingency plans, beginning with analysing various modules and scenarios in terms of oil price shocks.
She said that there had been a contingency plan to ensure that the economy does not suffer in spite the drop in global oil price.
'First, we have to realize the dimensions of the situation and we are beginning to do that.
"With the team here, the DG budget, the Central Bank, we are looking at various scenarios. We are running our models in terms of the oil price shocks and so on, even quality shocks.
'And when you look at contingency scenarios, there are three ways you can manage them," she said.
According to her, you can either go outside or get resources. But we are not planning to do that. We are not going outside to get resources at this moment, that is the pride that we have had, she added.
She said that government has no plans of such idea now adding that it would look at the revenue and expenditure side to see the level of preparedness in its dealings.
She said that from the revenue side some positive result had emerged with additional help to the Federal Inland Revenue Services.
"Because we were a little bit ahead of the curve, in trying to bring on some extra help to FIRS, we gave a target of 500 million dollars which is about N75 billion to the FIRS backed by the McKinsey that is helping to strengthen their capacity to improve audits and plug leakages.
And I am happy to say that of the N75 billion target, they have already hit N44 billion of additional revenues in July. So, at least we will be able to increase our revenues that has actually helped us."
She said According to Okonjo-Iweala, who is also Coordinating Minister of the Economy, the World Bank Group at its just concluded 2014 Annual Meetings deliberated extensively on the very uncertain mode of the global economy at this point with the global economy expected to grow at just 3.8 per cent for 2015





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