Excess Crude, Foreign Reserves: Obasanjo lied, says Okonjo-Iweala
konknaijaboy | On 09, Jan 2015
Allegations by former President Olusegun Obasanjo that President Goodluck Jonathan administration squandered the country’s reserves were absolutely untrue, Minister of Finance, Ngozi Okonjo-Iweala, said on Wednesday.
The minister said in a statement that, rather than $67 billion, the administration inherited only $43.13 billion.
Ms. Okonjo-Iweala explained that part of the foreign reserves was deployed by the Central Bank of Nigeria, CBN, to stabilize the falling value of the Naira at a time crude oil prices at the international oil market crashed in September 2011 to $31.7 billion.
Mr. Obasanjo in a meeting some South West women leaders in Abeokuta on Monday had alleged that about $67 billion left in the foreign reserve account by his administrations and his immediate successor, Umaru Yar’adua, was depleted by the Jonathan government.
“At the end of May 2007, Nigeria’s gross reserves stood at $43.13 billion – comprising the CBN’s external reserves of $31.5 billion, $9.43 billion in the Excess Crude Account, and $2.18 billion in Federal Government’s savings,” Ms. Okonjo-Iweala said.
The minister said the balance in the foreign reserves have been fluctuating over time in line with the swings of global crude oil prices in the international oil market.
According to her, the reality has been that since May 2007, oil prices reached a peak of $147 per barrel, the country’s reserves rose from $43.13 billion to peak at $62 billion in September 2008 during the Yar’adua/Jonathan Administration.
On Excess Crude revenue savings, the minister said it was used by the three tiers of government to shore up the economy and cushion the impact of global financial crisis at its height between 2008 and 2009.
As a result, she said Nigeria was one of the few countries in the world that did not seek assistance from international financial institutions at that time to cushion the impact of the global financial crisis on the economy.
Besides, Mrs. Okonjo-Iweala said the savings in the ECA were also used to pay for fuel subsidies to petroleum marketers to ensure uninterrupted supply of fuel in the country.
She blamed the 36 states governors for the depletion of the ECA, pointing out that, against strong professional advice, the governors were more interested in the revenue being shared, rather than supporting the continuous building up of the ECA.
“It is on record that States even took the Federal Government to court on this matter, and the case is still pending at the Supreme Court,” the minister said.
According to the minister, it was the Jonathan administration that built the Sovereign Wealth Fund, that would allow the country make savings for future generations of Nigerians and support infrastructure investments.