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Nigeria oil savings more than double in a year: Finance Min.

Nigerian finance Minister says Excess Crude Account reached $9 billion in 2012, up from $4 billion last year

Reuters, Monday 3 Dec 2012

Nigeria has replenished the savings in its Excess Crude Account (ECA) to some $9 billion, or more than double what it was a year ago, Finance Minister Ngozi Okonjo-Iweala said on Monday.

Okonjo-Iweala was addressing delegates at the annual Nigerian Economic Summit in the capital Abuja, whose themes include fiscal prudence and reducing the high cost of governance in Africa's top oil producer.

"Before you can even look at the centres of the economy and trying to change them and create jobs, you must have macro-economic stability," Okonjo-Iweala said. "We have introduced a measure of fiscal discipline."

"The fact that (forex) reserves are climbing now is not a miracle. It happened because of proper fiscal management. We have about $9 billion in the excess crude account. Last year it was $4 billion, so it's more than doubled," she added.

But she said that some of this would have to be used to pay for the latest round of Nigeria's costly food import subsidies.

The finance minister faces a showdown in parliament over the government's latest budget, with some lawmakers saying too much money is being set aside as oil savings when the country needs more spending on things like infrastructure.

A 4.93 trillion Nigerian naira ($31.35 billion) budget plan that President Goodluck Jonathan presented to parliament for 2013 cautiously assumes oil prices to be $75 a barrel, but many legislators want this inflated. Oil earnings over the benchmark price get deposited into the ECA, which is used to save for future generations or cushion against oil price shocks.

Critics say running Nigeria's government still saps too much of the budget - Okonjo-Iweala said the share of such recurrent expenditure had been reduced to 68.8 percent in next year's budget, from its current 71.47 percent in this year's.

"And it will continue to come down," she said.

Investors and rating agencies have welcomed Okonjo-Iweala's austerity drive, with Standard & Poor's the latest to upgrade Nigeria's debt to BB-, with a stable outlook.

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