Okonjo-Iweala blasts governors for depleting Nigeria's huge savings

Minister of Finance, Ngozi Okonjo-Iweala

The Minister for Finance, Ngozi Okonjo-Iweala, says Nigerians should hold the governors of the 36 states of the federation responsible for depleting the excess crude revenue account from $20billion in 2003 to about $3.6billion today.

The minister said Nigeria was able to survive the negative impact of the global economic crisis because it was able to augment its budget deficit and continue with most of its development programmes with revenues from a healthy Excess Crude Revenue Account.

But, Mrs. Okonjo-Iweala, who is also the Coordinating Minister for the Economy, told a meeting of civil society organisations on Thursday in Abuja that the country might not survive another global economic downturn, with a depleted Excess Crude Revenue Account.

The Minister said the 36 state governors should be held responsible for the massive draw down on the account, as the Federal Government was compelled to share over $16.4billion revenue accumulated in the excess crude account prior to the global economic depression, because they believed it was unconstitutional and illegal.

“The Excess Crude Revenue Account was developed at the time we had some semblance of fiscal balance in our economy between 2003 and 2007,” the minister said. “That was when we started saving up to about $20billion. When the crash came in 2008, oil prices fell from about $147 per barrel to about $38 overnight. We were able to go to that pool to smoothen our expenditures.

“We were able to pay salaries and continue to pay for our capital investments in those two or three difficult years (2008 to 2009). That is why the Excess Crude Account, which has metamorphosed into the Sovereign Wealth Fund (SWF), is very important.

“But, we have the governors saying no, it is illegal. In fact, it was a fight to even get $1billion paid into the SWF. We managed to save $20billion the last time, but now the governors are saying it is illegal. So, the country is not able to save, and what is left in the Excess Crude Revenue Account today is only about $3.6billion.

“Every month, we have been dipping hands and sharing it, instead of moving that money into the Sovereign Wealth Account, because the governors say it is illegal. We have shared until it is at the rock bottom. Should the oil price crash today, what it means is that we have no cushion, because $3.6 billion for this economy is nothing that can take us for any length of time.”

The Minister, who spoke on the various components of the government’s current reform agenda, stressed the need for the country to continue to create safety nets in the form of savings in order to cushion any potential negative effects of the volatility in the international oil market on the domestic economy should there be any further depression in the global economy.

In view of recent developments in developed economies such as the United States and Europe, Mrs. Okonjo-Iweala, said the country was facing increasing challenge controlling its expenditure and maintaining fiscal discipline to allow for sufficient money to be left for the development of critical infrastructure that would help position the economy on sustainable path of inclusive growth in the years ahead.

Describing the Federal Government efforts to diversify the country’s economy as the only viable option open to pursue in the face of dwindling revenues from crude oil exports as well as increasing volatility in the global oil market, the minister said ongoing transformation programmes in the agricultural and entertainment industries hold the key to Nigeria’s economic development and competitiveness in the rapidly changing global market.


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  • Ibrahimbello

    Even from a layman’s point savings are always good. But for a nation of more than 120 million people we need more than savings, particularly, where there is absence of basic infrastructure, where even a needle, mosquito coil and similar items are imported. How much can we be saving? How sustainable will it be? I think the problem was that the Federal Government failed to develop the much needed infrastructure between 2003 and 2007 that would have provided a foundation for sustainable growth and at the same increased savings. The infrastructure would have by now led to appreciable growth in real sector and consequently drop in imports that translate to increase in savings. Please let us begin to be realistic and stop the blame game. I strongly believe that if we love our country the solution to our problems is at the tip of our fingures. We continue to pray.

    • Maikilagoaljani

      Ibrahim, you are quite right! I think madam knows better but her eyes don close 4 the world bank job, therefore dancing to the tune of her master.

      • Omoade Nimi

        There is nothing like dancing to the masters here. She raised an alarm about the depletion of the reserve. Is it that a good approach?

  • Lanre

    This is the most annoying piece of garbage and trash I have read in a while. Mrs. Okonjo-Iweala is really very annoying. Why does she always act like she is talking down on people? Why must she always talk like everyone else is a dunce? Nigeria is broke. Because of federalism? I can list ten reasons why Nigeria is broke and it has nothing to do with federalism. And I am not the freaking Minister of Finance and Coordinating Minister in Charge of the Economy. The painful part in all this is that hardworking Nigerians continue to suffer from the mindless reckless corrupt spending in Abuja. Yorubas say Ogun awitele kin paro (The sayings of the elders never fail). Chief Awolowo God Bless you wherever you are. Eyin eniyan mi, e ku suru. (My people I commend you for your patience).

  • Lonelyseason218

    Thank you Lanre. The woman is as annoying as the idiot who employed her and what i still dont get is the hype around Iweala because she clearly knows nothing about managing an economy.

    I can personally list 20reasons why Nigeria is broke starting from our military dictator’s days to the imbecile called obasanjo’s period to the moron called jonathan’s government. Everybody knows why Nigeria is nearly on ground zero and i pray we get to that level fast because that is only when this set of politicians will see and get the reward of been wicked and greedy from Nigerians.

    I’m 100% sure an SSS1 economics student will beat Iweala hands down in a debate…If governors were drawing,what happened to the larger share given to the federal government?Nonsense..Cant figure how she got all her previous appointments!!

    • Word4rmdManger

      May be you should embark on anger management therapy, but failure to do so you will continue suffering from beclouded and sentimental judgement. The world bank presdient job is still in the offing and you may indicate interest in the contest by disclosing your true identity firstly. Better learn how to be civil and respectfull if you ever dream of being celebrated else you will remain in Lonely Seasons all through your life.

    • Omoade Nimi

      I hope the lonely season of your life will not continue. You need to be civil in your approach to issues.

      Go learn how to address issues.

  • Hayatu

    While I agree with the minister, it will be better to put effort to create savings by cutting cost of imports and contracts and other Government expenditures. Today in Nigeria, everybody is going for Government contracts because one is sure to make 70% return on investment. Sometimes you will not spend anything because Government pays upfront. we are spending too much on too little.

  • dantala

    Nigerians pleasen wake up to the reality. Our sister is telling the truth and if nothing is done, very soon we all will be saying, God help us, The sister was right. She did raised the alarm.

  • My_eema

    I think we are now trying to emphasize on the issue of displine and due process- especially on govt spending, given the experience we have on subsidy fraud, pension fund scam and so on. What I am missing here is that the Minister kept saying that the governors were saying its illegal. However, she herself did not say otherwise. Does that mean that the governors are right? If yes, is the minister saying that we should allow {illegally} her to create savings from peoples’ money???

    Why dont she concentrate on the modalities to make it legal then?