“I strongly feel and I have shared with the governors, with Mr. President and vice-president who fully supports that the Excess Crude Account must be built up to 10 billion dollars.
“We should strive to do that in the next few months and we keep that as buffer.’’
Those were the words of Nigeria’s Finance Minister Ngozi Okonjo-Iweala, as she briefed newsmen at the annual meeting of the World Bank and the International Monetary Fund in the Japanese capital of Tokyo, on Sunday.
Ms. Okonjo-Iweala said that the amount is to serve as a buffer, adding that the current reserve in funds at the government’s disposal was minimal, especially when the population of Nigeria is taken into consideration.
“Our reserves are not huge,” said the minister, who is also the coordinating minister of Nigeria’s economy, a high-powered position that oversees the national economic planning.
“We are just building backup. It’s not my place, it is the monetary policy that manages it, but I have discussed with the CBN governor that we need to build up our reserve to 50 billion dollars, if we can.
“That will be the desires of the fiscal authorities, so I don’t consider us with the size of the economy and population we have.
“Look at Algeria, their reserve is nearly 200 billion dollars, for a country much smaller than Nigeria,’’ she said.
On infrastructure, she noted that the country needed about 10 billion dollars yearly to tackle its infrastructural challenges adding that Nigeria would draw from the World Bank’s loan offer with a go-ahead from the National Assembly.
She noted that Nigeria would not draw from the international monetary resources at the moment to tackle the infrastructure challenges.
“We are trying to put our borrowing to really direct it to infrastructure, as you know we have gone to other sources, the Word Bank is helping us with power, so is the African Development Bank.
“Those are very concessional resources. The problem we have right now is that the meetings from the World Bank; they are indicating that if we do not pass through external borrowing plan, where we have 1.2 billion dollars, that has been approved.
“They are very sympathetic to us, they will like Nigeria to use that money but if the money stays there and it’s not approved for use, they will have to move it and give it to other countries.’’
Loan acquisitions made by Nigeria will be dedicated towards the improvement of power supply and healthcare. It will also be at zero interest rate, said Ms. Okonjo-Iweala. She also said that the loan would involve a 40-year repayment period and 10 years of moratorium and only 0.7 per cent commitment charge.