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Nigeria’s excess crude fund, external reserves drop

By Omoh Gabriel, Business Editor
LAGOS — Nigeria’s excess crude account has dropped from $20 billion (N3.004 trillion) at the beginning of the year to $11.2 billion (N1.646trn) in June. This implies that in the last six months, the various tiers of government in the federation have shared a total of $9bn (N1.323tr) from that account.

This use of the fund was to beef up revenue allocation to the three tiers of government following the dwindling revenue accruing to the federation account as a result of the global economic recession that has resulted in the fall of prices of crude oil- the major revenue source of the country.

Disclosing the state of the account at the weekend in Sussex, London, the Minister of State for Finance,  Mr. Remi Babalola noted that “the global economic meltdown impacted on Nigeria’s excess crude savings and the external reserves, as both declined from their levels of $20.44 billion (N3.004tr)  and $50.11bn (N7.366tr) in January 2009 to $11.2 billion and $43.46 billion (N6.3886tr)s respectively, as at end of June.”

He reiterated the determination of the government to diversify the economy from oil and gas to other sectors, particularly agriculture.

According to him: “We are addressing the issue of funding through revenue diversification. Our plan is to diversify from oil and gas based economy to other untapped areas such as agriculture and natural resources. Agriculture, however, remains very high on our list as it currently employs 68 per cent of labour force, contributes 40 per cent of GDP and provides 88 per cent of non-oil earnings.”

The minister said the nation requires $100 billion investment in the next 10 years if the country’s Gross Domestic Product is to hit government’s target of  $300bn by 20-2020, meaning an annual investment of $10 billion was needed over the next 10 years by Nigeria to fully tackle infrastructure and attain the top 20 economies by 2020.


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