It is either Nigeria continue to live in fool’s paradise by spending everything it gets as venue or wake up and build its Excess Crude Account (ECA) to avoid borrowing in future to make ends meet.
This was the submission of the World Bank, financial advisers to governments as international crude oil prices plummet, and Nigeria faces a possible gloomy future.
The World Bank has advised the Federal Government to increase the Nigerian economy’s fiscal buffers by building the Excess Crude Account to about $6.3 billion, up from the present level of $4.1 billion, the Minister of Finance, Ngozi Okonjo-Iweala, has said.
Okonjo-Iweala, who spoke to journalists at the end of the World Bank Annual Meetings in Washington D.C, United States on Sunday, gave an assurance that the government would work to raise its buffers.
“We will look at how we will strengthen the buffers. There is no cause for alarm; we are on top of the game. We have to be realistic about our ability to spend,” she said.
Already, the minister said the nation’s economic management team was working on contingency plans, beginning with analysing various modules and scenarios in terms of oil price shocks.
According to Okonjo-Iweala, the World Bank Group at the meetings deliberated extensively on the very uncertain mode of the global economy, which is expected to grow at just 3.8 per cent for 2015.
She recalled that the World Bank and the International Monetary Fund had on Saturday emphasised the need for countries in Nigeria’s category to prepare contingency plans in the face of slower global economic growth and lower oil prices.
One way the World Bank suggested, according to the minister, is for Nigeria to build its fiscal buffers, adding, “We need to continue our structural reforms just like in the Eurozone.”