Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, has raised the alarm over the depletion of the Excess Crude Account (ECA) from $20 billion in 2006 to $3.6 billion as at Thursday.
She said with a mere $3.6 billion left in the ECA, the country could be in serious economic problem in the event of volatility in the price of oil as witnessed in 2008 when oil prices crashed from $147 per barrel to about $38 per barrel.
The minister, who spoke in Abuja at an interactive session with civil society organisations, also regretted that Nigeria was not benefitting maximally from the high oil prices at the international market due to reduced exports occasioned by pipelines vandalism.
According to her, while the country should reap maximally from the high oil prices, the volume of exports had not been as high as it should be due to pipelines vandalism.
She recalled that before quitting as finance minister in 2006, the ECA was in excess of $20 billion, noting that it was the savings from that account that helped to stabilise the economy in 2008 before oil prices picked up again.
The minister argued that should a volatility of that magnitude in the prices of oil happen again, $3.6 billion would be too little to cushion the likely impact such would unleash on the economy.
Okonjo-Iweala, who stated that the United States of America and Europe accounted for 60 per cent of Nigeria's oil export, stressed that such countries currently face enormous economic problems, which might potentially have adverse effects on the country.
She expressed concern that a situation where the governors have been insistent on sharing the proceeds from the ECA monthly was unhealthy for the economy and needed a rethink to avoid the unpleasant consequences the economy might be plunged into in the event of uncertainties.
Admitting that the governors might be justified in their arguments on constitutionality and fiscal federalism, she said as an oil-producing country, Nigeria should not be an exception where governments at the federal level sets aside some savings for the rainy day.
Although she acknowledged that some states of the federation might have savings in the event of future uncertainties, it was still not enough for nothing to be set aside for the collective interest of all Nigerians.
The minister regretted that apart from the $1 billion seed money transferred to the Sovereign Wealth Fund (SWF), which was created to replace the ECA, the governors' stance that all monies accruing in excess of the budget benchmark should be shared had stalled further payments into the SWF.
She stated that other oil-producing countries like Norway have sovereign wealth funds as fall-back in the event of oil price volatilities, allaying the governors' fears that the SWF could be mismanaged.
According to her, the enabling law setting up the SWF had provided for the inclusion of the governors, civil societies and other reputable bodies in the management of the fund.
"Every state can save but the Federal Government can save for all Nigerians," she said, adding that the governors could insist on accountability in the management of the SWF as a guarantee against their apprehension.
Okonjo-Iweala, who challenged the civil society organisations to rise up in defence of the interest of the Nigerian people, said the Federal Government was desirous of diversifying the economy as part of overall measures to bolster the economy and avoid the negative throw-back of a mono-product economy such as currently witnessed.
On the new electricity tariff, the minister said the Federal Government was approaching the issue with utmost circumspection to avoid negative reactions and the attendant backlash as witnessed in January when subsidy on petroleum motor spirit (PMS) was removed.
The minister said it was for this reason that the Federal Government was taking its time before announcing the new tariffs, adding that investors in the power sector were reluctant to come in until the new tariffs were announced.