17 March 2014

Nigeria: Excess Crude Account Rises to U.S.$3.45 Billion

Following last week's meeting of the Federation Allocation Accounts Committee (FAAC), the Excess Crude Account (ECA) has increased by $1.34 billion.

This is as the Consumer Price Index (CPI) which measures inflation, in February moderated to 7.7 per cent year-on-year from 8.0 per cent the previous month.

According to the National Bureau of Statistics (NBS), the moderation in year-on-year rates in February was as a result of higher year-on-year changes exhibited in February 2013.

The federal ministry of finance made this known yesterday in a statement by the special adviser to Mrs Okonjo-Iweala, Paul Nwabuikwu.

According to him, this brings the total savings in the ECA to $3.45 billion. Before the latest development, there was $2.11 billion in the account.In percentage terms, this represents an increase of about 63.5 per cent.

According to the coordinating minister for the economy and minister of finance, Mrs Ngozi Okonjo-Iweala, the rise in the ECA signals the federal government's commitment to rebuilding the country's fiscal buffers by increasing the savings in the ECA and strengthening the foreign reserves.

The NBS noted that during this period, prices increased by 0.75 per cent on a monthly basis (the second highest price increased observed during the year) compared to a moderated increase in the month-on-month rate of change of 0.5 per cent observed in February 2014.

The NBS also noted that food prices also rose at a relatively slower rate in February 2014.

Food prices, as observed in the Food sub-index, rose by 9.2 per cent year-on-year.

Prices of yams, potatoes and other tubers, vegetables and fruits increased at slower rate in February, while prices of bread and cereals rose at a faster rate during the period. The price of meat products grew at the same rate year-on-year compared to January 2014.

After a brief respite in January 2014, prices in the core sub-index increased at a faster rate in February.

Prices rose by 7.2 per cent year-on-year, higher than the price increase recorded in January by 0.6 percentage points.

The bureau noted that on a monthly basis, prices increased at a slower rate for the second consecutive month, increasing by 0.5 percent in February, marginally lower than the 0.64 percent increase recorded in January.

After a slight increase in January (year-on-year) urban price increases moderated as indicated by the Urban composite CPI.

The index was recorded at 153.0 points in February, a 7.8 per cent increase from levels recorded in February 2013.

The price increase was lower than rates recorded in January by 0.4 percentage points. The corresponding Rural National CPI recorded a 7.7 per cent year-on-year change in February 2014, easing marginally from the rate recorded in January (7.8 per cent).

On a monthly basis, price increases in the Urban All-items index eased for the second consecutive month in February, increasing by 0.5 per cent.

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