Abuja, Nigeria - For Nigeria's economy to retain its current stability, the excess crude account which has been depleted to the tune of $4.1billion needs to be jerked up to $5billion, Minister of Finance and Coordinating Minister of Economy, Dr Ngozi Okonjo-Iweala said Monday in Abuja.
Despite “some cash fluctuations in the system,” Okonjo-Iwela assured members of the Nigerian Senate committees on Finance and National Planning that Nigeria is not broke.
The committees were considering the 2015-2017 Medium Term Expenditure Framework (MTEF) as a working document for the 2015 Budget.
'Nigeria has quite enough assets,' said Okonjo-Iweala. 'However that does not mean that we cannot have some cash flow fluctuations. We just have to manage it because we have an economy that is reasonably self-sufficient. We are able to manage ourselves well and everybody is willing to do a few things we should be able to get there.'
Responding to a question on whether the 2015 budget would be a workable one or not, the minister said whatever oil price benchmark will be approved by the National Assembly, the most important thing is for the country to arrive at a price that will give leverage for enormous savings against times like this.
'My belief is no matter what is settled on at this point in time, what is pleasing and that brings us all together is the realisation that what we were trying to say a few years ago has happened. It is happening in front of us and all of us need to come together to find a solution,' she said.
'Whatever the decision will be, even if we agree on another benchmark, we still need measures to be in place because we have no idea on whether the oil price will continue to drop or go up.
'So I think we need to prepare ourselves in two or three scenarios and we can share some of the scenarios that we have been thinking about that will guide our development of those contingency measures,' she explained, recalling the 2008 crisis when oil price fell to between US$38 and $40 per barrel.
At that time, she said that Nigeria had saved up quite a lot of money and was able to draw on savings at least for quite a few months to support the economy.
'We have calculated that in order to help us regain this stability, we need a minimum of about US$ 5 billion.
'It helps to cushion our exchange rate so if we go and withdraw it abruptly beyond that amount it causes a problem. You know we went down to $2 billion last year and then we built it up to $9 billion and there was insistence that we must share, which made it to come down to $2 billion but we later at least build it back to $5billion. Right now we are at $4.1 billion'.