Build ECA to $6.3bn, World Bank tells Nigeria

The World Bank has advised the Federal Government to increase the Nigerian economy’s fiscal buffers by building the Excess Crude Account to about $6.3bn, up from the present level of $4.1bn, the Minister of Finance, Dr. 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.”

With dwindling oil prices, Okonjo-Iweala emphasised the need for more non-oil collections going forward, saying all loopholes in tax collection must be plugged by the Federal Inland Revenue Service.

She said the FIRS had been given a target of $75bn, out of which $44bn had been collected as of July 2014, with the help of the external consulting firm, McKenzie.

“We need to go back and encourage them to do more. We have to carefully build up the Excess Crude Account.”

The Governor, Central Bank of Nigeria, Mr. Godwin Emefiele, who spoke on the financial sector risks as noted by the World Bank and IMF as areas of concern, gave an assurance that the bank would have to work towards ensuring the nation’s financial system remained sustainable.

This, he said, would be done by strengthening regulations in order to put the identified risk factors under control.

Also fielding questions, the Director, Budget Office, Dr. Bright Okogwu, said the process of presenting and passing the 2015 Appropriation Bill would be seamless.

Already, he said the National Assembly, which just returned from recess, had been given the Medium Term Economic Framework, just as there had been consultations on the basic parameters and areas of priority to ensure that areas of disagreement in the budget passage process were considerably reduced.

Speaking further, Okonjo-Iweala said plans had been concluded to ensure that the Independent National Electoral Commission “delivers a good set of elections and that there would be no cash crunch in the coming months.”

The 2014 annual meetings, she said, focused considerably on the deadly Ebola Virus Disease, with Nigeria lending its voice to making the world realise that it was not a West African problem but a global scourge.

The World Bank, IMF, World Health Organisation, and the United Nations, she said, had agreed to come to the aid of the ravaged countries to give needed help.

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