The International Monetary Fund has criticised the government of Nigeria for not managing the Excess Crude Account effectively.
The Director, African Department at the IMF, Abebe Selassie , in an interview with Nigerian journalists after presenting the regional economic outlook on the sub-Saharan Africa at the ongoing joint annual spring meetings with the World Bank in Washington DC, explained that though the country had done well with the Sovereign Wealth Funds managed by the Nigeria Sovereign Investment Authority, it decried the poor handling of the Excess Crude Account.
Selassie said, “There have been two Sovereign Wealth Funds in Nigeria. There has been the Excess Crude Account and the Nigeria Sovereign Investment Authority. The NSIA has been run transparently and based on standard best practice and it has been doing a good job.
“The concern that we have is about the ECA, because if you recall that the ECA economically was set up to save resources when oil prices are high, and to be drawn on when oil prices are low. We do not think that the ECA has been doing effectively enough job that way.
“Because you see, when oil prices fell, the economy was very hard in the last couple of years, we feel like much better job could have been done, saving enough more in the ECA when oil prices were at $100 and $120 per barrel.”
Former President Olusegun Obasanjo established the ECA in 2004 to promote savings and every dollar above the annual oil benchmark was deposited in the account.
Lately, the ECA has not lived up to the expectations and purpose for which it was established.
The Obasanjo government built up the ECA to $20bn at the end of its tenure in 2007.
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