The Minister of Finance and Coordinating Minister for the economy, Dr. Ngozi Okonjo-Iweala, has predicted that the nation's Excess Crude Account would rise up to $10 billion by early 2013.
Okonjo-Iweala stated this in Tokyo while briefing journalist on the Nigerian economy at the Annual Meeting of the World Bank and the IMF.
“I strongly feel, and I have shared with the governors, with Mr. President and vice-president who fully support that the Excess Crude Account must be built up to 10 billion dollars. We should strive to do that in the next few months and we keep that as buffer,” she said.
According to her, if the account is built up to 10 billion dollars and it is not touched for a while, it will serve as buffer.
She noted that there was the need to increase the nation’s external reserve, considering the population of the country.
“Our reserves are not huge, we are just building backup; it’s not my place, it is the monetary policy that manages it, but I have discussed with the CBN governor that we need to build up our reserve to 50 billion dollars, if we can," she said.
On infrastructure, she noted that the country needed about 10 billion dollars yearly to tackle its infrastructural challenges, adding that Nigeria would draw from the World Bank’s loan offer with a go-ahead from the National Assembly.
According to Okonjo-Iweala, Nigeria would not draw from the international monetary resources at the moment to tackle the infrastructure challenges.
“We are trying to put our borrowing to really direct it to infrastructure. As you know, we have gone to other sources; the World Bank is helping us with power, so is the African Development Bank," the minister said.
“They are very sympathetic to us, they will like Nigeria to use that money; but if the money stays there and it’s not approved for use, they will have to move it and give it to other countries."
Okonjo-Iweala added that the loan to be taken would be given at zero interest rate, a 40-year repayment period and 10 years of moratorium and only 0.7 per cent commitment charge.
She said that the money would be used for power, water and health care among others, adding that Nigeria could only benefit from the loan if the National Assembly approved.