Posted by Gbenga Abiodun on
President Olusegun Obasanjo has explained that the federal government’s decision to create excess crude account with the Central Bank of Nigeria (CBN)....
President Olusegun Obasanjo has explained that the federal government’s decision to create excess crude account with the Central Bank of Nigeria (CBN) outside the normal federation account belonging to the three tiers of government is to keep track of its expenditure in such a way that would not encourage inflation in the system.
The President, yesterday at a breakfast meeting with Mr. Paul Wolfowitz, president of the World Bank, said by keeping the excess crude account, Nigeria has been able to moderate government expenditure, regardless of the amount of receipts from higher oil prices.
“The use of excess crude account has helped us to ensure that high crude oil prices do not lead to higher expenditure. Instead, we use the excess crude earnings to stabilise the budget in the event of a shortfall in earnings, and this has helped keep inflation low”, he said.
State governors have always agitated for the sharing of excess crude earnings rather than keeping it in an escrow account.
Obasanjo told Wolfowitz about the efforts of his administration to fast-track development in the Niger Delta through the Presidential Council on Socio-Economic Development of Coastal States in the Niger Delta as well as the progress achieved in managing the Nigerian economy.
He noted the collapse of the price of major foreign currencies in the parallel foreign exchange market, a feat achieved recently by the CBN’s liberalisation policy in the foreign exchange market.
The president also said his administration has taken various initiatives to promote agriculture and is making efforts to ensure probity, transparency and accountability in the discharge of government business.
Wolfowitz had earlier told the President that he was in Nigeria to assess progress in the nation’s economy and the bank’s projects in Nigeria.
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