An estimate of $1bn is lost to oil thieves monthly – Dr. Ngozi Okonjo-Iweala, Minister of Finance
It is no more secret that the contentious excess crude account is over drawn because of the insistent oil theft going on in the Niger Delta Region these past months. With just $3.59bn left in the account as against $10bn at the beginning of the year, the question is: What happens when the remaining balance is used to augment 2014 budget and the oil theft continues unabashed? Will the country borrow some more? What are the alternatives?

The International Monetary Fund (IMF) on Wednesday in a statement said that the oil theft has adversely affected the export receipts and government revenues and as a result led to the significant diminution of the excess crude account. The statement delivered by Mr. Gene Leon, Senior resident representative in Nigeria scored Nigeria positively on the growth of Real GDP of 6.8 per cent in the last quarter of 2013 due to robust performance in agriculture, services and trade but said that Nigeria could be affected negatively if there is continued loss in oil production or increased security concerns.

The report approved of the current stance of the CBN saying it was appropriate and revealed that inflation declined to 7.8 per cent (end of September, 2013) from 12 per cent at end of 2012 largely owing to lower food prices and monetary policy implemented by the Central Bank of Nigeria. It also said that the exchange rate stability is because the banking sector is well capitalized with low levels of non-performing loans.

“To promote inclusive growth and mitigate the impact of vulnerabilities, ongoing structural and institutional reforms should be pursued resolutely”

“The 2020 vision and the transformation agenda provide a framework for ongoing reforms, including the privatization of the generation and distribution of energy, initiatives to increase food security and viability of agriculture, and programs funded through the Universal Basic Education Commission to improve human capital development”

The statement went on to recommend flexible exchange rate regime, improved financial crisis management capacity and a stable banking system as ways of managing shocks that may arise; and use of fiscal buffers of low and sustained high rate of growth to reduce unemployment and poverty.
The IMF Mission met with Ngozi Okonjo-Iweala, Finance Minister, the CBN Governor, Sanusi Lamido, senior government officials, members of the legislature and representatives of the private sector from November 13th to November 26th 2013.

Article: Uneñ Ameji.

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