15 0ctober 2014, Abuja – The World Bank has advised the federal government to increase its fiscal buffers by raising the excess crude account (ECA) to $6.3 billion. –
Finance Minister, Dr. Ngozi Okonjo-Iweala, disclosed this in Washington DC, saying the World Bank tasked the Federal Government on the need to increase its fiscal buffers by building external reserves to about $6.3 billion, up from the present level of $4.1 billion.
Speaking to Nigerian journalists at the end of the 2014 annual meetings, Okonjo-Iweala assured: “we would look at how we would strengthen the buffer. There is no cause for alarm; we are on top of the game. We have to be realistic about our ability to spend.”Instead, she said the nation’s economic management team is working on contingency plans, beginning with analysing various modules and scenarios in terms of oil price shocks.
She said that there had been a contingency plan to ensure that the economy does not suffer in spite the drop in global oil price.
First, we have to realize the dimensions of the situation and we are beginning to do that.
“With the team here, the DG budget, the Central Bank, we are looking at various scenarios. We are running our models in terms of the oil price shocks and so on, even quality shocks.
‘And when you look at contingency scenarios, there are three ways you can manage them,” she said.
According to her, you can either go outside or get resources. But we are not planning to do that. We are not going outside to get resources at this moment, that is the pride that we have had, she added.
She said that government has no plans of such idea now adding that it would look at the revenue and expenditure side to see the level of preparedness in its dealings.