Nigeria’s Rainy Day Oil Revenue Plunges by 10,000%

The Excess Crude Account (ECA) dropped to $376,655.09 at the end of June, from $35.37m in May, amid limited crude exports, biting fuel subsidies, piling debt and a struggling economy. The government’s accountant general released the figures late on Tuesday but did not give a reason for the steep drop. Fuel subsidies have also sapped state coffers including the ECA and in the first four months of this year, Nigeria’s debt servicing costs outpaced public revenue. Tunde Ajileye, partner at Lagos-based risk advisory firm SBM Intelligence said the numbers were proof that Africa’s largest economy is “hurtling towards a fiscal crisis without the buffer that the ECA provided in 2008 to 2010” after the global recession. “The Excess Crude Account, which stood at $2.1billion when President Buhari took over in 2015, has dropped to $376k [now],” he said. “This is in spite of oil prices that have been consistently above the oil price benchmark of the federal budget.” Nigeria, typically Africa’s largest oil exporter, has struggled to benefit from surging crude prices due to pipeline theft and years of underinvestment that have limited oil exports.

SOURCE: AL JAZEERA