By WILL CONNORS And PETER WONACOTT

ABUJA, Nigeria—Nigeria has spent more than $27 billion from its oil-windfall savings account in three years, significantly eroding the total and putting the financial health of Africa's most populous country and biggest oil producer under scrutiny ahead of April presidential elections.

Officials here say they spent $27.5 billion from their so-called Excess Crude Account to weather the global financial crisis and to counteract falling oil prices, and that they can account for "every penny" spent.

But analysts say the depletion of the account—combined with dwindling exchange reserves, a rising debt profile and a lack of fiscal transparency — represent financial setbacks for a country that is poised to become Africa's biggest economy by the end of the decade.

The criticism reflects concern that Nigeria could be deprived of funds from much-needed infrastructure projects and maybe forced into financial straits if the price of oil drops sharply. The debate over the government's fiscal responsibility has fed into a contentious presidential-election campaign.

Since 2008 Nigeria has spent $27.5 billion from the Excess Crude Account, and there is now $5 billion in the account from a 2007 high of $20 billion, according to Segun Aganga, the Nigerian Minister of Finance.

"I have nothing to hide," Mr. Aganga said in an exclusive interview Tuesday. "The [excess crude] account was used, it did not disappear. It was used to augment the budget when there was a sustained fall in the oil price."

Some analysts disagree, however, arguing that the amount spent is not commensurate with need.

"With oil prices up again, withdrawals are not justified to stabilize the economy," said Antoine Heuty, the deputy director of New York-based Revenue Watch Institute, a group working to promote financial transparency in governments. "The $5 billion in the ECA is unlikely to provide a strong enough cushion for the economy in case of a new economic shock."

"Political motivations provide a more compelling rationale for the drawdown on the ECA," Mr. Heuty said. "It demonstrates the grip of state governors on fiscal management in the country and spending pressures to influence the outcomes of the upcoming elections. The lack of transparency regarding the size of the withdrawals and the allocation of the funds fuels corruption and the mismanagement of public resources."

Mr. Aganga said that the government can account for "every penny" that came into the account, but he admitted that he has no oversight over how money from the account gets spent once it is distributed to the Nigerian states.

"That is not my job," Mr. Aganga said. "The problem we have is that we do not talk enough, we do not share information. It's a lack of transparency, a lack of adequate disclosure."

Nigeria weathered the global downturn better than most other countries. The International Monetary Fund projected Nigeria's economic growth at 8.5% in 2010, more than twice as fast as the continent's biggest economy, South Africa. It predicted this year, the economy would grow by 7%, thanks in part to the emergence of a consumer class and demand for retail goods, telecommunications and other services.

Mr. Aganga, who is a former Goldman Sachs executive and was appointed finance minister in April 2010, said that $8.2 billion was spent on improving the country's power sector, though that sector remains erratic and leaves the majority of Nigeria without electricity for weeks at a time. He did not provide any additional breakdowns.

The excess crude account, which was never formally passed into law, was established in 2004 by then-Nigerian Finance Minister and current World Bank Managing Director Ngozi Okonjo-Iweala and accrues funds when the world oil price is above a benchmark oil price set in Nigeria's national budget.

In an interview Tuesday, Nigeria's central-bank governor, Sanusi Lamido Sanusi, said a priority was keeping the economy on track. Rejecting recent IMF comments that Nigeria's currency is overvalued, he said the central bank will stick to a stable exchange-rate policy as the country ramps up its economic growth.

The central-bank governor said Nigeria could grow at twice the clip projected by the IMF by overhauling its lackluster infrastructure.


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gej , sanusi and aganga = three blind clueless rats!

i wont be surprised if this country goes begging in the nearest future. 

what a shame!

macjive01:

i wont be surprised if this country goes begging in the nearest future.
what a shame!

As if we re not already a beggerly Nation,,,,

Life just got harder for the poor man

nobody seem interested in the topic. ok, GEJ more power to ur elbows. No more condom, bare-back this time around.

woooooooooooooooooooooooow, smh

fstranger3:

Life just got harder for the poor man

Living poor is hard enough bro, let's not include adjectives that worsen the status quo.