Oil savings may be in Pounds, Dollars, Euro
From Madu Onuorah, Abuja
IF the Federal Government agrees with the National Economic Council (NEC), the country's crude oil savings may soon cease to be only in American dollar.
In other words, the United States' (U.S.) currency may stop being the sole currency for denotation of Nigeria's foreign trade accounts. High on the cards as addition to the dollar are the British Pound Sterling and the Euro.
The option to look for other currencies for the denomination of the country's savings follows the continued free fall of the dollar.
The NEC is a meeting of governors with the nation's economic managers under the chairmanship of Vice President Atiku Abubakar.
President Olusegun Obasanjo is expected to be part of next month's meeting of the body, which is expected to take far-reaching decisions on the excess crude oil price windfall.
Akwa Ibom State governor, Victor Attah, yesterday briefed State House reporters after their meeting. He was flanked by his counterparts, Bukola Saraki (Kwara), Ibrahim Shekarau (Kano) and Rashidi Ladoja (Oyo).
Attah said that the Council advised the Federal Government to increase the percentage of Excess Crude Earnings devoted for savings in future when prices would depreciate.
The Presidency had, during the clamour by the governors for sharing the excess crude, put up a benchmark of 50-50 percent sharing formula in which half of the accrued money is shared out at the Federal Accounts Allocation Committee. The other half is saved.
Yesterday's council meeting advised the Federal Government, through the Debt Management Office (DMO) to make open the status of debts owed by states. "We need to know what we owe, when we incurred it, who incurred these debts and for what reason," Attah said.
According to the governor, "the meeting among other things discussed how to handle the issue that is popularly called excess crude. But in the meantime, the National economic management team has been asked to come up with solid proposals about how to manage the issue of this excess crude and the interest that may accrue to any funds that we save."
He continued: "We looked also at the problem of the depreciating value of the dollar, which is what we use in benchmarking for use in savings. We believe (that) we will have to delve into a basket of currencies for keeping or saving our money in future rather than tying it to only one currency. We have the Euro and the Pound Sterling."
Attah disclosed further: "The issue of excess crude took our attention largely and we decided to invite the President to the next NEC meeting so that certain firm decisions could be made on certain aspects of it. So, until that meeting is held, really a lot of what we discussed remains tentative decisions and they will have to be finalised at the next NEC meeting."
On other decisions of the Council, the governor said: "We also actually looked at the fact that there is need to co-operate with the Federal Government and save some of these monies until when prices may crash. These are issues to be discussed with Mr. President. The 50-50 formula of sharing is the first position we want to present to Mr. President. But the issue is, do we need to increase that savings, by saving more next year? Again, these are the types of final decisions when we have Mr. President at the next meeting".
On the issue of debt management, Attah said: "A gulf is emerging between the DMO and some states about the exact amount that is being owed by the various states. We deemed it fit that we need to know when this money was borrowed, who borrowed them and for what purposes because it is becoming popular to attack the office of the governor today to say we spend money recklessly and also borrow recklessly. Yet, we know that a lot of this borrowing took place before we came into office."
He added: "We also agreed that there has to be a monitoring by the committee on the Millennium Development Goals. It was unanimously agreed that just as the Federal Government is doing all it could in this respect, the states too, should redouble efforts at attaining the development goals."
