Nigeria's Excess Crude Account Depletes to $35m, as CBN Withdraws $384m in 2wks from External Reserve

Nigeria's Excess Crude Account Depletes to $35m, as CBN Withdraws $384m in 2wks from External Reserve

  • Nigeria’s Excess Crude Account (ECA) which is the oil savings created by president Olusegun Obasanjo is at its all-time low
  • According to the Federal government, the ECA is now at a low of $35 million despite the recent oil prices
  • Also, Nigeria's external reserves continue to deplete as CBN withdrawals daily to defend Naira from further depreciation

Nigeria's excess crude account now stands at a paltry $35.372 million, the lowest level it has been since the account was established in 2004.

This is according to the communiqué issued at the end of a virtual meeting of the Federation Account Allocation Committee (FAAC) for April 2022, the Guardian reports.

ECA is a savings account retained by the Federal Government and is funded by crude oil sales that are higher than the budgeted oil price benchmark.

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Nigeria's Excess Crude Account, CBN external reserve
President Muhammdu Buhari Credit: State House
Source: Facebook

The new figure means that from October 2021 when the account was at $60,857,773.43($60.8m) FG dipped its hands into the ECA account and withdrew $24.98 million.

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When taken back further when the present administration came into power the ECA dropped from $2.2 billion it stood in 2015.

Presidency defends drop in ECA

In defence of the depletion of the account, Tolu Ogunlesi, Special Assistant to President Muhammadu Buhari on Digital and New Media said:

“For those pointing out ECA was $2.1B in 2015, keep in mind $1 billion went to security purchases (incl 12 Super Tucano).
“Part went to Paris Club Refunds to States and a substantial portion invested into the Sovereign Wealth Fund/NSIA.”
Nigeria's Excess Crude Account, CBN
Presidency defends depleting for excess crude account Credit:@toluogunlesi
Source: Twitter

External reserve depletes also

Meanwhile, the latest data from the Central bank of Nigeria has revealed the continued withdrawal from Nigeria’s external reserves.

Read also

Naira firms up at official market but loses at the black market, exchanges at N602 per dollar

The latest data from the CBN website shows that the reserves stood at $39.42 billion on Wednesday, May 4th 2022 compared to the $39.81 billion it stood on April 21.

What this means is that the reserves dropped in two weeks by $384 million.

Naira to crash to N600 per dollar this season as eNaira app’s massive downloads continue

Meanwhile, has reported that while the e-Naira is seeing massive and impressive downloads, the actual Naira is eroding in the official market.

On Monday, December 6, the actual Naira closed at N415 at the official Investors and Exports window.

The eNaira has seen commendable adoption after it was launched in October this year. But experts are not sure if those downloading the app are using it or keeping it for future use or for fun.


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