Grapevine

How govs spent $50bn excess crude funds – NESG

He recalled that the global financial crisis of 2007 and 2008 had minimal effects on Nigerian firms because the country had a substantial fiscal buffer in the ECA, which greatly shielded it from external economic shocks.

According to him, the Federal Government disbursed the $50bn fund to the 36 state governors between when late President Umaru Musa Yar’Adua died and when former President Goodluck Jonathan took charge.

He said that depleting the fiscal buffer the country had built over a decade shifted the subsidy operations from a savings model to a revenue-based approach, forcing the Federal Government to fund the fuel subsidy through crude oil sales instead of ECA funds.

“Between 1999 and 2010, we operated a savings-based subsidy operation. In other words, we were paying for the subsidy from savings. We were not borrowing to pay the subsidy.”