Nigeria releases $1b oil money for disbursal

Nigeria’s Acting President Goodluck Jonathan on Friday approved the disbursal of a further $1 billion from the country’s windfall oil savings, leaving about $4.1 billion in the account, government officials said.

The move brings to $3 billion the total amount of Nigerian oil savings that Jonathan has approved for disbursal to the country’s 36 states and government agencies since he took over as acting leader just over a month ago.

It also reduces the level of the OPEC member’s windfall oil savings to less than a quarter of where they stood in 2007, when President Umaru Yar’Adua’s administration took over at the helm of sub-Saharan Africa’s second-biggest economy.

Minister of State for Finance Remi Babalola told reporters the disbursal was meant to fund “urgent national development” projects, but gave no further details.

“The additional $1 billion was distributed today among the three tiers of government for some specific projects so these projects are executed before the rainy season,” Babalola said after a meeting of the committee which allocates the funds.

Jonathan has said maintaining peace in the Niger Delta, where years of underinvestment have fuelled militant attacks on the oil industry, improving Nigeria’s power supply and fighting corruption are among his top priorities.

Nigeria saves any oil revenue above a benchmark price into the account, a pillar of IMF-backed reforms launched in 2003 meant to help insulate it from volatility in global oil prices.

Jonathan took over as Nigeria’s acting head of state on February 9 because of the ill-health of President Umaru Yar’Adua, who recently returned from three months treatment for a heart ailment in a Saudi hospital but remains too sick to govern.

Yar’Adua’s return raised fears of a power struggle at the top of Africa’s most populous nation if his closest aides tried to maintain their influence by trying to sideline Jonathan.

Jonathan’s previous disbursal a month ago of $2 billion from the windfall oil savings to the three tiers of government came days after he took on executive powers with the support of the powerful state governors, parliament and the cabinet.

His critics said the disbursal appeared to be an attempt to quieten those who might otherwise seek to undermine him, a charge government and presidency officials have strongly denied.

The excess crude account stood at over $20 billion when Yar’Adua took over in 2007 but his administration regularly dipped into the account, raising concern about Nigeria’s commitment to fiscal discipline.

Babalola said the latest disbursal would be credited to the accounts of the various tiers of government by March 16.

Source: Reuters