Economy

Nigeria’s Excess Crude Account Falls to $71.8m from $321m in Four Weeks

Published

6 years ago

20/02/2020

By Adedapo Adesanya

About four weeks ago, Business Post raised an alarm over the declining rate of the amount in Nigeria’s Excess Crude Account (ECA), which stood at $321.4 million as at January 20, 2020.

However, a month after, what is left on the account will leave many asking several government they hope the government of the day will provide answers to. As you read this piece, what is left in the ECA is just $71.814 million, yes, $71.814 million.

At the end of a Federation Account Allocation Committee (FAAC) retreat held in Lagos on Wednesday, the Permanent Secretary in the Federal Ministry of Finance, Budget and National Planning, Mr Mahmoud Isa-Dutse, confirmed this development, but did not disclose the reasons why the ECA has shed over 78 percent in just about 20 working days.

While briefing newsmen on outcome of the event, he said the three tiers of government, comprising federal, states and 774 local government councils, shared a total of N647.353 billion as their allocation from the federation purse for the month of January. The amount shared from FAAC this month was lower than what was disbursed last month from the revenue generated in December 2019. This is totally different from the ECA.

The ECA is meant to keep the excess amount made from the sale of crude oil above the budget benchmark for the year. This year, the cap was put at $57 per barrel, but weak performance of oil at the global market caused by the coronavirus has kept prices below the benchmark, but there have been few times this year prices have gone above $58 per barrel at the market.

When Business Post published its report last month on the ECA, it was stated that amount in the account once rose above $20 billion, but the hunger for the money by state governors resulted in the money being shared. They went to court to force the federal government to allow them have access to the funds meant to be saved for the rainy days.

The ECA created by former President Olusegun Obasanjo in 2004 for saving revenue realised from crude oil sales above the budgeted benchmark price and had once peaked at $22 billion during the administration of the late President Umaru Musa Yar’Adua in 2008.

There are serious concerns over the constant drop in the ECA, with observers warning that if not properly checked by government, the devaluation of Naira will ultimately happen. But the Central Bank of Nigeria (CBN) has maintained that the Naira will not be devalued and to allay fears, it has constantly released forex into the market almost on a weekly basis to defend the local currency, which is stable around N360/$1.

Last month, the Monetary Policy Committee (MPC) of the CBN urged the fiscal authorities to strongly consider building buffers by not sharing all proceeds from the federation account at the monthly FAAC meetings to avert the macroeconomic downturn in the event of an oil price shock.

In the eventuality of a price shock, coupled with shortage in foreign reserves, and decline in the excess crude account, Nigeria could be heading towards another recession in four year.

Economy

Naira Rallies N7.27 on Dollar to N1,372/$1 at NAFEM

Published

32 minutes ago

02/07/2026

Adedapo Adesanya

By Adedapo Adesanya

The Naira further appreciated against the US Dollar by N7.27 or 0.39 per cent to N1,372.41/41 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, July 1 compared with the previous day’s N1,379.68/$1.

The local currency also further improved against the Pound Sterling in the official market by N3.32 to close at N1,821.73/£1 compared N1,825.05/£1, and gained N7.61 on the Euro to sell at N1,565.37/€1 versus N1,572.98/€1.

Meanwhile, the Naira traded flat against the Dollar at the parallel market yesterday at N1,395/$1, and also closed flat at the GTBank FX desk at N1,389/$1.

Interbank FX deals count reduced to 91 from 166, reducing pressures on foreign currency supply at the FX window. A lower number of deals and turnover suggested that bank customers’ Dollar requests eased today, pointing to low demand and alleviating pressure on the Naira.

Nigeria’s gross external reserves closed the first half of 2026 at $51.46 billion following a sequence of additional FX inflows from across key sources, including oil sales.

The market also got affirmations of stronger policy direction as the Central Bank of Nigeria (CBN) continued to sanitise the financial system with the revocation of 46 microfinance banks across the country with immediate effect.

In the cryptocurrency market, the market was positive after the US Federal Reserve Chairman, Mr Kevin Warsh, said inflation risks had eased, giving a market that spent most of June grinding lower its first clear lift in weeks.

Speaking at the European Central Bank’s annual forum in Sintra, Portugal, on Wednesday, Mr Warsh said “inflation risks have come down” while reaffirming the Fed’s commitment to returning inflation to 2 per cent.

Solana (SOL) grew by 3.9 per cent to $78.02, Bitcoin (BTC) rose by 2.5 per cent to $60,385.27, Ethereum (ETH) expanded by 2.3 per cent to $1,623.09, Cardano (ADA) jumped by 2.1 per cent to $0.1542, Ripple (XRP) appreciated by 0.9 per cent to $1.05, Dogecoin (DOGE) increased by 0.7 per cent to $0.0726, and Binance Coin (BNB) soared by 0.4 per cent to $551.50.

On the flip side, TRON (TRX) fell by 0.2 per cent to $0.3154, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

Economy

Aradel, Dangote Cement, Others Pull Back Stock Exchange by 1.65%

Published

2 hours ago

02/07/2026

Dipo Olowookere

By Dipo Olowookere

The gains recorded by the Nigerian Exchange (NGX) Limited on Tuesday were quickly erased on Wednesday after stocks like Dangote Cement, Aradel Holdings, International Breweries and others recorded losses.

Apart from the insurance index, which closed higher by 0.42 per cent, every other sector ended in the red, with the energy space down by 4.41 per cent. The industrial goods segment lost 3.63 per cent, the banking sector depreciated by 1.49 per cent, and the consumer goods counter fell by 0.93 per cent.

Consequently, the All-Share Index (ASI) contracted by 3,729.11 points to 225,690.07 points from 229,419.18 points, and the market capitalisation retreated by N2.393 trillion to N144.825 trillion from N147.218 trillion.

Investor sentiment was bearish after the stock exchange closed the day with 22 appreciating equities and 32 depreciating equities, indicating a negative market breadth index.

Neimeth shed 10.00 per cent to settle at N8.10, Aradel bled by 10.00 per cent to quote at N1,275.80, NASCON crashed by 9.98 per cent to N197.60, International Breweries lost 9.52 per cent to trade at N9.50, and Livestock Feeds slipped by 9.43 per cent to N28.12.

On the flip side, Austin Laz gained 10.00 per cent to sell for N3.30, Guinea Insurance appreciated by 9.89 per cent to N1.00, DAAR Communications rose by 9.60 per cent to N1.37, Regency Alliance expanded by 9.52 per cent to 92 Kobo, and Sovereign Trust Insurance grew by 7.85 per cent to N2.06.

Business Post reports that the level of activity dropped yesterday, and Sterling Holdings led the activity log, with a turnover of 124.6 million units worth N980.6 million. UPDC traded 40.1 million units for N130.4 million, Access Holdings exchanged 36.8 million units valued at N811.6 million, Honeywell Flour transacted 33.8 million units worth N490.1 million, and United Capital sold 28.4 million units for N469.1 million.

At the close of transactions, market participants traded 488.1 million units valued at N14.0 billion in 46,929 deals versus the 966.7 million units worth N40.0 billion executed in 49,579 deals in the previous session, implying a drop in the trading volume, value, and number of deals by 49.51 per cent, 65.00 per cent, and 5.35 per cent, respectively.

Economy

Crude Oil Drops Nearly 2% as Trump Hails Iran Talks

Published

3 hours ago

02/07/2026

Adedapo Adesanya

By Adedapo Adesanya

Crude oil was down by nearly 2 per cent on Wednesday as optimism over US-Iran talks eased supply concerns after US President Donald ‌Trump said discussions in Qatar had gone well.

Brent futures gave up $1.38 or 1.89 per cent to sell for $71.57 a barrel, and the US West Texas Intermediate (WTI) crude lost 92 cents or 1.32 per cent to trade at $68.58 a barrel.

President Trump said on Wednesday that the US was getting along ⁠very well with Iran and that recent meetings in Qatar went well.

“The denuclearisation of Iran is moving along well,” the American President told reporters. “They’ve had very good meetings, and ⁠we’ll see.”

The US and Iran held technical talks in Doha as they seek to agree on the flow of shipping through the Strait of Hormuz and secure a lasting ceasefire, a source with direct knowledge of the talks and an Iranian official said.

The US and Iran have sparred publicly over the meaning of the interim pact, exchanging military strikes over the past week.

Meanwhile, US Vice President JD Vance again signalled that the White House is prepared to use force against Iran if diplomacy fails, raising the stakes around a 60-day memorandum of understanding (MOU) that has halted open hostilities but left the core disputes unresolved.

Crude oil inventories in the United States decreased by 3.8 million barrels during the week ending June 26, according to new data from the U.S. Energy Information Administration (EIA) released on Wednesday. The EIA’s data release follows figures by the American Petroleum Institute (API) that were released a day earlier, which reported that crude oil inventories saw a draw of 6.072 million barrels in the period.

Analysts have cut their 2026 oil price forecasts for the first time since the Iran war began, as the reopening of the Strait of Hormuz eased concerns over prolonged supply disruptions.

Meanwhile, a sub-group of oil-producing countries in the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) will likely agree on a further hike in their output targets from August when they meet on Sunday. The target will increase by about 188,000 barrels per day for August, the same as for June and July.

The seven core OPEC+ members have increased their output quotas from April to July by almost 800,000 barrels per day even as the Iran war led to a sharp drop in production among key members.