Olusegun Obasanjo: Nigeria’s Foreign Exchange Reserves Increased from $3.7 Billion to $45 Billion During My Term

Former Nigerian President Olusegun Obasanjo has revealed that he significantly increased the country’s foreign exchange reserves from $3.7 billion to $45 billion during his eight-year term.

In an interview with News Central, Obasanjo explained that he inherited a substantial amount of debt upon taking office, with Nigeria’s debt standing at $36 billion and debt service costs at $3.7 billion.

However, through his persistent advocacy for debt relief from international creditors, the national debt was reduced from $36 billion to $3.5 billion by the end of his term.

At the same time, the country’s foreign exchange reserves increased from $3.7 billion to $45 billion during the same period.

Obasanjo stated, “When I came in 1999, I was met with $3.7 billion in reserves. And as I said, we were spending $3.5 billion to service debt. We did. Eight years later I left with my debt forgiven.”

He further explained, “When I joined, our debt was $36 billion. When I left, paying off the debt and paying off what needed to be paid off, the amount of debt I had left was over $3.6 billion, or about $36 billion to about $3.5 billion to $3.6 billion. At the same time, reserves increased from $3.7 billion to $45 billion.”

Establishment of the Crude Oil Excess Account (ECA)

Obasanjo also announced that he opened the Crude Oil Excess Account (ECA) to manage the budget surplus resulting from crude oil sales, leaving a total balance of $25 billion.

He explained that the budget during his administration was intentionally conservative, which enabled the ECA to save a surplus.

Obasanjo stated, “At the same time, we had a surplus of crude oil, the amount between what we had budgeted to sell the crude and what we were actually selling. In general, we budgeted conservatively. There was about $25 billion. If we add this to our reserves, it comes to $70 billion.”

Depletion of Savings and Rise in Debt

Obasanjo lamented the depletion of savings accumulated in the national treasury after leaving office.

He pointed out that 17 years later, from 2007 to 2024, Nigeria’s international debt was higher than it was in 1999 when his administration sought debt relief.

Obasanjo attributed this situation to financial mismanagement and lack of leadership and accountability in public services.

He stated, “The point is, I left in 2007, and today, just 17 years later, in 2024, that amount of money is gone. Not only that, all the money earned during that period disappeared.”

Obasanjo further stated, “We owe more today than we did when I came to government in 1999. Why? Poor leadership, poor economic management, abundant corruption, wild corruption that is part of poor leadership.”

Nigeria’s Current Financial Crisis

Nigeria has suffered a severe financial crisis in recent years due to poor economic management, soaring debt levels, and rising debt service costs.

• These problems have strained the country’s reserves, tightened its foreign obligations, and depleted its treasury.
• By the second quarter of 2024, Nigeria’s debt had soared to 134.3 trillion yen, the highest in history.
• Data from the Central Bank of Nigeria (CBN) shows that the amount held in the Crude Oil Excess Account (ECA) is only $376,655, reflecting Nigeria’s outlook for declining revenues.
• Current CBN Governor Yemi Cardoso has made it a priority to rebuild a strong reserve base, with foreign exchange reserves increasing to $39 billion and targeting $40 billion by the end of the year.