Abolish Excess Crude Account, Senate Tells FG
The Senate has asked the Federal Government to put an end to the excess crude account (ECA).
This was part of resolutions made during the Senate plenary on Tuesday at the National Assembly.
The motion was sponsored by Rose Oko, senator representing Cross River north and 41 other lawmakers.
Oko said the ECA was alien to the constitution or any known law in the country.
She quoted a report by National Resource Governance Institute (NRGI) which rated Nigeria’s ECA “as one of the most poorly managed around the world, where its operation is discretionary and at the whims of the executive”.
Established in 2004, the ECA is an account used to save oil revenues above an amount derived from a defined benchmark price. Its objective is primarily to protect planned budgets against shortfalls due to volatile crude oil prices.
“The ECA is not in tandem with sections 80 (1-4) and 162 (1-3) of the 1999 constitution, which prescribes revenue receipts and expenditure,” Oko said.
“These breaches of the constitution in setting up and operating the ECA have created room for a pool of funds from revenue accruing to the federation being operated without legal backing and without any checks and balances, thereby providing loopholes for imprudence and financial recklessness.
“For instance, it was reported that the ECA increased from $5.16 billion in 2005 to over $20billion in 2008, and decreased to less than $4billion by 2010 with no known tracking of its operations.
“At various times and from several quarters in 2013, it was purported that $5 billion was missing from the ECA, and that $2 billion was withdrawn without authorisation.
“These accusations between tiers of government portrays a financial system that is flawed and without probity. By May 2017, the government announced a resumption of payment into the ECA of $87 million ostensibly since May 2015 arbitrarily. Between May 2015 and August 2017 about US $122.2 million had accrued and ought to have been paid to the ECA.”
The lawmaker said the system is an avenue for revenue leakage, with no checks and balances, adding that the country could no longer operate it.
Oko asked the executive to pay the amount above the oil benchmark into the federation account.
Following the development, the Senate mandated an ad hoc committee to investigate the revenue that accrued from the amount above the oil benchmark from 2004 to date and its utilisation. The committee is expected to report back in two months.