Last month, the Senate, by a resolution, scrapped the Excess Crude Account (ECA) set up in 2004, saying, it is illegal and mismanaged, yet the Federal Government still operates it, approving $1Billion to combat security and fight insurgency, from the supposed account.
In a motion raised by Rose Oko (PDP-Cross River) titled: “The Excess Crude Account: An Illegality and a drain pipe”, co-sponsored by 18 other Senators, she had said the ECA was set up to provide savings for the Country and stabilisation for the economy during periods of shortfalls in oil revenue but lamented that the account was illegal and “alien to the 1999 constitution as amended, or any known law in the Country.”
Oko also stated that 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.
“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.
“In 2013, it was purported that $5billion was missing from the ECA, and that $2billion was withdrawn without authorization. These accusations between tiers of government portray a financial system that is flawed and without probity.
“By May 2017, government announced a resumption of payment into the ECA of $87million, ostensibly since May, 2015 arbitrarily. However, between May, 2015 and August, 2017 about $122.2million had accrued and ought to have been paid to the ECA.”
According to her, the National Resources Governance described the ECA as one of the most poorly managed around the world.
Seconding the motion, Senator Adamu Aliero (APC-Kebbi Central), said if the account is abolished, it would ensure transparency and accountability in revenue generation and payment into the Federation account.
The Senate, however, rejected the last prayer in the motion that Senators should mandate an Ad-hoc Committee to investigate the revenue that accrued from the amount above the oil benchmark from 2004 to date and its utilization.
In 2010, Nigeria established the Sovereign Wealth Fund (SWF), to manage and invest deposited funds on behalf of the Government.
Brought into law in 2011 by the Nigeria Sovereign Investment Authority Act, SWF was set up to replace the ECA, secure and protect the Country from future economic instability and unforeseen circumstances, using the country’s excess oil revenues with an initial financing of $1bn USD.
In 2015, President Muhammadu Buhari, ordered all Federal Ministries, Departments, Agencies, as well as other Federal Government owned income-earning entities to open the Treasury Single Account (TSA) and pay-in their revenues, in a bid to promote transparency and accountability.
TSA is a public accounting system using a single account, or a set of linked accounts by government to ensure all revenue receipts and payments are done through a Consolidated Revenue Account (CRA) at the Central Bank of Nigeria (CBN).
The TSA is expected to make the Government have a firm authorization on its finances, close down account that are fake and do not benefit the Government and make money more accountable. But all of these monies seem to exclude the excess made from Crude oil, and for no apparent reason.
The Excess Crude Account is, however, an Administrative arrangement without any legal backing. This makes the Senate resolution more of a suggestion.
