Nigeria’s Excess Crude Account (ECA) has been depleted by 99 per cent between January 2022 and January 2023. Findings by New Telegraph revealed that as of January 2022, ECA, which stood at $35 million, had been depleted $473,754.57 by January 17, 2023, translating to over 99 per cent dip.
ECA is the Federal Government’s fiscal account created to save revenues—in excess of the budgetary benchmark price generated from oil sales. It was created in 2004 by the administration of Chief Olusegun Obasanjo to serve as an account into which the excess amount of the budgetary benchmark from the sale of crude oil is to be paid into. The essence of the account is to protect planned budgets against shortfalls due to fluctuations in crude oil prices. The account was created to be jointly operated by the federal, state and local government while withdrawals could only be made with the approval of all three tiers of government.
At the National Economic Council (NEC) during the week, it was revealed that Nigeria’s Excess Crude Account stood at $35,868,086.40. The figure was confirmed when the Minister of State for Finance, Budget and National Planning, Prince Clem Agba, made a presentation during the 122nd physical meeting of the Council in Abuja.
The current status of ECA came to light on Wednesday at the maiden meeting of Federation Account Allocation Committee (FAAC) for the month of January 2023. According to FAAC breakdown, while total sum of N990.189 billion was shared to the three tiers (federal, states and local government councils) for December 2022 allocation shared in January 2023, balance in ECA stood at $473,754.57 as of January 17 , 2023. In 2022 budget, price of crude oil was pegged at a benchmark of $57 per barrel. At some point last year, crude oil sold above $100 at the international market especially, at the peak of Russia/ Ukraine war.
Over time, ECA remains a fall back resource pool for the federation to revert whenever there is a shortfall in the statutory revenue on the part of FAAC, or when government is in dire need of carrying out important expenditure. For instance, the sum of $496.37 million was approved by President Muhammadu Buhari and withdrawn for the purchase of Super Tucano aircraft in 2018. In July 2022, balance in ECA stood at $376,655.09 from previous balance position of $35.7 million. Its depletion to $376,655.09 from $35.7 million without a reason from the government sparked reactions from public. The Federal Government, however, issued a statement detailing reasons for ECA’s depletion. Recall that during the administration of former President Goodluck Jonathan, state governors and the Ministry of Finance under the watch of Dr. Ngozi Okonjo – Iweala were neck deep in controversy over sharing of accruals in ECA.
