Nigeria Content Online

The Excess Crude
Account (ECA) was created and sustained in controversy. Section 162 (1)
of the Constitution on Public Revenue stipulates that, “The Federation
shall maintain a special account to be called ‘the Federation Account’
into which shall be paid all revenues collected by the Government of
the Federation.” However, that did not dissuade former President
Olusegun Obasanjo from going ahead to create the Account in 2004. The
objective was to enable government transfer all revenues earned from
crude oil exports at a price above the budgeted benchmark price
indicated in the annual fiscal appropriation.

Illegal account

On face value, the
objective seemed altruistic, as revenues in the account were supposed
to be saved for the rainy day, to provide succour for government in
times of extreme difficulty. The Revenue Mobilization Allocation and
Fiscal Commission (RMAFC), which has the constitutional responsibility
to supervise and superintend over the allocation of government revenue
has consistently condemned the account as illegal and unconstitutional,
as all revenues are supposed to be pooled in the Federation Account to
be distributed among the component units of the Federation.

This stand was
supported by the Governors Forum, a meeting of all the 36 governors,
which declared that it was an illegal creation and that all money
accruing to government should be shared by all tiers of government and
not kept in any ‘‘illegal’’ account. This stand by the governors is not
entirely selfless as they wanted a ‘‘share’’ of the pie to fund their
own things.

As at 2008, when
average crude oil benchmark price was $108 per barrel, official records
from the Office of the Accountant General of the Federation (OAGF)
indicated that accumulated revenue in the ECA rose to N1,728.48 billion.

However, as at December 2009, the account had been depleted to less than N72.74billion.

As at December last
year, after the Federation Accounts Allocation Committee (FAAC) held a
secret emergency meeting in the twilight of last month to disburse
$1billion (about N150 billion) to the three tiers of government,
Minister of State for Finance, Yawaba Lawan-Wabi, said the balance in
the Account was about $3million,

Earlier in January
2010, $5.5 billion was withdrawn from the Account for projects in the
power sector under the National Integrated Power Projects (NIPP). The
following month, another $2billion was approved by the then Acting
President, Goodluck Jonathan, from foreign ECA for projects to help
stimulate the economy. Another N23.23 billion was disbursed from the
domestic ECA for the settlement of the cost of petroleum products
supply subsidy by the Nigerian National Petroleum Corporation (NNPC).

After the signing
of the 2010 Appropriation Act, total distributable revenue for the
first quarter of the year stood at N1.495 trillion. But, since the
allocation was based on the 2009 oil benchmark of $45 per barrel, the
figure was reduced to about N758.06billion, requiring about N736.985
billion from the ECA to augment. ECA balance as at May was about $4.393
billion.

In June, $2billion
was withdrawn from the foreign ECA, while N36 billion was taken from
domestic ECA for revenue to augment arrears for May. With the creation
of a new excess revenue account created to host all savings in monthly
revenue earnings in excess of a ceiling of about N365 billion pegged as
amount that could be shared by the Federation Accounts Allocation
Committee (FAAC), the balance in the dollar ECA was $3.2billion and
Naira ECA N29billion, while the new excess revenue account held a
balance of N40 billion.

About $179million
was paid in July, bringing the balance in the dollar ECA to
$3.54billion, while another N20 billion went into the domestic ECA,
raising the balance N53.9billion; N75billion was paid into the new
excess revenue account for the month.

In August, another
$2billion was withdrawn from the ECA, apart from $1billion withdrawn
from ECA as seed money for the take off of the proposed Sovereign
Wealth Fund (SWF). Additional $2billion was withdrawn from the ECA the
same month, bringing the balance to about $460 million, while the new
Excess Revenue Account (ERA) climbed to over N112 billion. With about
$387.2 million transferred during the month into the dollar ECA, the
balance came to about $1.16 billion as at last October, while about
N175 billion was transferred into the Excess Development Account (EDA),
and N31.2 billion into Domestic (ECA).

However, by
December, $1billion was withdrawn from ECA and shared to the three
tiers of government during a secret emergency FAAC meeting held on the
twilight of the year.