Experts decry depletion of excess crude account
Experts have expressed dissatisfaction over the depletion of Excess Crude Account (ECA), saying, a net expected balance of $84.58 billion was estimated at December 2017, but government declared $2.32 billion.
At a forum organised by Shehu Yar’Adua Foundation in Lagos, they believed that there was lack of transparency, methodology for withdrawals by the government from the account between 2007 and 2017. A financial expert, Bode Longe, said ECA is meant to ensure saving mechanism and financial stability of Nigeria, asking, how oil revenues was spent during the period was questionable.
Longe regretted that N11.579 trillion was unaccounted for, saying, “We are getting the reports of the account but there are no details of expenditures from the revenue, and Nigerians would want to know this.”“Federal government withdrew N359.39 billion from ECA for fuel subsidy. This is illegal because it contravened the purpose of for which it was set up. Governors okay $1 billion to fight insurgency,” he added.
Dr. Obiageli Ezekwesili, former minister of education, said in her presentation that Nigeria had $17 billion, used $12 billion for Paris Club Debt.She explained, “The situation worsened, despite six years of record high oil prices which could have built up foreign reserve to as much as $100 billion, including ECA level of at least $40billion.”
According to her, it is this failure that has warped Nigeria’s capacity to organise its economic governance creditably in order to produce enviable development outcomes like Botswana.“Unlike Nigeria, Botswana has maintained one of the highest growth rates in 1965,and transformed from one of the poorest countries in the world to an upper-middle-income country.”
She further stressed that we have a capital-intensive oil sector, which provides 15 percent of gross domestic product, 95 percent of foreign exchange earnings and 65 percent of budgetary revenues.The former minister therefore, called for amendment of sections 162(1), (2) and (10) of 1999 Constitution, which prescribe modes of sharing the oil revenue of the government as regards ECA.
Prof.Adeola Adenikinju, a Consultant, in his presentation, noted that despite huge revenue accrued to states and local councils; some are still owed salaries of workers and contractors.He also said, recent oil price slump increased the debt burden of states, which in turn made them to put more pressure on the excess crude account, adding, there is oil volatilities and macroeconomic.
“Nigeria has been constantly exposed to shocks in revenue and microeconomic performance due to over reliance on oil proceeds, and drawing balances from stabilisation funds,” he added.
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