Excess crude account depleted by N6.48tn in seven years


In seven years, the Federal Government withdrew the sum of N6.48tn from the Excess Crude Account meant for the ‘rainy day’. However, within the same period, only N4.7tn was transferred into the account; IFEANYI ONUBA reports.

Between January 2012 and December 2018, the Federal Government withdrew a whopping sum of N6.48tn from the Excess Crude Account, statistics obtained from the Ministry of Finance have revealed.

The ECA, which was created by former President Olusegun Obasanjo in 2004 for the purpose of saving oil revenue in excess of the budgeted benchmark, had a balance of $20bn in January 2009.

But persistent demand by states to fund various programmes and the inability of the Federal Government to generate adequate revenue to fund its operation had put pressure on it to draw down the account.

An analysis of the account showed that while N6.48tn was the total outflows from the ECA in seven years, the government was able to transfer N4.73tn into the account in six years.

A further analysis of the withdrawal showed that in 2012, the account recorded total outflow of N2.07tn. Out of this amount, the sum of N1.39tn was used to augment revenue distribution among the three tiers of government.

Similarly, the sum of N483bn was used for fuel subsidy payment while N190.58bn was transferred to special intervention fund.

For the 2013 fiscal period, the sum of N1.99tn was taken out of the account by the Federal Government.

Out of this N1.99tn, about N1.08tn was withdrawn to augment revenue shortfall to the three tiers of government, while N505bn and N405.63bn were used for fuel subsidy payment and special intervention fund, respectively.

For 2014, the account was drawn down by N927.33bn. From this amount, N400.23bn went for fuel subsidy; N303.56bn for revenue augmentation and N223.54bn went into special intervention fund.

In the 2015 fiscal period, the Federal Government gave approval for the withdrawal of N458.14bn from the ECA. From this amount, N359.39bn went into petroleum subsidy payment; N98.19bn was used for revenue augmentation to the three tiers of government.

For the 2016 fiscal period, the Federal Government withdrew the sum of N85.17bn to augment revenue to the three tiers of government, while the sum of N76.25bn was transferred to the Nigerian Sovereign Investment Authority in 2017.

The Federal Government withdrew the sum of $2.87bn from the Excess Crude Account in the 2018 fiscal year, documents obtained from the Budget Office of the Federation revealed.

The document, which was obtained on Friday in Abuja, showed the amount was used to settle various obligations of the Federal Government.

The withdrawal for 2018 is significantly higher than the $250m taken in the 2017 period by about $2.62bn.

Based on the analysis of the figures from the Budget Office, the sum of $1.76bn was withdrawn in the fourth quarter of 2018 by the government for the Paris Club refund to state governments.

The $1.76bn represents about 61 per cent of the entire $2.87bn withdrawn during the 12-month period.

A further analysis of the figures showed that the sum of $496.37m was approved by President Muhammadu Buhari and withdrawn for the purchase of Super Tucano Aircraft.

The withdrawal of the amount, according to the Budget Office, was made in the first quarter of 2018.

Similarly, the President gave approval that the sum of $380.51m be withdrawn for the first batch of procurement of critical equipment for the Nigerian Army, Navy and Defence Intelligence Agency.

The withdrawal of the $380.51m according to the document was made in the fourth quarter of 2018.

In the same vein, the Federal Government also gave approval that the sum of $233.29m be withdrawn for states matching grant to the Universal Basic Education Commission.

The amount was taken out of the ECA in the fourth quarter of 2018.

The account also incurred bank charges of $122.23 during the 12-month period.

In terms of inflows, the ECA recorded deposit of N2.31tn in 2012, N855.41bn in 2013, N796.7bn in 2014, N48.94bn in 2015, N242.72bn in 2016, N151.54bn in 2017 and $1.08bn or N329.4bn in 2018.

The inflows of $1.08bn came in through two major sources. They are transfers made to excess crude oil account in the sum of $1.06bn while the balance of $22.18m came in through accrued interest on fund investment.

However, the total inflow of $1.08bn for 2018 was significantly higher than the $151.54m received in 2017 by $928.46m.

The Registrar, Chartered Institute of Finance and Control, Mr Godwin Eohoi, said that the country’s over dependence on oil had been having a lot of pressure on the ECA.

He said since the country had comparative advantage in many sectors of the economy, there was a need to come up with deliberate policies that would improve non-oil revenue.

He said, “We have so much depended on oil to the extent that it is hurting our economy and this shouldn’t be the case.

“Nigeria would have been one of the greatest countries if we had effectively managed our resources. We have so many resources especially in the agricultural sector.”

Eohoi said for the sole reason that crude oil sales would give quick money, attention was shifted to the sector, adding that this shouldn’t have happened.