…As Reps Caucus decries crude oil theft, urges probe of officials
Various Nigerian stakeholders have lamented that the wasteful culture, poor management, corruption, lack of trust between State and Federal Governments as well as a worsening fiscal outlook may have played key roles in the depletion of the over $22 billion left in the Excess Crude Account (ECA) some 12 years ago.
Recall that in less than 12 years, after the death of former President Umaru Musa Yar’Adua, Nigeria has depleted the ECA from a whopping $22 billion to only half a million dollars, no thanks to the administrations of former President Goodluck Jonathan and incumbent Muhammadu Buhari.
Established in 2004, the ECA was meant to stabilise the economy by buffering the impact of price volatility in oil exports. The difference between the market price of crude oil and the budget benchmark price of crude oil is usually credited in the ECA.
Introduced and built to $9.43 billion before the end of the reign of President Olusegun Obasanjo in 2007; it improved significantly to $22 bn under President Yar’Adua. By the end of Jonathan’s administration, it stood at $2.1 bn.
In early 2021, the balance in the ECA was $72.4 million. Despite higher oil prices compared to the budget benchmark, the ECA fell by almost half to $35million in a space of one year. After falling to less than a million dollars last month, Nigeria’s Minister of Finance, Budget and National Planning, Zainab Ahmed, said the Federal Government withdrew $1 billion from the account to fund security.
The Natural Resource Governance Institute (NRGI) had ranked the nation’s ECA as the worst among the other 33 Sovereign Wealth Funds of oil countries. The International Monetary Fund (IMF) also rated the account as the world’s second-worst after Qatar.
Reacting to the alarming rate at which the ECA got depleted, stakeholders in the finance, energy and legal sectors as well as Civil Society Organisations (CSOs) have said that Nigeria’s ECA remained one of the most mismanaged external accounts in the world with a high level of corruption and lack of transparency.
Amid high-level poverty, local and foreign debts, fiscal challenges and the rising cost of living, the stakeholders insisted that the series of withdrawals made from the account have had no effect on the welfare of Nigerians in terms of living standard and infrastructural development of the country.
While admitting that current economic realities in the country do not provide room for saving, some of the stakeholders called for the immediate amendment of the Petroleum Industry Act (PIA) to allow the scrapping of the account, stressing that the excess crude fund is better in the Nigerian Sovereign Investment Authority (NSIA).
An Associate Professor of Law and Director of Abuja School of Social and Political Thought, Sam Amadi, noted that the dwindling of the ECA is an indication of poor leadership, fiscal control and the inability of the government to generate more revenue. He also said the development shows that the Government is frequently bankrupt or lacks the required revenue. According to him, government earnings have dropped significantly to the point that its debts-servicing is more than its revenue; and as such, the ECA will not be buoyant.
Recall also that just a few years into the Buhari administration, a Senator representing Cross River North Senatorial District, Dr. Rose Oko and some 41 senators had called for the scrapping of the ECA, insisting that it had been a drainpipe.
Also, according to the former Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Muda Yusuf, the absence of conviction on the part of the governors in the culture of savings was part of the reasons the ECA had been shrouded in controversies. He noted the contention by the governors over the constitutionality of the ECA, saying that the ECA depletion reflected the quality of fiscal management at all levels of government over the years.
Meanwhile, the minority caucus in the House of Representatives has decried the level of oil theft in the country, which it noted has become an organised racket under the All Progressives Congress (APC)-led administration.
The caucus, in an issued statement in Abuja by its leader, Ndudi Elumelu, said it stands with Nigerians in demanding for an immediate, independent and open investigation into the issue of oil theft in the country, with particular reference to the circumstances that facilitated the reported illegal operation by the 3-million-barrel capacity supertanker, MV Heroic Idun in Nigerian waters to criminally load millions of barrels of stolen crude oil as well as its escape from the nation’s waters.
The lawmakers urged President Muhammadu Buhari to, in the interest of suffering Nigerians, rise to the occasion and take urgent steps to halt the hemorrhaging of the national economy through crude oil theft.
