Nigeria: Why Excess Crude Account Dropped 78% in Two Months - Official

Photo: Pixabay
Oil field
27 February 2020

State governors, who are members of the National Economic Council (NEC), on Thursday explained why the Excess Crude Account (ECA) balance dropped by about 78.2 per cent within two months.

The balance in the ECA declined from $325 million in January to about $71 million as announced at the end of the last Federation Accounts Allocation Committee (FAAC) meeting in Abuja.

The sudden drop in the balance of the account by about $254 million gave rise to speculations that the money in the account may have been misappropriated.

The special account was established to hold savings from excess revenues realised from the export of Nigeria's crude oil at a price above the approved benchmark in the federal budget.

But, representatives of the Nigeria Governors Forum explained that the operation of the account was with their knowledge and due approvals of the NEC.

Speaking on behalf of the governors at the end of the NEC meeting on Thursday, the Ebonyi State Governor, David Umahi, gave reasons for the drop in the balance of the ECA by about $254 million.

"The change in the balance of the ECA from $325 million last January to the current $71 million is mainly due to the new $250 million investment in the Nigerian Sovereign Investment Authority (NSIA), approved by the Council," Mr Umahi said.

"The Authority is doing very well. They are handling infrastructure so nicely that the governors and the federal government are investing well. When the investment was made, both the federal, state and local governments all got their investment certificates. So, we are together in this," he added.

The governor said the other expenditure of $4 million was for the consultancy cost approved by the NEC separate from the $250 million NSIA investment, assuring that no money was missing.

The monthly NEC meeting chaired by Vice President Yemi Osinbajo, is usually attended by the 36 state governors, the Minister of the Federal Capital Territory and the Governor of the Central Bank of Nigeria (CBN).

Earlier, the Minister of Finance, Budget and National Planning, Zainab Ahmed, had reported to the council that the balance in the ECA stood at about $71.8million.

The minister also gave the balance in the Stabilization Account as N34.2 billion, while the balance on the Natural Resources Account is about N101.9 billion.

Also, the Minister of Health, Osagie Ehanire, made a presentation on the handling of Lassa fever by the Nigeria Centre for Disease Control.

Lassa fever has caused over 100 deaths across the country in the past few months.

On the efforts at addressing the disease, the health minister said the National Multi-Sectoral Emergency Operation Centre (EOC) has been activated, while state Health EOCs are activated in affected states to intensify the sensitization of the public on safety measure needs to check the spread of the disease.

Mr Ehanire also assured of the country's readiness to respond to the Coronavirus (COVID-19), saying a multi-sectoral Coronavirus Preparedness Group has been established.

He said four diagnostic testing facilities are ready at the National Reference Laboratory in Abuja, Lagos University Teaching Hospital (LUTH) in Lagos, Irrua Specialist Teaching Hospital in Edo State and Redeemer's University in Osun State.

NEC was also presented an update on the status of the ownership structure of the electricity distribution companies (DisCos) by the council's committee set up for the purpose.

The committee said it received responses from the public, while forensic audit of the DisCos were ongoing, adding there were requests for additional time to complete the report.

The committee said state governments would provide it with details of their investments in the electricity companies.

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