Ahmed: Excess Crude Account Not Funded for Four Years 

Deji Elumoye

Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has explained why the nation’s Excess Crude Account (ECA) has depleted to $376,655 saying the account had not been funded in the last four years.

THISDAY had reported Wednesday that the balance in Nigeria’s Excess Crude Account (ECA) had reduced significantly from the $35.7 million it was as of June 2022 to $376,655.09 as at July 25, 2022.

The Finance Minister while answering questions from newsmen Wednesday after the weekly Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari at the State House, Abuja, emphasised that for quite sometime the ECA had remained unfunded.

Her words “On the issue of the Excess Crude Account, in the past four years, because of volatility in the cause oil market, we have not had accrual to the excess crude account”

According to her,  the sum of $1 billion was withdrawn from the account for the procurement of arms in consultation with state governors. 

“So, what we have had, has been gradually used up for different purposes and it is always used in consultation with the National Economic Council, that is the governors, because this is a federation account. 

“The last approval that was given by the council was the withdrawal of $1billion to enhance security. We have been utilizing that. The last tranch of that has been finally released because deployment to security agencies are based on the contracts executed and its been used strictly for that security purpose. 

“So, the utilization of the account is with the full knowledge of the governors.”

Ahmed also disclosed that FEC has approved the 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Papers (MTEF/FSP), setting new parameters ahead of its presentation to the National Assembly.

According to the Minister, the price of crude oil adopted for the MTEF has been pegged at  

$70 per barrel in 2023; $66 in 2024 and $62 in 2025.

 “Crude oil production is projected to be 1.69million bpd for 2023 and 1.813million bpd for both 2024 as well as 2025. We have also projected that the nominal GDP, that the size of Nigeria economy will rise up to N225.5trillion with 95% of this contribution by the non-oil sector while the oil sector will be contributing only 5%. 

And some steady increase from 2024 2025 to reach up to N280.70trillion in 2025. This means that Nigeria continues to retain its position as the largest economy in Africa”, she said.

Ahmed noted that the nation’s economy is doing well against the belief in some quarters, saying that despite realizing the lowest revenues from oil at a time, the administration was able to do more on infrastructure. 

She said: “Let me address a question on the issue of the economy, as to whether the administration has done well. The administration has done very well. 

“I need to remind us all here that in 2015 the administration came on and met a crisis in the oil and gas sector; we had the first lump in crude oil prices and a very significant slump in crude oil production.

“There was a time that the volumes went as low as one million barrels per day. We were able to take measures to reflate the economy and exit recession within three quarters, by the fourth quarter, we’re out of recession. 

“Secondly, we had a second recession due to the COVID-19. That was even a shorter recession and we have seen now up to five quarters of positive growth. So, the economy has been growing despite very, very difficult circumstances. 

“The other thing I need to remind us is that this administration has been able to realize the lowest oil and gas revenue compared to all previous administrations, but it has also been able to do much more in terms of deployment of infrastructure. So, the administration has done well.”

Also yesterday, FEC gave the new national carrier, Nigeria Air, approval to lease  aircraft for it o commence operations shortly.

Aviation Minister, Senator Hadi Sirika, who disclosed this to newsmen, however, refused to state exactly when flight operations will commence adding that the airline will start with three aircraft.

His words: “We are starting with three aircraft, for the first instance, to do the runs and then we progress. 

“As to the make and type, we will be having eventually a mix of the two, the Air Buses and the Boeings. Because every airline that wants to grow big is either or, most of them are either Air Bus or they are Boeing, especially for the Intercontinental and international flights. And this will start as domestic airline. And then it will of course grow to become regional and international also intercontinental. 

“On timeline, is a process we’re progressing. We will announce the commencement date soon.”

He reiterated that the airline will be owned by Nigerians with 51 percent shares while the rest will go to foreign partners.

Sirika said: “I presented two memoranda on national carrier to allow the Nigeria to lease aircraft to start operations. That has been approved by the council. 

“And the second, is the deployment of investigation tool by Accident Investigation Bureau. That tool will permit the accident investigation to be able to decode going ons in flights, and God forbid, should there be a need to investigate the accident or incident, the tool will help them to be able to do so. 

“That procurement is in sum  of 1,506,285.7 euros which is equivalent to N707,962,864.83. This will be including taxes at central bank exchange rate of 472 in Euro with the delivery period of 11 months and is awarded to Messers integrated contract services limited for AIB.”

Sirika stressed that the challenges of the aviation industry in Nigeria, is a global phenomena, which he is confident would be overcome.

According to him: “On the question of how we’re going to pull this through with the hiccups the aviation is facing, well certainly it is a global phenomena. Of course, I’m very sure you are abreast with the going on around the aviation industry. But suddenly it’s not here forever. Aviation is very resilient activity.

“From time before, it always take a deep and then come back up. We saw it in 9/11, we saw it in south, we saw it in global meltdown, we saw it in Pearl Harbor, and so on so forth. So aviation is very resilient. And I think we’ll get out of the problems we are facing. 

“Of  particular reference, yesterday all of you were present when we discussed with the Airline operators of  Nigeria (AON) as to the challenges we’re facing in terms of Jet A1 availability and of course pricing, which is 40% of the operations of the airline. We’re finding solutions to those problems and the cost of funds also is being attended to and so on and so forth. So yes, we will get there. And it’s doable and by God’s grace.”