FG Responds to THISDAY’s Report, Explains ECA Depletion

Ndubuisi Francis

The federal government yesterday responded to yesterday’s report by THISDAY on the depletion of the Excess Crude Account (ECA).

The THISDAY report titled, “Nigeria’s Excess Crude Account Shrinks from $35.37m to $376,655,” revealed that the balance in Nigeria’s ECA had depleted significantly.

A communiqué issued at the end of the Tuesday meeting of the Federation Account Allocation Committee (FAAC) for July 2022, indicated that there was a balance of $376,655.09 in the ECA, but did not explain why it was drawn down from the previous balance of $35.7 million.

However, responding to the THISDAY report, the federal government said the funds were used as advance payment for the purchase of patrol vehicles for the Nigerian Navy.

In its Twitter handle, @NigeriaGov, the federal government stated: “The $35 million disbursement from the Excess Crude Account is from June 2022 and is an advance payment for the purchase of brand new Offshore Patrol Vessels (OPVs) for the #NigerianNavy, as part of efforts to consolidate on maritime security gains recorded in the Gulf of Guinea.

“Earlier this year, Nigeria exited the International Maritime Bureau (IMB) Piracy List.

“Most recently, the IMB noted that there were zero actual/attempted piracy and ship-armed-robbery incidents in Nigerian waters in the first half of 2022.”

Quoting the Chief of Naval Staff, Vice Admiral AZ Gambo, the Tweet further stated: “It is heartwarming to note the significant decline in piracy attacks by 77 per cent on Nigerian waters as reflected in the International Maritime Bureau Q3 2021 report… the latest IMB report shows that Nigeria has exited the IMB Piracy List.”

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

During the administration of former President Goodluck Jonathan, there were persistent agitations from many state governors for the total sharing of the accretion into the account which they considered illegal.

Data from the Budget Office of the Federation (BoF) showed that for the 2016 fiscal year, the federal government withdrew N85.17 billion to augment revenue to the three tiers of government, while the sum of N76.25 billion was transferred to the Nigerian Sovereign Investment Authority (NSIA) in 2017.

The government also withdrew the sum of $2.87 billion from the ECA in the 2018 fiscal period to settle various obligations.

The sum of $496.37 million was approved by President Muhammadu Buhari and withdrawn for the purchase of Super Tucano aircraft in 2018.

The president also gave approval for the approval of $380.51 million for the first batch of procurement of critical equipment for the Nigerian Army, Navy and Defence Intelligence Agency (DIA, in the fourth quarter of 2018.

During the same period, the federal government also approved that the sum of $233.29 million be withdrawn for states’ matching grant to the Universal Basic Education Commission (UBEC)