The Needles Controversy Over Excess Crude Account | Independent Newspapers Limited
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The Needles Controversy Over Excess Crude Account

Posted: May 31, 2015 at 12:00 am   /   by   /   comments (0)

The recent controversy around the management of the Excess Crude Account (ECA) between the Federal Government and the State governors under the auspices of the Nigerian Governors Forum (NGF) throws up more questions than answers and therefore needs the urgent attention of Buhari’s administration. 

To be sure, the ECA is an account where savings from oil revenue in the excess of the budget oil benchmark are made to be used for unforeseen exigencies by both federal and states governments. 

But it is unfortunate that media reports recently showed that the NGF had demanded that the former minister of Finance, Dr. Ngozi Okonjo-Iweala explained how an alleged $20 billion from the account was disbursed from May 2013 when money was last disbursed from the account, to April 2015. In a quick defense, Dr. Iweala had argued that the NGS’s demand was rather strange considering that issues of the management of the ECA was always discussed by the State Commissioners of Finance on behalf of their governors at the monthly Federation Accounts Allocation Committee (FAAC) meetings.This according to the former Minister for Finance made their demand for explanation meaningless as there was nothing hidden in the management of the ECA. 

 The controversy had come on the heels of the dwindling federal allocations to the states as a result of the fall in crude oil prices. Indeed   most states cannot meet up with the demands of their recurrent expenditure necessitating calls for a bail out for these states.

Of course, this is not the first time issues relating to the management of the ECA would generate needless controversy. Only in 2013, the sum of $5 billion was alleged to have been missing from the account. 

In fact, the continuous disagreement between the federal government and the States over the sharing of the monies accruing to the ECA is a reflection of a flawed system where the states will always go cap in hand begging the federal government for money to run. Besides, it appears that this system tend to make the states lazy as they do not have aggressive measures in place for Internally Generated Revenue (IGR) as they always rely on federal allocation to run.

Again, although the States allocations from the federation account have been quite low in recent times, the truth is that, there is a high level of profligacy at all levels of government. Even now many of the former governors are alleged to have left office with little or nothing in the treasury of their respective states. Definitely this cannot be allowed to continue.

We therefore urge President Muhammadu Buhari to consider restructuring the culture of sharing accruals in the ECA with a view to addressing the inherent problems permanently. Perhaps the entrenchment of true fiscal federalism, where every federating unit would be in control of what it produces could eradicate such needless controversies regarding the sharing of the ECA. This would also make the states to sit up.