Excess Crude Account: Like Jonathan, Like Buhari

L-R: President Muhammadu Buhari and Goodluck Jonathan, former president of Nigeria

President Muhammadu Buhari of Nigeria has taken a cue from the immediate past president of the west African country, Goodluck Jonathan, by taking money from the Excess Crude Account (ECA) to share to states in a bid to help ease the financial burden on them.

The bailout by Buhari is timely for the financially-burdened states but negates the reason why the ECA was created in 2004 by former president, Chief Olusegun Obasanjo.

It would be recalled that on Monday that the Federal Government agreed to share about N391bn ($1.7bn) from the Excess Crude Account with state governments following their inability to pay salaries.

“The position is very clear, what we met on ground is what we are going to distribute. What we met on ground is hovering between $1.6bn to $1.7bn, and that is what we are going to distribute among all the three tiers of governments based on the approved formula,” Ahmed Idris, the Accountant General of the Federation said, adding that, FAAC would soon meet to distribute the amount agreed by the states and approved by the NEC meeting last week.

Raymond Omachi, the acting chairman of Fiscal Responsibility Commission (FRC) had frowned at the practice of the federal government to pay subsidy from the ECA or to share to states from the ECA when available funds are not adequate to meet revenue projections.

He said that the ECA was established in 2004 to protect planned budget against shortfalls due to volatile crude oil prices, but that was not how the funds from the account were spent today.

“If the ECA had been properly managed, in accordance with the FRC act, the country will not have been embroiled in the liquidity crisis being presently experienced,” he said.

Omachi said that the FRC Act stated that savings from the ECA should not be accessed until oil price falls below the predetermined level for a period of three consecutive months.

He said that the sum accessed should be limited to the amount that would bring the revenue of government to the level contained in its budget estimates.

Omachi also said that the other acceptable withdrawal from the ECA was to fund capital projects.

He said that over the years, the commission had noticed withdrawal that was contrary to this and had raised alarm severally at the way the ECA was being brazenly depleted.

“In essence, the non-compliance with the relevant sections of the Fiscal Responsibility Act, 2007, is the cause of the financial management problem being experienced by the country in the light of the sliding oil price.

“If the account had been intact, the effect of declining oil price will have been accommodated with the ECA buffer to finance the budget,” he said.

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  • I don't no why we Nigerians are too naive about the dealings of our government, looking out our comment to this article u keep wondering when Nigerians will come out of their dark room. Buhari have just paid back the money he borrowed from Governors to run his campaign & election with our crude oil account & we are here celebrating our foolishness. stop deceiving us with change, is only a change of Government & alphabet from PDP to APC. MY God save us.

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  • when workers are been owed salaries, you people complained, PMB have decided to help out you complain. jona can never be compared to PMB in anyway, for the first time after 6yrs have electricity workers been up their job, in the last govt if u go and report electricity workers for illegal business u re in big trouble ur area ll be in black out for as long as they want but in this dispensation of PMB my street wrote a petition against illegal deal of electricity workers and in less than 24hrs it was resolved a new transformer brought to us with steady power now, this is what we have been pleading for the past 18 months. who said PMB govt is not the best. pls all u bad belle people should allow him work for Nigerians as God have directed him and not for some selfish individuals. God bless Nigeria, God bless PMB

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  • It is very wrong for the federal govt to use money saved or reserved for the rainy day to share for governors who instead of paying their workers used their allocation to rig elections to perpetuate themselves in power or to install their cronies at the expense of their workers and citizens of the state. It is a gross injustice to the governors who have paid salaries up to date. Those who lavished the money should be arrested and made to refund it to the last kobo. Is buhari not seeing the properties and private lets they bought with their allocations? NONSENSE.

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  • If I were Raymond Omachi, the acting chairman of Fiscal Responsibility Commission (FRC), I would have resigned in protest. That is the way to convince the govt of their error. That is the way to go!

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  • Footballesr are called names by fans, bit this danés fan can hardly Rin round the field, ur guess os as gud as mine.

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  • Can somebody tell me the different between GEJ administration and PMB admistration, recall dat PMB is similiar to GEJ. can someone point out the change. I am yet to see Bravo to GEJ

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  • I thought he said the account was illegal. Had the money been shared when it accrued what would he have done this time around. Sincere and honest people praise the right actions of those they do not ordinarily agree with.

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