Although
a welcome development, it is long overdue. In a democracy, where transparency
is the guiding principle of governance, it is an absurdity to operate a public
accounting system that is not only steeped in rampant corruption, but is also
subject to arbitrariness and abuse. Elimination of these shortcomings is part
of the things the new law would seek to address.
A 2004
creation of the Olusegun Obasanjo Administration, the ECA is defined by an
online financial website, Investopedia, as a Nigerian government “account used
to save oil revenues above a base amount derived from a defined benchmark
price.” Primarily, the ECA was introduced to protect budgets against shortfalls
that might arise from crude oil price volatility. It sought to protect public
expenditure from being patterned on the boom-and-bust cycle of the
international oil market.
However,
the account has over the years become more or less a slush fund which both the
federal and state governments turn to whenever they are broke. For instance, in
2010, when the late President Umaru Yar’Adua was sick and his deputy, Goodluck
Jonathan, was experiencing opposition from a cabal that did not want him to
succeed his ailing boss, the governors, who needed money from the ECA, pushed
for his confirmation as the Acting President so that he could assume the legal
status required to release money for the governors from the ECA.
Also,
in the name of executing various infrastructure programmes, especially in the
power sector, both tiers of government have appropriated money arbitrarily from
the ECA, even without the consent or knowledge of the local governments that
are also part owners of the account. A typical example was the recent approval
that was said to have been given for the withdrawal of $1 billion to buy equipment
for the military in the ongoing counter-insurgency battle against Boko Haram
and other security challenges facing the country.
Although
the concept of saving money for a rainy day seemed quite appealing when it was
first mooted, not carrying the stakeholders along when money is withdrawn has
been a chief source of disagreement among the different tiers of government. At
a point during the tenure of Jonathan, Adams
Oshiomhole, then the governor of Edo State, publicly challenged the then
Finance Minister, Dr. Ngozi Okonjo-Iweala, over alleged
unauthorised withdrawals from the ECA. The then minister also reportedly
claimed that approval for the withdrawal of $2 billion for the payment of fuel
subsidies was unilaterally given by Jonathan, after she had earlier claimed
that it was at the behest of all the stakeholders.
A
visibly angry Oshiomhole was quoted as saying, “You
have heard of the last installment of $4.1 billion that was in the Excess Crude
Account as of November 2014, and from that time till today, we have not – when
I say we (I mean the) federal, state and local governments – touched that
money. We have not agreed to take anything out of it, and yet, it has been
drawn down to about $2 billion, which means $2.1 billion has disappeared.”
Legalising
the ECA will resolve the constitutional question that always crops up over its
existence. For instance, Section 80 (1) of the Constitution says, “All revenues
or other moneys raised or received by the Federation (not being revenues or
other moneys payable under this Constitution or any Act of the National
Assembly into other public fund of the Federation established for a specific
purpose) shall be paid into and form on Consolidated Revenue Fund of the
Federation.” This makes spending of any money that does not pass through the
CRFF – such as the ECA – illegal.
But in
trying to give a legal backing to the ECA, the lawmakers have to thrash out
other areas of conflict, including the rights of the states and local
governments to decide whether they are comfortable with the Federal Government
taking charge of their own share of the money or not. This had in the past led
to a legal tussle, with the states challenging the right of the central
government to keep the former’s share of the money.
Besides,
there is also the small matter of finding a common ground between the two arms
of the National Assembly after the Senate last year passed a resolution
abolishing the ECA through a motion entitled, “The
Excess Crude Account: an illegality and a drain pipe.” During the debate, Rose
Oko, who proposed the motion, said, “For instance, it was reported that the ECA
increased from $5.16 billion in 2005 to over $20 billion in 2008, and decreased
to less than $4 billion by 2010, with no known tracking of its operations.”
Currently, the account has been reportedly drawn down to just $2.3 billion.
For
the ECA to make the right impact, there have to be binding rules regarding the
inflows and outflows of revenues. According to a global oil and gas think tank,
Revenue Watch Institute, whatever law is made should be such that would give
the fund a solid legal standing, spelling out details of revenue inflows, how
and when they can be accessed and for what purpose. “The
steady stream of discretional withdrawals from ECA has occurred as a result of
this failure to institutionalise and protect the saved resources,” the
institute says.
As an
oil producing country, Nigeria has to find a way of managing her resources to
maximise the benefit to the citizenry. Other countries have opted to invest in
a Sovereign Wealth Fund, which has paid off for them. So, if Nigeria has chosen
to continue with the ECA, it has to be done transparently and the withdrawals
have to pass through the normal appropriation process. (Punch)
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