SPECIAL REPORT: Nigeria’s four seasons of lavishness with N15.46 trillion Excess Crude Fund
In the last fifteen years, the Nigerian government has spent at least $107.4 billion (the equivalent of N15.46 trillion) from the Excess Crude Account (ECA) under the administrations of Olusegun Obasanjo, Umaru Musa Yar Adua, Goodluck Jonathan and incumbent President Muhammadu Buhari.
A Premium Times Centre for Investigative Journalism (PTCIJ) report revealed that Nigeria earned $109.37 billion, approximately N15.274 trillion, as excess crude money between 2004 and 2018. According to the report, the fund reached its peak with a real inflow of $18.16 billion in 2008.
The rise in crude oil prices raised the funds in the ECA three-fold between 2005 and 2008, with the account growing from $5.9 billion in 2005 to over $17 billion in 2008. Other years of boom, in terms of direct inflows into the account, were in 2011 and 2012 with an inflow of $16.19 billion and $13.59 billion, respectively.
After a careful review of the document obtained from the Cash Management Office (CMO) of the Ministry of Finance through the FOI mechanism, PTCIJ has determined that successive administrations, since 2004, have expended an estimated $107 billion out of the $109.15 billion, approximately N15.274 trillion, on various projects/programmes from the ECA. By 2010, the account had fallen to less than $6 billion due to the steep drop in oil prices, mismanagement and budget deficits at all levels of government in Nigeria.
A review of the same data revealed that a claim by the former Minister of Finance, Kemi Adeosun, where she notes that the first payment into the ECA by the Buhari administration was in April 2017, was incorrect. The CMO document revealed that there was a $1.43 billion real inflow in 2016 that included $1.23 billion from Monthly Excess Inflow, $9.68 million from Interest and $189.55 million as Interest and Special Transfer/Refund.
Mrs Okonjo-Iweala, the Finance Minister in the Olusegun Obasanjo administration, committed a similar error when she insinuated Nigeria earned $61.7 billion in five years as excess crude oil money. She quoted the four-year earnings as $18.14 billion, $18.16 billion, $15.19 billion, $8.01 billion and $2.17 billion, consecutively, between 2011 and 2015. The CMO document revealed, however, that the five-year total earnings were actually $42.33 billion annual earnings, a difference of $19.5 billion from the figure quoted by the Finance Minister at the time.
Errors such as the ones committed by both finance ministers are misleading and have consequences on the projections made based on incorrect figures, especially since there have been no full details on the actual inflow/outflow activities on the account until recently
The federal government spent about $12.95 billion from the foreign excess crude revenue account savings on fuel subsidy payments to petroleum products marketers between 2009 and 2014. In 2009 and 2010, the subsidy payments were made to the Petroleum Product Pricing Regulatory Agency (PPPRA) who subsequently paid the marketers.
An analysis of the Excess Crude Account (ECA) spending by categories showed that in the last fifteen years, distribution to the three tiers of government, at the highest, was $61.86 billion. Spending on oil subsidy in the same period was $12.06 billion, debt financing took $15.42 billion and investment on power projects $8.71 billion. The empowerment project popularly known as Sure-P got $5.74 billion while the stabilisation fund, through payments to Sovereign Wealth Fund, was only $1.25 billion. Additionally, the NNPC pipeline and joint ventures operations on gas took $1.51 billion. The other expenditures from the ECA were Security, Transportation and Sundry Contingencies with $496.37 million, $250 million and $100.38 million respectively.
ECA spending contrasts with the Intention of ECA
The Excess Crude Account is a special account established to warehouse excess revenues from the prevailing crude oil price at the international market. Income generated above the approved crude oil benchmark price in the annual budget is saved in the account.
Withdrawal from the account is statutorily subject to the approval of the three tiers of government and the Executive Council of the Federation (FEC). These earnings are meant to be used for the development of the country and serve as a buffer in times of grave economic conditions.
Unfortunately, Nigeria has failed to transform decades of oil earnings into sustainable development, despite being the largest producer and exporter of petroleum in Africa and one of the ten largest producers in the world.
