How Government Frittered $22b From Excess Crude Account In 12 Years
Wasteful culture, poor management, corruption, lack of trust between state and federal governments, and worsening fiscal outlook may have played key roles in the depletion of the over $22 billion left in the Excess Crude Account (ECA) some 12 years ago.
In less than 12 years, after the death of former President Umaru Musa Yar’Adua, Nigeria has depleted the ECA from a whopping $22 billion to only half a million dollars, no thanks to the administrations of former President Goodluck Jonathan and the incumbent Muhammadu Buhari.
The Natural Resource Governance Institute (NRGI) had ranked the nation’s ECA as the worst among other 33 sovereign wealth funds of oil countries. The International Monetary Fund (IMF) also rated the account as the world’s second worst after Qatar.
Established in 2004, the ECA was meant to stabilize the economy by buffering the impact of price volatility in oil exports. The difference between the market price of crude oil and the budget benchmark price of crude oil is usually credited in the ECA.
Introduced and built to $9.43 billion before the end of the reign of President Olusegun Obasanjo in 2007, it improved significantly to $22 billion under President Yar’Adua’s. By the end of Jonathan’s administration, it stood at $2.1 billion.
Source: Guardian NG