Senate abolishes Excess Crude Account, shuns probe of $122.2m fraud

The Senate has ruled against the attempt by some senators to influence the setting up of an ad-hoc committee to probe the $122.2m that had accrued from the excess crude account, ECA between May 2015 and August 2017, but which was not paid into the account.

This is just as the upper legislative chamber approved immediate abolition of ECA, an account being used to save oil revenues above a base amount derived from a defined benchmark price

It declared that the account “is alien to the 1999 constitution as amended or any known law in the country”.

The senate resolution followed the adoption of a motion, “The Excess Crude Account: an Illegality and a Drain Pipe”, by Senator Rose O. Oko (PDP Cross River North) and cosponsored by 43 other senators cutting across party and ethnic differences.

One of the prayers on the motion was that the Senate should “mandate an ad-hoc committee to investigate the revenue that accrued from the amount above the oil benchmark from 2004 to date and its utilization, identifying any infractions committed and report back within two months”.

Surprisingly, majority of the senators, including former governors who were part of management of the account in their various states when it was introduced shouted ‘nayes’ while the senate president, Dr. Bukola Saraki, also a former governor quickly ruled in favour of opposition to the probe.

The upper legislative chamber, however, urged the government to pay the amount above the oil benchmark into the Federation Account and appropriate some into the Nigerian Sovereign Investment Authority, NSIA and other sectors in compliance with the constitution.

Senator Oko, while leading debate on the motion, said the senate had observed that between May, 2015 and August, 2017, about US $122.2m had accrued and ought to have been paid to the ECA.

She enjoined the Upper House to place the US $122.2m in the Sovereign Wealth Fund, SWF upon the amendment of section 162 of the Constitution and other sectors as deemed appropriate

She particularly advised the government to act in conformity with sections 80 (1-4) and 162 (1-3) of the 1999 Constitution as amended in its revenue receipt and expenditure, saying that the present administration had in May 2017, announced a resumption of arbitrary payment into the ECA of $87m ostensibly since May, 2015.

According to her, the senate was “deeply saddened by the continued impunity of the ECA and its discretionary operation in contravention of the 1999 Constitution, creating room for imprudence, recklessness and arbitrariness”.

She added that the upper legislative chamber was “very concerned that this is one veritable source of huge revenue leakage in the country”.

The lawmaker informed that ECA was set up in 2004, ostensibly to provide savings for the country and stabilization for the economy during periods of shortfalls in oil revenue, adding that the accruals to the account were expected to be the amount above the benchmark of crude oil sales.

Senator Oko said the Upper House was “further alarmed that a report by the National Resource Governance Institute rates Nigeria’s Excess Crude Account as one of the most poorly managed around the world, where its operation is discretionary and at the whims of the Executive”.

She noted for instance that the ECA increased from $5.16b in 2005 to over $20b in 2008, and decreased to less than $4b by 2010 with no known tracking of its operations.

The lawmaker alleged that “at various times and from several quarters in 2013, it was purported that $5b was missing from the ECA, and that $2b was withdrawn without authorization”.

According to her, Nigeria cannot continue to operate an appreciable quantum of revenue arbitrarily, outside the law with no checks and balances while expecting amendment of section 162 of the constitution to cure the problem of savings for the nation.

In his contributions, Senator Adamu Aliero (APC Kebbi Central) supported the abolition of the ECA which he recalled was introduced during former President Olusegun Obasanjo administration to protect planned budgets against shortfalls due to volatile crude oil prices.

He said if the account, out of which the independent power project, IPP among others were sponsored, is stopped, it would ensure transparency and accountability in revenue generation and payment into the Federation Account.

Senator Mao Ohuabunwa (PDP Abia North) also argued that the ECA should be abolished despite the fact that the country needs to save for the rainy day due to the alleged impunity and arbitrariness in the account’s operation.

He called for the setting up an ad-hoc committee to investigate the revenue that accrued from the country’s oil benchmark from 2004.

Speaking in the same vein, Senator Atai Ali Aidoko (PDP Kogi East) described the present operations of ECA as the “biggest slush fund” in the country, saying one-third of the spending were done with illegality.

But Senator Suleiman Hunkuyi (APC Kaduna North) advised that the National Assembly should look into how to regulate the ECA for surplus funding rather than its complete abrogation.

According to him, the exigency of the time called for the introduction of the account, but agreed that the way it was poorly managed should be urgently addressed.