‘It’s for security purposes’ — Zainab Ahmed speaks on depletion of excess crude account

Zainab Ahmed, minister of finance, budget and national planning, says state governors, in consultations with the national economic council (NEC), are aware of withdrawals from the excess crude account (ECA).

Ahmed said this on Wednesday at the end of the federal executive council (FEC) presided over by President Muhammadu Buhari.

In a communiqué issued at the end of the federation account allocation committee (FAAC) meeting for July, the federal government said the balance in the ECA dropped from $35.37 million to $376,655 in June, without providing further details.

ECA is the difference between the market price of crude oil and the budgeted price of crude oil in Nigeria’s budget.

It was established in 2004 by the federal government to save for rainy days, stabilise the country’s economy and smooth out the impact of price volatility in oil exports. Since its creation, the ECA has been the subject of controversies and allegations of corruption.

She said the governors, who are joint owners of the accounts, were aware of the withdrawals.

The minister explained that the account has had no accruals in the last four years because of the volatility of the commodity in the international market, adding that withdrawals have always been in consultations with NEC.

“The last approval that was given by the council was the withdrawal of $1 billion to enhance security,” she said.

“We have been utilising that — the last tranche of that has been finally released because deployment to security agencies is based on the contracts executed and it’s been used strictly for that security purpose.

“So, the utilisation of the account is with the full knowledge of the governors.”

However, a source at the FAAC meeting told TheCable that the fund was used to procure two offshore patrol vessels (OPVs) for the Nigerian navy.

The two vessels would be used to combat oil theft, piracy, and smuggling, as well as conduct search and rescue operations.

The source added that the details were reported as a side note during the meeting on Tuesday.

“It’s terrible behaviour though. They didn’t tell the owners of the account, just spent and reported it,” the source said.