Former Minister of Education, Mrs Obiageli Ezekwesili and former Director of Department of Petroleum Resources, Olsten Olorunsola have urged the National Assembly to legalise the Excess Crude Account to prevent wastage of oil earnings.
Speaking at a policy dialogue on the savings of stabilisation mechanism for Nigeria recently, Mrs Ezekwesili, who was a pioneer coordinator of the National Stakeholders Working Group (NSWG) of the Nigeria Extractive Industries Transparency Initiative (NEITI), explained that the National Assembly must institutionalise the Excess Crude Account through constitutional amendment. According to her, “There is a need to amend the constitution to ensure having a stabilisation fund because the idea of Crude Account (ECA) was to save money that is in excess of planned expenditure at a time there is a bonus revenue. This is needed to balance out shortage of revenues where there is not enough to execute projects.
The source of revenue of Nigeria is oil whose prices are volatile and with volatility, it is difficult to have economic growth. Therefore, in order to ensure the stability of public investment, nations use best practices of having a set aside fund from their oil proceeds when prices are high. Nigeria has not done this. So, the way forward is to do something with the constitution specifically on Section 162, which expects everything that enters not the federation account to be shared amongst the three tiers of government. So, we must insist as citizens that the ECA, which is a mere political arrangement to have a constitutional mandate, imposed on all our levels of government.
Also speaking, a former Director, Department of Petroleum Resources (DPR), Olsten Olorunsola submitted that having a Petroleum Revenue Management arrangement is not an option for Nigeria if it desires to save excess money that will accrue to the country as oil prices steadily rise in the international crude oil market.
According to him, “There is something that is called ‘Petroleum Revenue Management Act’ across countries round the whole world have it. We wanted to start here in Nigeria, but there is a constitutional bottleneck around that here. That has to happen as we must have a Petroleum Revenue Management Act that is backed by law for it to achieve the purpose it is meant to achieve.”
