Nigeria\u2019s excess crude account has declined by 89 per cent in the last eight years, moving from $4.1bn in November 2014 to $472,513 in the same period of 2022.<\/p>\n
According to a statement by the Ministry of Finance, Budget and National Planning, on Wednesday, the ECA\u2019s balance as at November 23, 2022, stood at $472,513.64.<\/p>\n
The ECA is the Federal Government\u2019s fiscal account that was created to save revenues\u2014in excess of the budgetary benchmark price\u2014that were generated from oil sales, according to Investopedia, an investment and business dictionary.<\/p>\n
The account, however, has depleted in the last eight years owing to lack of inflows, oil market vagaries and the country\u2019s revenue crunch, according to economists.<\/p>\n
\u201cIt is a simple fact that when you spend money from an account and you are not adding to it, it will deplete,\u201d said Professor of Economics at Covenant University, Ogun State, Jonathan Aremu.<\/p>\n
\u201cFor you to increase the ECA, the oil price must rise above the budgeted price. If it does not, nothing goes in.\u00a0 Also, if what you are spending is higher than what goes in, it depletes. This is the situation,\u201d he further said.<\/p>\n
Brent crude sold at $88.45 per barrel at 4pm on Wednesday.\u00a0 WTI crude, on the other hand, was $81.13 per barrel at the same time.\u00a0\u00a0 Oil benchmark in the 2022 budget was $57, but the current oil prices are still about $30 above the benchmark. However, the ECA has been on the decline in spite of higher oil prices since early 2022 driven by Russia-Ukraine war.<\/p>\n
\u201cThe reality is that the government has been struggling with revenues, particularly at Buhari\u2019s second tenure,\u201d said the Director of Research and Strategy, Chapel Hill Denham, Tajudeen Ibrahim.<\/p>\n
\u201cThey always dip their hands into ECA to support federal, state and local governments,\u201d he said.<\/p>\n
He explained that governors had earlier called for the distribution of ECA, which was not in line with the reason for its creation in 2011.<\/p>\n
\u201cThis is pointing to the fact that it is not backed by the law and that the government is broke,\u201d Ibrahim further said, stressing that the only way out was to pay less attention to oil and more attention to non-oil revenues.<\/p>\n
Nigeria\u2019s excess crude account has declined by 89 per cent in the last eight years, moving from $4.1bn in November 2014 to $472,513 in the same period of 2022. According…<\/p>\n","protected":false},"author":1,"featured_media":101571,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[5],"tags":[],"class_list":["post-101569","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"\n