The Federal Government withdrew a total sum of N310.05bn from the Excess Crude Account within the first six months of this year, a document obtained from the Budget Office of the Federation showed.
The 2014 second quarter budget implementation report jointly signed by the Minister of Finance, Dr. Ngozi Okonjo-Iweala, and the Director-General, BOF, Dr Bright Okogu, stated that the amount was used to settle various obligations of the Federal Government due to its inability to meet its revenue targets.
The report indicated that the withdrawals for the first half of this year was significantly lower than the N1.257tn taken from the account within the first six months of 2013.
The ECA was set up in 2004 to serve as a stabilisation and savings account to protect planned budgets against revenue shortfalls due to volatility in crude oil prices.
By isolating government expenditures from oil revenues, the ECA aims to insulate the Nigerian economy from external shocks.
Shortly after the account was set, there was an increase in crude oil prices, which led to the balance in the ECA increasing from $5.1bn to over $20bn by November 2008.
But owing to declining oil revenue, which was caused by pipeline vandalism, oil theft and production shut-ins, the account recorded massive withdrawals, with the balance moving from $20bn in 2008 to $11.5bn at the end of 2012, and $2.5bn in January this year.
The drop in the account had led to disagreements between the federal and state governments, with the latter complaining about the way the account was managed.
But the budget monitoring report stated that while N310.05bn was the total outflows from the ECA, the government was able to ensure that within the period, the sum of N389.72bn was transferred into the account.
A breakdown of the inflow showed that the sum of N158.45bn was transferred into the account in the first quarter, while N231.27bn was paid into the ECA in the second quarter of 2014
The report stated, “The ECA was set up to serve as a stabilisation and savings account. Inflows into the ECA in the second quarter of 2014 amounted to N231.27bn.
“The inflow in the second quarter of 2014 was N72.82bn or 45.96 per cent higher than N158.45bn and N41.88bn or 15.33 per cent lower than the N273.15bn recorded in the first quarter of 2014 and second quarter of 2013, respectively.
“A total of N155.17bn was withdrawn from the account in the second quarter of 2014.”
A breakdown of the outflows of N310.05bn showed that a huge chunk of N213.3bn was used to augment monthly revenue distribution among the three tiers of government, while N93.2bn was withdrawn to pay for petroleum products’ subsidy.
The balance of N3.55bn, according to the report, was transferred into the Special Intervention Fund.