coffers of the nation’s Excess Crude Account for the eight-year period
from 2007 to 2014 are unaccounted for, according to findings by
PREMIUM TIMES based on now available data from multiple
government agencies not made public until now.
The ECA accounting has remained perhaps one of the most opaque
public fund mechanisms in the country, puzzling even state governors
who repeatedly challenged former Finance Minister Ngozi Okonjo-
Iweala for lack of transparency and accountability regarding the
organization of the fund.
After a recent National Economic Council meeting in Abuja, a
committee of state governors angrily lashed at Mrs. Okonjo-Iweala,
accusing her office, as supervisors of the fund, of arbitrariness and
probably illegality in the management of a fund meant for the three
tiers of government but which the ministry of finance apparently ran
as a sole federal government fund.
PREMIUM TIMES arrived at its computation based on differentials
between expected accruals and actual withdrawals from the ECA
honey pot.
Based on their reporting, the Nigerian National Petroleum Corporation
[NNPC] and the Central Bank of Nigeria [CBN] claim that for the eight
years in review, no fewer than N23.79 trillion was deposited into the
ECA fund.
In its own accounting, the Federal Accounts Allocation Committee
[FAAC] reported that for the same period, N10.58 trillion was
withdrawn from the fund.
Although no where in the FAAC reporting was the N1.3 trillion ad-hoc
domestic infrastructural investment and capital-intensive spending on
the National Integrated Power Projects [NIPP] indicated, PREMIUM
TIMES accommodated it in its analysis to arrive at the N11.55 trillion
unaccounted ECA revenue.
Our estimate can even be said to be conservative given that we did
not compute what could have accrued to the ECA from crude
allocated to the NNPC for domestic refining, but which almost always
ended up being sold abroad because of the bad shape of Nigeria’s
four refineries.
It is instructive to note that for the first 41 months from January 2007
to May 2010, there was no single public record of transfers into the
ECA by FAAC.
After the questionable 41-month silence on ECA reporting, the FAAC
curiously resumed reporting in June 2010 till the end of the review
period during which N7.16 trillion accrued to the national coffers.
It remains unknown if this unaccounted funds were stolen or
mismanaged and if federal law enforcement authorities are currently
reviewing the process.
The spokesperson for the Economic and Financial Crimes Commission,
Wilson Uwujaren, said he had no information about any ongoing
investigation regarding the ECA.
But concerned by what appeared a lack of accountability in the
management of the account, the National Economic Council [NEC] on
June 29 raised a four-man committee to examine accruals into and
withdrawals from the Federation Account and the Excess Crude
Account from 2012 to May 2015.
Members of the committee are Governors Adams Oshiomhole of Edo
State, Emmanuel Udom of Akwa Ibom, Ibrahim Dankwabo of Gombe
and Nasir El-Rufai of Kaduna.
The panel’s report is still being awaited.
Repeated suggestions by the new Muhammadu Buhari’s
administration that public funds were poorly and corruptly managed
in the recent past appear to necessitate a deliberate, serious and
careful look into the management of public funds by past
administrations.
History of ECA
The ECA was created by the administration of President Olusegun
Obasanjo in 2004 to act as a stabilization fund, closing budget deficits
caused by oil price volatility.
The fund was designed to enable savings for the rainy day.
Since its birth however, the ECA has been bedeviled by controversy.
One major challenge is the legal status of the body and the
constitutional place of the Ministry of Finance in operating both the
FAAC and the ECA. Another problem is the zero transparency
exhibited by various agencies and officials of government charged
with managing the funds over the years.
In recent years, the Ministry of Finance has refused to make public the
detailed withdrawals from and accruals to the ECA, making it difficult
to track budget spending and periodic status of the nation’s treasury.
The overarching constitutional provision demands a legislative buy-in
and approval before any huge withdrawals are made from the FAAC.
Likewise, the excess crude account and its administration recognize
the three tiers of government as owners and decision makers
regarding withdrawals from the account. The third means of checking
the activities on ECA is the oversight performed by the National
Economic Council (NEC).
All these have been consistently abused by the leadership of the
Federal Ministry of Finance thus strapping Nigeria into penury,
incessant contingency loans from International communities, and
ultimately crippling the dividends that would have accrued to this
stabilization mechanism.
In her bid to fend off criticism, Ms. Okonjo-Iweala made effort to give
annual summaries of accruals and withdrawals from the Excess crude
account for a period of 2011 to May 2015.
However, no clear highlights of monthly accruals and monthly
disbursement of the funds to various quarters were provided to
Nigerians.
Greater concerns about ECA
The discrepancies in reporting by the different agencies have been the
most frustrating challenge on the ECA. Going by the NNPC report of
actual oil production and monthly oil price within the period under
review (2007- 2014), Nigeria is expected to have an inflow of ₦23.79
trillion ($166.87 billion).
In the same manner, the monthly FAAC reports by the Office of the
Accountant General reported a total of ₦10.582 trillion ($73.93 billion)
as withdrawals from the Excess crude account (ECA).
However, other reports indicate that the Federal and state
governments agreed and made withdrawals of $8.425billion (₦1.308
trillion) as fund to implement National Integrated Power Project
(NIPP) within the same period.
Cumulatively, total withdrawals of N11.89 trillion ($82.17 billion) was
accounted for as withdrawals from ECA as FAAC distributions, funds
for Sure P and NIPP.
Following this figures, the net expected balance in the ECA as at
December 2014 should be ₦11.9 trillion ($84.52 billion).
However, the Ministry of Finance declared in May 2015 that the actual
balance in the ECA as at December 2014 was $2,060,554,241
(₦344.85billion) . If this figure is anything to go by, a difference of
$82.46 billion (₦11.56 trillion) can be regarded as unaccounted amount
expected to be in the Excess Crude Account.
FULL DETAILS OF UNREPORTED N11.56 TRILLION EXCESS CRUDE ACCRUALS
Annual Oil Production: Budgeted versus Actual Export
The annual benchmark values in barrels for crude oil production as
indicated by appropriation laws during the period were 900million
[2007], 882million [2008], 824.4million [2009] and 846 million [2010].
The benchmark estimate for the remaining years were: 828million
barrels [2011], 892.8million [2012], 910.8million [2013] and
856.8million [2014].
However, the actual annual crude oil export as reported in the
Nigerian National Petroleum Corporation (NNPC) monthly reports
were 792million [2007], 724.5million [2008], 769million [2009] and
864.7million [2010].
The annual export for the remaining years were: 822million [2011],
830.8million [2012], 762milion [2013] and 796.7million [2014].
This is shown in the table below
Year Benchmark Oil Production (bbl) Actual Oil Production
(bbl)
2007 900,000,000 791,826,519
2008 882,000,000 724,479,796
2009 824,400,000 769,195,205
2010 846,000,000 864,702,101
2011 828,000,000 822,082,224
2012 892,800,000 830,772,048
2013 910,800,000 762,045,201
2014 856,800,000 796,654,109
Total 6,940,800,000 6,361,757,203
Table 1: Annual Oil Production from 2007 to 2014
Annual Oil Price: Budgeted versus Actual
However, although the actual amounts of crude oil production were
lesser than the benchmark value (except for 2010), the actual prices of
crude oil were higher than the fiscalised (benchmarked) crude oil
price making.
The benchmark prices set by the Federal government from 2007 to
2014 were $40, $53.83, $45, $67, $75, $72, $79 and $77.50 respectively.
Likewise, going by the data on monthly crude oil price by the Central
Bank of Nigeria, the annual average price of oil were $74.48, $101.14,
$63.9, and $80.92 for 2007 to 2010 while for 2011 to 2014, the average
annual crude oil price stood at $113.76, $113.47, $110.99 and $100.35
respectively.
Year Benchmark Oil Price Actual Oil Price(Annual Average)
2007 $40.00 $74.48
2008 $53.83 $101.14
2009 $45.00 $63.90
2010 $67.00 $80.92
2011 $75.00 $113.76
2012 $72.00 $113.47
2013 $79.00 $110.99
2014 $77.50 $100.35
Table 2: Annual Oil Price from 2007 to 2=014
Annual Oil Revenue and Expected Accruals to ECA (in USD)
Going by the annual market prices, the benchmark (budgeted) prices
and the annual oil production (Tables 2 & 3 above) the actual oil
revenues were $59.24 billion [2007], $72.62 billion [2008], $49.79 billion
[2009], and $70.08 billion [2010].
Also the actual oil revenue for 2011 to 2014 stood at $93.42 billion,
$94.17 billion, $84.57 billion and $80.03 billion respectively.
In the same manner, the corresponding budgeted oil revenue for 2007
to 2010 were $36 billion, $47.48 billion, $37.1 billion, and $56.68 billion .
For 2011 to 2014, the same revenue stood at $62.1 billion, 64.28 billion,
$71.95 billion and $66.4 billion respectively.
With the figures stated above and in table 4 below, the total actual oil
revenue for the eight-year period was $603.91 billion while the total
budgeted oil price was $442 billion .
The annual excess crude proceeds (actual revenue minus budgeted
revenue) are estimated to be $23.24 billion [2007], $27billion [2008],
13.96 billion [2009], and $13.39 billion [2010] respectively.
Also the annualized excess crude proceeds for 2011 to 2014 were
estimated to be $31.32 billion [2011], $29.89 billion [2012], $12.61 billion
[2013], and $15.46 billion [2014] respectively.
By these calculations, the Federal government, from 2007 to 2014
would have realised a sum difference of $166.87 billion as excess crude
net expected balance in the ECA.
This is obtained as excess of actual revenue from crude oil ($603.91
billion) over the gross budgeted crude oil revenue ($442 billion).
This is shown in the table below.
Year Actual Oil
Revenue (a)
Budgeted Oil
Revenue (b)
Excess Crude
Account
(c=a-b)
2007 $59,239,738,446 $36,000,000,000 $23,239,738,446
2008 $72,620,086,011 $47,478,060,000 $27,001,792,263
2009 $49,790,735,102 $37,098,000,000 $13,955,741,897
2010 $70,075,592,001 $56,682,000,000 $13,393,592,001
2011 $93,420,769,109 $62,100,000,000 $31,320,769,109
2012 $94,172,583,273 $64,281,600,000 $29,890,983,273
2013 $84,565,187,083 $71,953,200,000 $12,611,987,083
2014 $80,026,424,293 $66,402,000,000 $15,459,851,348
Total $603,911,115,318 $441,994,860,000 $166,874,455,420
Table 3: Annual Oil Revenue and Expected Accruals to ECA (in USD)
Annual Expected Inflow to Excess Crude Account (in U.S. Dollars and
Nigeria Naira)
The Nigerian National Petroleum Corporation (NNPC) sells its crude in
U.S. dollars, and also remits to the Central Bank of Nigeria (CBN) in
dollars. This explains why revenue accrual and excess crude funds
figures are usually provided in U.S. dollars.
However, CBN deposits the funds into the Federation allocation
account in Naira, leaving room for another level of computation to get
the actual NNPC remittances to CBN in Naira.
The annual average exchange rate of $1 to a Naira, going by the CBN
monthly data on international foreign exchange market (IFEM), for the
period of 2007 to 2014 stood at ₦123.93 [2007], ₦117 [2008], ₦146.82
[2009], ₦148.31 [2010], ₦151.83 [2011], ₦155.43 [2012], ₦155.25 [2013] and
₦156.45 [2014] respectively.
By computing the corresponding Naira value of the actual and
budgeted revenue as given in dollars, it was revealed that a total of
₦23.79 trillion is the expected inflow into the ECA as at December 2014.
This is arrived at by the sum of expected inflow into the ECA from
2007 to 2014 as ₦2.848 trillion , ₦3.129 trillion, ₦2.066 trillion, ₦1.988
trillion ₦4.755 trillion, ₦4.646 trillion, ₦1.958 trillion and ₦2.4 trillion
respectively.
Table 4 below shows detail of the figures
Year Exchange Rate
(USD)
Expected Inflow to
Excess Crude
Account (USD)
Expected Inflow to
Excess Crude Account
(NGN)
2007 $123.93 $23,239,738,446 ₦ 2,848,134,733,464
2008 $117.00 $27,001,792,263 ₦ 3,129,147,007,076
2009 $146.82 $13,955,741,897 ₦ 2,065,965,765,903
2010 $148.31 $13,393,592,001 ₦ 1,988,126,673,193
2011 $151.83 $31,320,769,109 ₦ 4,755,109,947,261
2012 $155.43 $29,890,983,273 ₦ 4,646,453,215,411
2013 $155.25 $12,611,987,083 ₦ 1,958,074,330,008
2014 $156.45 $15,459,851,348 ₦ 2,399,926,504,881
Total $166,874,455,420 ₦23,790,938,177,198
Table 4: Annual Expected Inflow into ECA
Net Expected Balance in ECA
The reports by the Office of the Accountant General (OAGF) as well as
reports by the Federal and state governments agreed that withdrawals
for the National Integrated Power Project (NIPP) in March 2013
revealed that the annual withdrawals from ECA (actual withdrawals)
for 2007 to 2010 were ₦708.93 billion, ₦1.637 tr illion, ₦1.546 trillion, and
₦1.325 trillion respectively.
Also, annual withdrawals for 2011 to 2014 were reported to be ₦1.841
trillion, ₦1.606 trillion, ₦2.905 trillion, and ₦320 billion respectively.
Cumulatively, total withdrawals of ₦11.89 trillion ($82.36 billion) was
accounted for as withdrawals from ECA as FAAC distributions, funds
for Sure P and NIPP.
Following this figures, the net expected balance in the ECA as at
December 2014 should be ₦11.900 trillion ($84.52 billion).
Year Expected inflow to
ECA (a)
Withdrawals from
ECA FAAC
Distribution &
NIPP
(b)
Net Expected Balance in
ECA
(c=a-b)
2007 ₦2,848,134,733,464 ₦708,934,242,999 ₦2,139,200,490,465
2008 ₦3,129,147,007,076 ₦1,637,019,253,447 ₦1,492,127,753,629
2009 ₦2,065,965,765,903 ₦1,546,424,383,686 ₦519,541,382,217
2010 ₦1,988,126,673,193 ₦1,325,445,268,663 ₦662,681,404,530
2011 ₦4,755,109,947,261 ₦1,841,078,872,301 ₦2,914,031,074,960
2012 ₦4,646,453,215,411 ₦1,606,412,995,298 ₦3,040,040,220,113
2013 ₦1,958,074,330,008 ₦2,905,100,000,590 -₦947,025,670,582
2014 ₦2,399,926,504,881 ₦319,943,121,223 ₦2,079,983,383,658
Total ₦23,790,938,177,197 ₦11,890,358,138,207 ₦11,900,580,038,990
Table 5: Net Expected Balance in ECA
Summary of Unaccounted Amount in the Excess Crude Funds
Ms. Okonjo-Iweala through the Ministry of Finance published
summary information on transfer to excess crude account from 2011
to May 2015.
The Minister claimed in the publication that the actual balance in the
Excess Crude Account, as at December to 2014, was $2,060,554,241,
which by the CBN IFEM figures, stood at ₦344.85 billion
(₦344,848,470,446) as shown in Table 6 below.
Recalling from Table 5 above, the expected net balance in the ECA as
at December 2014 was ₦11.901 trillion .
By calculating the difference between the net expected balance in the
ECA (₦11.901 trillion) and the actual balance in ECA as at December
2014 (₦344.85 billion) i.e (₦11,900,580,038,990 – ₦344,848,470,446 ), it is
clear that for the period of 2007 to 2014, a total of N11.56 trillion
(₦11,555,731,568,544) was unaccounted for.
USD NGN
1
Total Expected
Inflow to Excess
Crude Account
$166,874,455,420 ₦ 23,790,938,177,198 a
Less:
Withdrawals from
ECA (NIPP by March
2013)
$8,425,000,000 ₦1,308,012,289,474
Withdrawals from
ECA, (FAAC
Distributions) to FG
and States
$73,930,904,083 ₦ 10,582,345,848,734
2
Total Withdrawals
from ECA: as FAAC
Distributions + Sure P
and NIPP
$82,355,904,083 ₦11,890,358,138,208 b
Net Expected Balance
in ECA as at Dec 2014 $84,518,551,337 ₦11,900,580,038,990
c =
a –
b
Deduct:
Actual Balance in
ECA as at Dec 2014 $2,060,554,241 ₦ 344,848,470,446 d
3 Amount Unaccounted
for in ECA $82,457,997,097 ₦11,555,731,568,544
e =
c –
d
Table 6: Summary of Findings
Authenticity of Data and Verification of Estimated Value
PREMIUM TIMES investigation relied solely on data obtained from
relevant government agencies such CBN, NNPC, OAGF, Budget Office
and Ministry of Finance. Moreover, in order to further verify and
validate the analyzed data, FOI request were made to CBN, Ministry of
Finance Revenue Mobilization and Federation Account (RevFAC) and
the NNPC.
None of the FOI request to the four agencies gave the requested
details as at the time of this report.
As much as these figures were concerned, it is believed from
interrogating the available data from the Office of the Accountant
General (OAGF), that no concrete coordination existed between the
Ministry of Finance and the OAGF.
As identified by the Nigeria Extractive Industry Transparency
Initiative [NEITI] report, the five major ministries, departments and
agencies – CBN, NNPC, RevFAC, OAGF and Ministry of Finance —
consistently gave conflicting figures, thereby confusing the public the
more.
Conclusion
So far, PREMIUM TIMES investigation has shown that ₦11.56trillion
that should have accrued to the Excess Crude Account is unaccounted
for.
It remains to be seen whether the various agencies involved in the
management of the account would open up their books and let
Nigerians understand how they handled and disbursed the funds on
behalf of the Nigerian people.
Source : Premium Times
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