Senate on Tuesday demanded for the scraping of the excess crude account in the country.
Senate decision was as a result of the motion sponsored by Senator Rose Ojo, PDP, Cross River North, who lamented that the purpose of the account has been defeated.
The motion is entitled, “The Excess Crude Account: an Illegality and a Drain Pipe.”
The account was created in 2004 by the administration of former President Olusegun Obasanjo to provide savings for the country and stabilization for the economy during periods of shortfalls in oil revenue.
However, sponsoring motion against the continuous operation of the account, Senator Oko stated that the operation of the account is against the provision of the 1999 constitution as amended.
She alarmed that the operation of ECA have created room for a pool of fund from revenue accruing to the federation being operated without legal backing.
Oko lamented that from several quarters in 2013, it was reported that $5 billion was missing from ECA, and that $2 billion was withdrawn without authorization.
Elombah.com had reported that the Senate last week indicated it will set up an Ad-hoc Committee to investigate the revenue that accrued from the Excess Crude Account, ECA, amount above the oil benchmark from 2004 to date and Federal government’s utilization, identifying any infractions committed.
Senate also requested the Executive to act in conformity with sections 80 (1-4) and 162 (1-3) of the 1999 Constitution as amended, in its revenue receipt and expenditure; just as the Executive would also be made to Pay the amount above the oil benchmark into the Federation Account in compliance with the Constitution.
The upper chamber raised the alarm that ECA increased from $5.16 billion in 2005 to over $20billion in 2008, and decreased to less than $4billion by 2010 with no known tracking of its operations, adding that at various times and from several quarters in 2013, it was purported that $5billion was missing from the ECA, and that $2billion was withdrawn without authorization;
The Senate may also place the amount in the Sovereign Wealth Fund (SWF) upon the amendment of section 162 of the Constitution and other sectors as deemed appropriate.
The Senators explained that in May 2017, Government announced a resumption of payment into the ECA of $87million ostensibly since May, 2015, arbitrarily, adding that between May, 2015 and August, 2017, about US $122.2million had accrued and ought to have been paid to the ECA.
The lawmakers are not happy with the continued impunity of the ECA and its discretionary operation in contravention of the 1999 Constitution, creating room for imprudence, recklessness and arbitrariness;
The Excess Crude Account (ECA) was set up in 2004, ostensibly to provide savings for the country and stabilization for the economy during periods of shortfalls in oil revenue.
Accruals to the ECA was expected to be the amount above the benchmark of crude oil sales, but Senate is worried that the ECA was not in tandem with sections 80 (1-4) and 162 (1-3) of the 1999 Constitution, which prescribes revenue receipts and expenditure.
The senate have argued that these breaches of the Constitution in setting up and operating the ECA have created room for a pool of funds from revenue accruing to the Federation being operated without legal backing and without any checks and balances, thereby providing loopholes for imprudence and financial recklessness.