A Review of the Nigerian Energy Industry

NEC demands details of spending on excess crude account

Godswill-Akpabio30 March 2014 – The National Economic Council (NEC) Thursday requested the federal government to give the details of the spending on Excess Crude Account, ECA, to the states.

Governor Godswill Akpabio of Akwa Ibom State made this known after the NEC meeting presided over by the Vice-President Namadi Sambo in Abuja.

NEC, which is the highest economic decision-making body statutorily presided over by the vice-president with all state governors,had not been held in the last six months.

Other members of the council include the Minister of the Federal Capital Territory (FCT), Attorney-General of the Federation and some ministers.

Akpabio said the Minister of Finance, Dr. Ngozi Okonjo-Iweala, told the council that the fund in the ECA had risen to about $3.5 billion after payments of fuel subsidy and Subsidy Reinvestment Empowerment Programme (SURE-P).

“The NEC meeting holds today, the first in 2014. During the meeting the Minister of Finance, our lady Okonjo-Iweala reported to council the progress in the ECA. “She informed council that as at today, the ECA has risen to about 3.5 billion dollars after payment for fuel subsidy and SURE-P.

“The council deliberated on it and resolved that there was need for expeditious action to be taken to resolve all the legalities surrounding the issues of ECA, particularly the issue of expedition action on the cases pending in court.

“It was also further suggested that at least two separate accounts should be maintained, one for excess crude and the other for SURE-P,” he said. The ECA is an account maintained by the federal government to save oil revenues above a base amount derived from a defined benchmark price. The ECA was established in 2004 and its objective is primarily to protect planned budgets against shortfalls due to volatile crude oil prices.

In 2010, the NEC approved the plan to replace the ECA with a National Sovereign Wealth Fund. Following controversies over the sharing formula and spending procedure of the ECA, the 36 state governors under the aegis of the Nigeria Governors’ Forum, had dragged the federal government to the Supreme Court.

Specifically, the governors are seeking the judicial interpretation of the management of the ECA. On conflicts between farmers and herdsmen, Akpabio said council received a presentation by the National Security Adviser on the incessant conflicts between farmers and pastorialists, highlighting on the challenges and solutions in Nigeria.

“According to the NSA’s presentation, 17 states have been identified as flash points, among which are:- Plateau, Benue, Adamawa, Niger, Bauchi, Nasarawa, Kwara Kaduna, Oyo

“NSA reported to the council that his office is working out an international conference in Nigeria to deal with the situation, adding that an international NGO in Geneva is already working with some communities in Plateau State to find ways of settling the conflicts.

“Council noted that a Committee on Grazing Reserves under the chairmanship of Governor Murtala Nyako is already working to provide solutions to the farmers pastorialists conflicts. “Council also recommended that governor of Benue State should join Nyako as co-chair to fast-track the working of the committee.

“Council resolved that a technical committee be also set up to come up with recommendations on how to manage incessant conflicts between crop farmers and pastorialists, to report within two weeks.

“Committee members are:- Minister of Agriculture – Chairman, Minister of Environment – member, Hon. Minister of Science and Technology – member, Minister of Interior-member, Minister of Water Resources-member, Minister of National Planning, member, NSA – member, DG-NOA – member, representatives of states-member” Akpabio added.
*Jaiyeola Andrews – Agency reports

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