02 July 2017, Sweetcrude, Abuja – A report by the Natural Resource Governance Institute, NRGI, has accused the Nigerian government of non-disclosure of the rules and practices governing the nation’s Excess Crude Account, ECA.
This was the main reason the report ranked Nigeria’s $2.4 billion account as one of the most poorly governed sovereign wealth funds in the world.
“The government discloses almost none of the rules or practices governing deposits, withdrawals or investments of the ECA,” the report said. It added that the account, along with the other worst performers, is “so opaque that there is no way to know how much may be lost to mismanagement.”
The Nigerian account was ranked alongside the Qatar Investment Authority as the worst in terms of oversight and transparency in NRGI’s index of resource management. NRGI rated 11 sovereign wealth funds, managing least $1.5 trillion in total, as “failing”.
Money from the account – which is rainy day fund – is occasionally used by the government to cover budget shortfalls. In such cases, the money is shared between the federal, state and local governments.
Nigeria also runs the Nigeria Sovereign Investment Authority, with some $1.25 billion under management, but NRGI said it had ranked the ECA due to its larger balance sheet.
The NRGI report ranked Nigeria 55th in overall resource management, with a high score on its taxation ranking helping to balance its last-place finish in sovereign wealth fund management. It scored higher than 70th placed Angola, which is second to Nigeria in African oil exports, while nearby Equatorial Guinea was fifth from the bottom of the table.