This development raises posers on the use and abuse of the Excess Crude Account
It is not surprising that the decision by the National Economic Council (NEC) to spend $1billion from the Excess Crude Account (ECA) to fight Boko Haram insurgency in the Northeast generated a controversy. This account has been contentious since it entered the nation’s fiscal lexicon 13 years ago, created by the Obasanjo administration in 2004 to insulate the budgetary cycle – and indeed the economy – from oil-price-induced volatility. Its provenance and legality are subjects of fierce public debate.
Recently, the Edo State Governor, Godwin Obaseki, at the end of the 83rd meeting of the NEC chaired by Vice President Yemi Osinbajo, announced that the governors had given the Federal Government permission to draw from the account to fight the insurgency.
However, two governors from the opposition Peoples Democratic Party (PDP) –Ayodele Fayose of Ekiti State and Udom Emmanuel of Akwa Ibom State have since demurred – the former claimed that the ruling All Progressives Congress (APC) would use the fund to finance the 2019 re-election ambition of President Muhammadu Buhari, while the latter said that he did not attend the meeting. There have been clarifications by the Vice President that the fund, rather than being for the Boko Haram insurgency alone, was meant to improve the overall security architecture of the country, including policing in the states.
Although enhancing the firepower of our fighting men would, on the surface, seem in order, there are questions on the wisdom in the governors’ offer to defray part of the nation’s defence bills at a time many of them are several months in arrears of wages and pensions. Considering the financial crisis ravaging the states, it makes no sense to further burden them with funding the anti-terror war?
Furthermore, there is the issue of the status of the ECA in the nation’s fiscal matrix, and whether the agreement can replace the strict constitutional requirement for spending public funds.
The Senate may have somewhat resolved the question of the status of the ECA when last month it passed a resolution scrapping its operation, drawing strength, as it were, from the provision of Section 162 (1) of the constitution: “The Federation shall maintain a special account to be called “the Federation Account” into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.” What remains perhaps is a definitive judicial pronouncement.
Also, Section 80 (1 – 4) and Section 120 (1 – 4) make it clear that the sole instrument that legitimises the spending of public funds is the appropriation law. To the extent that the so-called agreement by the governors comes nowhere near the appropriation process, those who insist that the strictures imposed by the constitution be strictly followed obviously have a point.
There is no doubt that the operation of the ECA has been messy. Under the late President Umaru Yar’Adua, for instance, the N5 billion said to have been drawn from the account to fund the power sector went unaccounted for; the same thing happened to the $2 billion drawn from the account during the Goodluck Jonathan presidency ostensibly to procure arms for the military.
It is a good thing that the NEC decision is being challenged in court, notably by the Ekiti State government. That is way to go in order to rest all contentions. As far as we can see, the decision is tantamount to usurping the power of the state legislatures to approve their spending bills.
We wonder why the Federal Government, which is constitutionally responsible for defence, would seek to share this responsibility with the states via an extra-constitutional contraption. Whatever happened to its defence budget? Why not send a supplementary budget to the National Assembly, if necessary?
