Raymond Omachi, the acting chairman of Fiscal Responsibility Commission (FRC) has stated that the past administration led by Goodluck Jonathan and its Finance Minister, Ngozi Okonjo-Iweala mismanaged funds in the Excess Crude Account (ECA).
He said that the ECA was established in 2004 to protect planned budget against shortfalls due to volatile crude oil prices, but that was not how the funds from the account were spent.
“If the ECA had been properly managed, in accordance with the FRC act, the country will not have been embroiled in the liquidity crisis being presently experienced,”
he said on Sunday in Abuja during an interactive session with the News Agency of Nigeria (NAN).
Although Omachi did not mention names, he frowned at the practice of the federal government to pay subsidy from the ECA or to share to states from the ECA when funds are not adequate to meet projections.
Omachi said that the FRC Act stated that savings from the ECA should not be accessed until oil price falls below the predetermined level for a period of three consecutive months.
He said that the sum accessed should be limited to the amount that would bring the revenue of government to the level contained in its budget estimates.
Omachi, supported by the commission’s management team, said also that the other acceptable withdrawal from the ECA was to fund capital projects.
He said that over the years, the commission had noticed withdrawal that was contrary to this and had raised alarm severally at the way the ECA was being brazenly depleted.
“In essence, the non-compliance with the relevant sections of the Fiscal Responsibility Act, 2007, is the cause of the financial management problem being experienced by the country in the light of the sliding oil price.
“If the account had been intact, the effect of declining oil price will have been accommodated with the ECA buffer to finance the budget,” he said.
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