Nigerian gov’t withdrew $1bn from excess oil account for safety: Minister

Nigeria’s government has withdrawn $1 billion from the Excess Crude Account (ECA) to fund security amid depleting oil revenues, an official said on Wednesday. Nigeria Minister of Finance, Budget and National Planning, Zainab Ahmedhe made this revelation while briefing House of Representatives correspondents at the end of the cabinet meeting chaired by President Muhammadu Buhari on Wednesday. Ms Ahmed’s intervention comes amid concerns raised over the ECA’s balance drawdown. Reports said Tuesday that the balance in the account fell significantly from $35.7 million as of June 2022 to $376,655.09 as of July 25, 2022. Reuters said the nation’s accountant general released the figures Tuesday night, but did not explain the reason for the sharp drop. On Wednesday, Ms Ahmed said volatility in the global oil market explained the drop in the ECA balance. “On the subject of the excess crude account, in the last four years, due to the volatility of the oil market, we have not had accumulation in the excess crude account,” he said. “So, what we have had has been spent gradually for different purposes and it is always used in consultation with the National Economic Council, which is the governors because this is a federative account. “The last approval the council gave was the withdrawal of $1 billion to improve security. We’ve been using that and the last tranche of that has finally been released because deployment to security agencies is based on contracts being executed and has been used strictly for that security purpose. Therefore, the use of the account is with the full knowledge of the Governors”. FAAC The drop in the ECA came as the allocation to the federal, state and local governments increased by N121.624 billion, while the FAAC shared a total sum of N802.407 billion for June. The sum of N680.783 billion was shared in the previous month of May and N656,602 in April. However, the increase in June’s allocation was attributed to large increases in the Corporate Income Tax (CIT) and the Oil Profit Tax (PPT), although oil and gas royalties declined marginally. Nigeria relies on oil revenues to fund infrastructure and pay overhead, but has struggled to benefit from rising crude prices due to pipeline vandalism and low production. Last week, details emerged of how Nigeria’s debt service costs exceeded government revenues, raising fears of a debt crisis. Recently, the International Monetary Fund (IMF) has advised Nigeria and other African countries currently experiencing high levels of debt to take proactive steps to restructure their debts in order to avoid fiscal crises. expense framework Meanwhile, the Ministry of Finance, Budget and National Planning presented this Wednesday a project for the country’s spending framework for the next three years. Ms Ahmed said the draft document is for 2023-2025, with an assumed crude oil price of $70 per barrel for 2023, $66 for 2024 and $62 for 2025. It also contained an estimated production rate of 1 .69 million barrels per day by 2023 and 1,813. million barrels per day by 2024 and 2025. She said: “The assumptions we made for the next medium-term framework from 2023 to 2025 is that the price of crude oil will be $70 per barrel by 2023, $66 per barrel by 2024 and $62 per barrel by 2025. “Crude oil production is projected to be 1.69 million bpd for 2023 and 1.813 million bpd for both 2024 and 2025.” Read More Related News Here Let here it in the comment below if you do have an opinion on this; Nigerian gov’t withdrew $1bn from excess oil account for safety: Minister