By Sonny Atumah
Vice President Oluyemi Oluleke Osinbajo chaired the 83rd National Economic Council; NEC meeting that approved the withdrawal of US$1 billion from the US$2.3 billion Excess Crude Account, ECA to fight the Boko Haram insurrectionists in north eastern Nigeria. From our recent past there are doubts that the withdrawal would enter the scenario of fantasy. For perceived lack of transparency and accountability trust became a burden for government to make the first responsibility move having prided itself of Boko Haram decimation.
Since the onslaught of this terrorist group security discourse has not just been for securocrats but has become everybody’s business. The Vice President last week (Tuesday) clarified that the NEC approval of US$1 billion was for security architecture holism, including policing in the states, community policing, and not just for Boko Haram.
Many asked what the Excess Crude Account was meant for. The Account, fallout of Nigeria’s Honorary International Investors Council, HIIC established in 2004 during the President Olusegun Obasanjo’s administration, was a Nigerian concept to save revenues above a base amount derived from a bench mark. An excess amount from Nigeria’s 2018 budget proposal based on a benchmark of US$45 for the price of crude oil ordinarily goes to the excess crude account. It swelled from US$5.1 billion in 2005 to US$20 billion in 2008 with a rise in global oil prices.
By June 2010 the account was depleted to less than $4 billion as oil prices dropped, to fund budget deficits. Economists believe the Account insulated the Nigerian economy from external shocks in the global financial crisis of 2007–2008, considered as the worst financial crisis since the Great Depression of the 1930s. The Senate recently passed a motion for the abolition of Excess Crude Account ECA, describing it as an illegality and a drain pipe . A former NEC called for the scrapping of the fund and be replaced with the Sovereign Wealth Fund. Should funds of the excess crude account not be subject of federal and state assemblies’ appropriations? The role of the NEC in approving funds is for the judiciary’s interpretation.
The National Economic Council was established by provisions of the Third Schedule, Part I, Section 153, (Sub sections 18 & 19) of the Nigeria Constitution (1999), as amended. The National Economic Council comprises the Vice-President who shall be the Chairman; the Governor of each state of the federation; and the Governor of the Central Bank of Nigeria established under the Central Bank of Nigeria Decree 1991 or any enactment replacing that decree. Sub section 19 says “the National Economic Council shall have power to advise the President concerning the economic affairs of the Federation, and in particular on measures necessary for the co-ordination of the economic planning efforts or economic programmes of the various governments of the federation.” President Buhari reiterated this on June 29, 2015 when he inaugurated the present NEC.
Again Section14 (subsection 2 b) of the Constitution states that the security and welfare of the people shall be the primary purpose of government. Although this section many claim is non-justiciable, it is a root of our palavering. National problems should be viewed from physical security and social security as they move step for step or in pari passu. A northeastern or northwestern Nigerian child that is deprived of education is vulnerable to mischief. A disenchanted educated youth that cannot be gainfully employed would tend to be at his wits’ end. Be it Boko Haram, Niger Delta militancy, or whatever form, non-state actors take up arms against the state for perceived deprivation or injustice.
Nigeria’s blitzing diversification is yet find economic rhythm because the mindset is still on sharing of proceeds from crude oil. The NEC should rather advise government on how to invest another US$1 billion in process plants to make us an emerging economy like those in the BRICS (Brazil, Russia, India, China and South Africa). One believes that the one billion dollar approval for security would have been an instant endorsement if that amount was to rehabilitate and possibly upgrade the four ailing refineries in Port Harcourt, Warri and Kaduna; that is money invested to create wealth. We may possibly not have had the Yuletide gift of fuel scarcity nationwide.
Rehabilitating and upgrading our refineries are profitable ventures that engender stable polity. Crude oil sales cannot make us an emerging economy but give us the toga of Third World. Downstream investments vertically diversify our economy because we have comparative and competitive advantages in petroleum with about 6000 opportunities to increase our GDP. We have an economy with a paltry N106. 98 billion in the Natural Resources Development Account, N7.78 billion in Stabilisation Account and external reserves of US$38.2 billion.
A sustainable economy is one that creates wealth and jobs. Social security is of prime importance in socio economic development as winning the peace socially is as important as winning a war. This does not diminish the role of our gallant men and women in uniform whose morale should be boosted with better hardware and welfare packages for the sacrifices they make for a better tomorrow.