.Nigeria Customs Act Amendment Bill: Finance Ministry, FIRS and the gathering of vultures

Explains Excess Crude Account depletion

As FEC approves MTEF

By Johnbosco Agbakwuru

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said yesterday the nation’s economy was doing well under President Muhammadu Buhari’s administration than previous governments.

She also explained the depletion of Excess Crude Account, ECA, saying it had not been funded for sometime.

Mrs. Ahmed stated this after the Federal Executive Council, FEC, meeting presided over by President Muhammadu Buhari at the Presidential Villa, Abuja, yesterday.

Asked the current status of the economy, she said: “Thank you for that question. First of all, let me address a question on the issue of the economy, as to whether the administration has done well. The administration has done very well.

“I need to remind us all here that in 2015, the administration came on and met a crisis in the oil and gas sector; we had the first slump in crude oil prices and a very significant slump in crude oil production.

“There was a time the volumes went as low as one million barrels per day. We were able to take measures to reflate the economy and exit recession within three quarters.  By the fourth quarter, we were out of recession.

“Secondly, we had a second recession due to COVID-19. That was even a shorter recession and we have seen now up to five quarters of positive growth. So, the economy has been growing, despite very, very difficult circumstances.

“The other thing I need to remind us is that this administration has been able to realize the lowest oil and gas revenue, compared to all previous administrations, but it has also been able to do much more in terms of deployment of infrastructure. So, the administration has done well.”

On the Excess Crude Account, the minister recalled that the sum of $1 billion was withdrawn from it for the procurement of arms, in consultation with state governors.

“On the issue of the Excess Crude Account, in the past four years, because of volatility in the oil market, we have not had accrual to the account.

“So, what we have had, has been gradually used up for different purposes and it is always used in consultation with the National Economic Council, NEC, that is the governors, because this is a federation account.

“The last approval that was given by the council was the withdrawal of $1billion to enhance security. We have been utilizing that. The last tranch of that has been finally released because deployment to security agencies are based on the contracts executed and its been used strictly for that security purpose.  So, the utilization of the account is with the full knowledge of the governors.”

On the council’s approval of the Medium Term Expenditure Franework,, MTEF, the Minister said:  “The assumptions that we made for the next medium term framework from 2023 to 2025 is that crude oil price will be at $70 bpd for 2023, $66 pbd for 2024 and $62 bpd for 2025.

“Crude oil production is projected to be 1.69million bpd for 2023 and 1.813million bpd for both 2024 as well as 2025. We have also projected that the nominal GDP, that the size of Nigeria economy will rise to N225.5trillion, with 95% of this contribution by the non-oil sector, while the oil sector will be contributing only 5%. And some steady increase from 2024, 2025 to reach up to N280.70trillion in 2025.

“This means that Nigeria continues to retain its position as the largest economy in Africa.”

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