Excess Crude Account: FRC Urges Constitutional Amendment

The acting Chairman,
Fiscal Responsibility Commission (FRC) Mr Victor Muruako says, the Nigerian constitution needs to be amended to state clearly, the terms and conditions for withdrawal from the Excess Crude Account (ECA).
Muruako said this yesterday in Abuja at a one-day Sensitisation programme on Continuous Audit with the theme Continuous Audit: A tool for ensuring transparency and accountability in government financial business.
He said that the constitution should be amended to incorporate ECA as part of section 162 dealing with the operation of the federation account.
He said that this was necessary to safeguard the ECA from withdrawals outside the purpose for which the account is maintained.
The Tide source recalls that the Excess Crude Account was established in 2004 and its objective is primarily to protect planned budgets against shortfalls due to variance in crude oil prices.
By delinking government expenditures from oil revenues, the Excess Crude account aims to insulate the Nigerian Economy from external shocks.
However, the mode and manner of operations and withdrawal has always generated friction between the states and the federal government.
Whenever there is shortfall in monthly revenue generation, states agitate during the Federation Account Allocation Committee meeting for withdrawal from the account to augment revenue.
“For the full benefit of effective plugging of revenue leakages to be achieved, the revenue management system must be kept simple with minimal discretionary powers for the managers of the system.
“Adequate infrastructure must be provided and the need for transparency emphasised in every respect. Political influence should not erode the revenue authorities and there should be legal sanctions for fraudulent revenue officers,” he said.
Muruako said also, that for the good of the economy, there was a need for increased collaboration on revenue generation and monitoring among government agencies, Federal Ministry of Finance and Budget Office of the Federation.
He said there was the need for a proactive and effective reconciliation of Ministries Departments and Agencies’ accounts on a regular basis to check unwholesome practices that may not be routed through the remittance platform.
Muruako said that the commission was working with the Ministry of Finance to fashion out an Operating SurplusTemplate, which he said would help get government get the right revenue from its agencies.
Also speaking the Accountant-General of the Federation, Ahmed Idris  has called for a general reorientation in the way and manner government business is conducted in order to mitigate the effects of recession in the economy.
“Nigeria is presently undergoing robust changes in the public financial management, thus the quest for higher performance on transparency and accountability could not be overemphasised.
“It is clearly understood that reforms such the adoption of IPSAS Accrual basis, IPPIS programme, TSA implementation could only survive the test of time if our financial management system is predicated on integrity, transportation and accountability.
“More than ever before, there is need for commitment of all to overcome our common economic and developmental challenges,” he said.
Also, the Secretary, Presidential Initiative on Continuous Audit, Mr Mohammed Dikwa, said the primary focus of the initiative is to reduce payroll cost and ensure prudent revenue management.
He said that other focus areas include personnel cost management, overhead cost, pension gratuity, debt servicing, capital supplementation, service wide vote and statutory transfers.
He said all these were to identify areas of wastage and leakages, block and streamline them to build critical sectors of the economy.