TheCable

The federal government says the $35 million withdrawal from the country’s excess crude accounts (ECA) was used as an advance payment for the acquisition of offshore patrol vessels.

It made the clarification in a series of tweets on Wednesday.

“The $35 million disbursement from the excess crude account (ECA) is from June 2022, is an advance payment for the purchase of brand-new Offshore Patrol Vessels (OPVs) for the Nigerian Navy, as part of efforts to consolidate on maritime security gains recorded in the Gulf of Guinea,” it said.

“Earlier this year, Nigeria exited the International Maritime Bureau (IMB) Piracy List. Most recently, the IMB noted that there were zero actual/attempted piracy and ship-armed-robbery incidents in Nigerian waters in the first half of 2022.”

ECA is the difference between the market price of crude oil and the budgeted price of crude oil in Nigeria’s budget.

It was established in 2004 by the federal government to save for rainy days, stabilise the country’s economy and smooth out the impact of price volatility in oil exports. Since its creation, the ECA has been the subject of controversies and allegations of corruption.

In a communiqué issued earlier on Wednesday at the end of the federation account allocation committee (FAAC) meeting for July, the federal government said the balance in the ECA dropped from $35.37 million to $376,655 in June, without providing further details.

But following criticism of the withdrawal, it later explained that the funds were deployed to boost the nation’s security.

Also speaking on the issue at the last federal executive council (FEC) meeting, Zainab Ahmed, minister of finance, budget and national planning, said state governors, who are joint owners of the accounts, were aware of the withdrawals.

The minister also claimed that the account had no accruals in the last four years because of the volatility of the commodity in the international market, adding that withdrawals have always been in consultations with NEC.