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Business News of Thursday, 28 July 2022

Source: www.nairametrics.com

FG says it used $35 million from Excess Crude Account to purchase Offshore Patrol Vessels

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The Federal Government has responded to reports that the Excess Crude Account has dropped from $35.7 million to $376,655.

The government disclosed that the $35million disbursement from the Excess Crude Account (ECA) in June 2022, was an advance payment for the purchase of brand new Offshore Patrol Vessels (OPVs) for the Nigerian Navy.

The ECA is a savings account retained by the Federal Government and is funded by the difference between the market price of crude oil and the budgeted price of crude oil as contained in the appropriation bill, however, despite higher oil revenues, Nigeria has not added to the ECA this year.

Reacting to a report that revealed that Nigeria’s Excess Crude Account shrank from $35.37m to $376,655, the FG said, “The $35m disbursement from the Excess Crude Account (ECA) is from June 2022, and is an advance payment for the purchase of brand new Offshore Patrol Vessels (OPVs) for the Nigerian Navy.”

It added that it the move was part of efforts to consolidate on the gains of maritime security recorded in the Gulf of Guinea.

“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,” the government added.

Finance Minister explained why the EAC has not been funded in a while, stating that “On the issue of the Excess Crude Account, in the past four years, because of volatility in the cause oil market, we have not had accrual to the excess cause 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, 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 trench 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.”