NewsOil & Gas

 Excess Crude Account (ECA) Rises to $476,513

Nigeria’s Excess Crude Account (ECA) balance rose to $472,513.64 as of November 2022. While Distributable VAT seems to be supporting the rise in FAAC Allocations, Analysts express concern about how sustainable such a trend is, especially in the light of an imminent slowdown in the economy. Analysts believe that the Excess Crude Account has resurrected questions about the legality of maintaining the ECA. The Account, established in 2004, was meant to serve as an account into which the excess amount of the budgetary benchmark from crude oil proceeds would be lodged. But the fact that the Account is maintained as an FG account instead of a Federation account raises more questions than answers. Following the establishment of the Sovereign Wealth Investment Authority Act in 2011, such savings were meant to be saved in the Sovereign Wealth Fund, invariably closing the ECA. Yet as of today, the ECA is still in operation.

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