Mr Olusegun Aganga, Nigeria’s minister of finance, has admitted that the establishment of the Excess Crude Account (ECA) in 2004 was a major weakness in the nation’s fiscal policies. Aganga explained that the weakness arising from lack of legal framework or legislation backing up ECA and its operations accounted for the reckless depletion of the account.
Aganga, noted that due to the deficiency inherent in the creation of the ECA, the federal government has come up with the establishment of Sovereign Wealth Fund (SWF). The SWF Bill is currently receiving attention at the National Assembly.
 Former President Olusegun Obasanjo in 2004 for the purpose of saving oil revenue in excess of the budgeted benchmark and the savings increased up to $20 million in December 2010 but persistent demand by states for the sharing had virtually depleted the account.
According to the minister, “ECA was something that the federal government felt was necessary and I think rightly so but it was not backed by the constitution or by a bill. So, it took a while for both the federal and the state governments to come up with a memorandum of understanding which some of them signed into.
“So, to some states governments, it is still their money, but the difference going forward and if you look at the report by the IMF and others, they have been criticising the country about the ECA but what they forget is how it was set up and what it was set up for and what it was supposed to do.
“Based on that, it’s a major weakness in our fiscal policies, and in order to tighten and strengthen it was why we came up with the SWF which would hopefully be backed by law. I have spent a lot of time with the state governors discussing it and all the state governors admitted that it was a desirable thing to do.”
The minister disclosed that the Attorney Generals of all the 36 states have looked at the draft bill before it was submitted to the national assembly so that no one can argue against it.   “There are lots of things we want to do to improve going forward because it’s not going to be business as usual,” he said. “Unfortunately, we are not in a position to implement everything today, but if we have the opportunity, then there are lots of areas we want to improve.”