For more than a month, the media has been awash with a brewing constitutional showdown
Over the legality and morality of the withholding by the FG of funds held in the excess crude oil revenue
Account of the federation.

What is the excess crude oil account?

The 1999 CFRN created a consolidated revenue account for the Federation of Nigeria. This account is to be funded from
budgetary allocation as approved by the National assembly or by means of any law enacted for the same purpose by
any act of the National assembly. Therefore every year, the National assembly enacts an appropriation Act which the
uninitiated call the budget. This act sets the benchmark prices for the primary source of government income for every year.
In setting this benchmark, the presidency and the N. Assembly are generally conservative and cautious, so the price is usually off the previous year’s highest price by as much as 50 dollars a barrel.

As a contingency net, the NA created the excess crude oil account and directed that all revenue from crude oil above
the budgetary benchmark should be paid into that account. Meanwhile all disbursements to the tiers of government continues to be effected through the consolidated revenue fund of the federation.
For more reading, visit http://www.effikoland.com/blogs/index.php?blog=2 or get a copy of the constitution of the 1999 constitution. See also AG federation Vs AG Abia and ors

Click here to read full article http://www.effikoland.com/blogs/index.php?blog=2

It is a very interesting issue, one that is close to my heart for one main reason: the National Independent Power Project (NIPP)

the NIPP was being funded by the Obj government from the excess crude account, in order to bypass the legislative process and allow for a rapid and sustained improvement in power generation. Now that Yar'adua aka 'rule of law' has come in, it has deemed (correctly) that the expenditure from this account solely by the Federal Government is unconstitutional - it represents unappropriated expenditure.

The Okonjo-Iweala/Soludo Economic team came up with this excess crude account notion to protect the economy from excess liquidity and inflationary pressures, while at the same time holding us back from boom-bust economic cycles and allow for appropriate budgetary discipline - not simply spending more money because it is available.

The states have rightly questioned the authority of the Federal Government to unilaterally decide when to disburse money that should ordinarily go into the Consolidated Revenue account for distribution to all tiers of government according to the Revenue Allocation Formulas.

I believe the NA should enact a law enabling the Federal Executive Council in consonance with the Council of State to make disbursements from the excess crude account based on urgent national needs such as infrastructure, medicine and security.

It makes little sense in my view to simply hold resources which could be well utilised (properly monitored of course) to ease the primary malaise facing the country right now - poor infrastructure and electricity. Making these expenditures now in a concerted and focused manner will aid the rest of the economic programs of government while not putting undue inflationary pressures on the economy.

@Debosky

What do you make of this article:http://www.heritage.org/Research/EnergyandEnvironment/wm1754.cfm It means the US could potentially be sitting on nearly 2 trillion barrels of oil