By Celestine Okafor (Group Politics Editor & National Assembly/Senate Correspondent) @CelestineOkaf11
The plenary session of the Nigerian Senate on Tuesday, April 30, 2013, was almost a bedlam. Passions ran very high. Senators who spoke on the floor of the Senate Chamber, one after another, screamed with both angst and guilt. Even the Senate President (former), David Bonaventure Mark, mumbled in bitterness and spoke with subdued voice.
The red chamber legislators were reacting to the startling revelations contained in the report of the status inquiry into the National Resources Funds by the Public Accounts Committee of the Senate. These special funds accounts managed by the Federal Government of Nigeria for the purposes of funding the development of alternative mineral resources to oil and gas, and for intervening and co-ordinating the general ecological problems in the country and funding the three tiers of governments are: Development of Natural Resources Accounts (3.0%), Derivation and Ecology Account (1.46%) and the Stabilization Account (0.72%).
Presenting the details of that report before his colleagues, Senate Committee Chairman (former) on Public Accounts, Senator Ahmed Lawan (ANPP Yobe State, and now Senate President of Nigeria), disclosed that out of a total sum of N1.5 trillion accruals from the three slush fund accounts operated between 2002 and 2012, a whopping N1.043 trillion was paid out, while a substantial part of it was brazenly misapplied from their primary purposes to areas unintended, without recourse to due process and fiscal guidelines. A fund from the said abused accounts were given as loans or grants to some friendly Foreign Countries, Private Companies, Organizations, State Governments, particularly those undeserving, and some Ministries, Departments and Agencies (MDAs) of government. The cash disbursement was unknown to the Consolidated Revenue Account (CRA).
These loan monies, according to the report released to the Senate Committee by the Central Bank of Nigeria (CBN) and the Office of the Accountant General of the Federation (ACGF), have essentially been rated as “bad debts” and therefore “unrecoverable.
Angry Senators who spoke on the way forward regarding the report, faulted the establishment of the Special Accounts in the first instance, by the Olusegun Obasanjo administration in 2002, as a gross violation of section 80 (2) and 162 of the 1999 Constitution (As amended). The management of the funds accounts were continued by the successive governments of late President Umaru Musa Yar’Adua and the incumbent President Goodluck Ebele Jonathan where further abuses of the funds were allegedly perpetrated.
Giving the breakdown of the expended funds, the Senate Committee report stated that out of the N1.5 trillion accrued sum, N 701, 489, 494, 960 and N61 billion were released into the development of the Natural Resources Account and the entire sum paid out as loans and grants. A total of N577 billion was recorded as unrecoverable bad debts.
Senator Lawan (Current Senate President) stated that under DNRA (Development of Natural Resources Account), a total of N612, 276,016. 56 was paid as Joint Venture Contribution (JVC) deducted from the Akwa Ibom grant between March and May 2002, shortly after the Account was created. Another sum of N1.3 billion loan was granted the Derivation Escrow Account on July 24, 2003. About N2 billion loan was equally given to Gitto Construzioni General limited, an Italian Construction Firm, as payment, on September 19, 2005. Another N3.745 billion loan was granted to the Federal Ministry of Foreign Affairs to buy a Chancery in Tokyo, capital of Japan, on November 25, 2004 and on December 30, 2004 respectively. Also, a loan of N10.11 billion was issued twice for the payment of October – December 2005 arrears of monetized fringe benefits in all the Federal Government Parastatals on February 2, 2006. Another N10.11 billion for the same payment of monetization arrears was paid on August 21, 2007.
The loan bazaar continued under the DNRA with N15 billion loan given to the Ministry of Works against the 2007 appropriation for the dualization of the Niger Delta East-West Road on January 18, 2007. Another loan of N 20 billion was paid out on December 28, 2006 for the dualization of Abuja–Lokoja and Kano–Maiduguri Roads under the same 2007 appropriation. A Total sum of N864, 725, 036 loans was equally given to the National Health Insurance Scheme (NHIS) on April 18, 2005 for identity card production. Another N452, 218, 449.70 loan facility was also given to the Federal Government as payment to the African Development Bank (ADB) for the purchase of shares on September 9, 2005.
The Senate Committee recorded other abuses of the funds to include the N14, 988, 625, 000.02 money given to the Federal Ministry of Water Resources for the Gurara Water Project. Another N100 billion was paid for the financing of second quarter capital, barely two weeks to the end of the Obasanjo Administration on May 15, 2007. The last tranch of N 70 billion in the fund account was released on September 1, 2010 to the Consolidated Revenue Fund (CRF) as loan to accelerated capital budget releases. The Federal Airport Authority of Nigeria -Aviation Infrastructure Intervention Fund Account however got a loan of N11 billion to address the infrastructural problems in the aviation sector on November 27, 2006.
Under the Stabilization Account however, the sum of N191,780,136,241 was given out as loan from a total of N255, 487,900,570. 38, making it 75 per cent of the abused funds. And out of the account too, N16. 2 billion was loaned to the Directorate of Pilgrims Affairs between 2003 and 2005, while the sum of N12.02 billion loan was granted to Ghana and Sao Tome and Principe, between September 22, 2004 and May 7, 2005. The Gong Publishing Company received a total of N142.6 million as loan for the debt owed by Local Government Councils on September 26, 2005. The then Inspector General of Police (Mr. Sunday Ehindero) was equally granted various loans in 2006 amounting N309, 208, 000.30 for the purchase of vehicles for the UN Peace – keeping Operations in Haiti.
Also the sum of N1, 420,213, 338. 58 billion was released from the Stabilization Account to the Nigeria Customs Service as cost of Revenue Collections on July 7, 2005. Transvari Services Limited was paid N10, 845, 000.00 for Nigerian Laws Researches on Public Finance on October 12, 2004. The Federal Inland Revenue Services (FIRS) got released to it, the sum of N1,084, 234,307.44 billion for unspecified purpose on July 7, 2005. A loan was granted to the Federal Government of Nigeria as 50 per cent Contribution to the phase 1 of the Pioneer Car Financing Scheme for public servants in the para-military agencies of government on February 5, 2007. A total of N87, 721,961, 531. billion was also released to the Independent National Electoral Commission (INEC) to commence the conduct of fresh Voters registration exercise on September 1, 2010; September 15, 2010 and on October 13, 2010. Akwa Ibom and Delta States got a total loan of N34, 949, 423, 870. 52 during the implementation of 10 per cent derivation indices to oil producing states on March 11, 2010. While the Federal Ministry of Aviation, the National Identity Management Commission (NIMC) and the National Judicial Council (NJC) got releases of N5 billion as approvals by the Coordinating Minister of the Economy and Finance Minister, Dr Ngozi Okonjo-Iweala, on September 12, 2011.
Senator Ahmed Lawan's Committee report also stated that of the N329, 866, 978, 289.92 total sum released into the Derivation and Ecology Account (DEA), the abused amount totals N149, 881, 359, 210. This represents about 45 per cent of the amount abused. The break down are as follows: N200 million loan given to the Presidential Research and Communications Unit on November 9, 2002. Another N500 million granted to the Edo state government on November 17, 2002. About N7.5 billion was loaned to the Nigerian Air Force through the Ministry of Defense’s Capital Account for some projects. N10 million was released for the building of an Abattoir in Bida, Niger State through the Secretary to the Government of the Federation (SGF) Ecological Fund Account on March 4, 2013.
Another N800 million was released for the re-surfacing of the Aminu Kano International Airport runway in kano through the same SGF Ecological Fund Account on January 14, 2003. Others are the N200 million released to the Federal Ministry of Works for the upgrading of the Lagos-Ibadan Expressway and the Lagos-Shagamu Section highway roads to 6 lanes carriageway on December 22, 2004. Another N550 million was given to the Federal Ministry of Works for the construction of 4 new bridges along Argungu-Bwi road and for the Completion of Sokoto River Bridge at Argungu in Kebbi State on May 5, 2005. About N150 million was also paid on March 4, 2003 to the Nigerian Railway Corporation for the Iju-Ijoko Rail Dualisation project and also through the SGF Ecological Fund Account.
More shocking of the entire funds abuses, was the disbursment of N750 million for the development of the Abuja Down Town Mall on January 4, 2007. The mall is still at the ground level 6 years after at the Abuja Central Area. About N6 billion was equally released to the Federal Capital Development Authority (FCDA) for the provision of Engineering Infratructure to Kubwa/ Karshi Satellite towns between March 23, 2007, August 13, 2007, May 8, 2007, and December 12, 2007. The katsina state government also got released to it on April 27, 2007, the sum of N1.995 billion as 50 percent of Federal Government contribution to the project of upgrading the Katsina Airport. On its part, the Ogun state government got N1 billion for the construction of Badagry-Igboho road (Atan-Isaga section) on same April 27, 2007. The government of Cross River State got N1.9 billion on June 21, 2006 through the Federal Ministry of Works for the construction of new bridge at Idundun in Cross River State. And another N10.92 billion was released to the Consolidated Revenue Fund (CRF) courtesy of a Presidential approval for the funding of the budget 2009 Appropriation Act as revenue source.
Reacting to the mind-buggling misapplication of the three special funds accounts, angry Senators were dumb-struck that such level of financial profligacy could clandestinely go on for ten years without discovery and whistle blowing. The Senate specifically indicted itself and the green chambers (House of Representatives) of the National Assembly for defaulting in their statutory oversight responsibilities.
One after another, the Senators expressed their views. “This is indeed a wake-up call on all of us legislators”, Senate President, David Mark said, adding that the problem of funds expenditure is the absence of proper fiscal guidelines. He continued: “If we Senators and House of Reps members have been following the funds since 2002, it would have been addressed earlier”, Mark reasons. He stated that, “It is right to work at these ones to see how the disbursements relate to areas they were disbursed”. Senator Mark charged the Public Accounts Committee to “go back and look at those money that were not misapplied and find out who has paid back their loans and those that are still defaulting, so that they can be made to pay back”. He maintains that it is in the interest of the nation that this pperceived executive financial recklessness is discouraged in the future.
Deputy Senate President (former), Senator Ike Ekweremadu, sprang up quickly as if stung by a black ant, and lamented that his geo-political zone of the South East, did not benefit a dime from the ecological fund in spite of its enormous ecological challenges like erosion and earth gullies. He however suggests the immediate invitation of the Anti-corruption Agencies like the EFCC and ICPC to go after the loan defaulters. Ekweremadu noted that the fund misappropriation wholly negates the spirit of the constitution. He urged the Senate Committee to do further investigation to “get to the root of the matter so that we don’t get to impunity”.
Similarly, Leader of the Senate (former), Senator Victor Ndoma-Egba (SAN) was quite uncomfortable in his seat. Shaking his head sideways in apparent disgust, he recommended for the Senate acceleration of the bill for an Act passage, observing that financial impropriety of that magnitude could endure for many years “because discretion has been allowed to the executive arm of government to spend funds over the years unappropriated”. He maintains that the fact that the situation of financial profligacy endures even today “means that the National Assembly has failed in its statutory responsibility”.
Like Ndoma-Egba, Deputy Senate Leader (former), Senator Abdul Ningi, stated that the funds were deliberately abused. He enjoined the Senate Committee of the whole not to sweep the report under the carpet because “the impunity of graft in the system is still on-going”.
Senator Isah Galaudu, a member of the investigating committee, added a more comical pep to his contribution. He argues that “No responsible government will use public ecological funds to buy soft drinks for an Abuja shopping mall”. He squealed that a high ranking Permanent Secretary of "this government" (ex-President Goodluck Jonathan administration) had the temerity to tell his Senate Probe Committee that if some of the payments were not made, Nigerians would go on strike. “Unfortunately, the ledger balance and bank statements had no reconciliation. The Finance Minister and Coordinating Minister of Economy (Dr Ngozi Okonjo-Iweala) claimed to be reforming the Nigerian Economy when in fact, she has refused to be reformed”, Senator Galaudu said.
Senator Olubumi Adetumbi (ACN Ekiti State) however observed that the fund disbursement was an event the National Assembly cannot afford to keep mute about “because nobody should be above the law of the land”. He stated that it was obvious from the report, that the loans were an attempt to manage government’s cash flow deficit, adding that it has provided sufficient grounds for inter-presidential engagement, since former the President Olusegun Obasanjo had dared President (now ex) Goodluck Jonathan to probe his regime, if he can.
Senator Smart Adeyemi (Kogi State) however reasoned that if some of the loan beneficiary states could afford to buy aero jets, such loans to them becomes misplaced. Adeyemi urged the Senate to subpoena their former colleagues lawmakers who allegedly had failed in their duty to oversight the funds accounts to appear before the Senate Public Accounts Committee to explain themselves.
But elder statesman, Senator Barnabas Gemade (PDP Benue North East) who described the report as “thorough”, however urged that the Senate should henceforth, begin to debate thoroughly, the revenue profiles of budgetary appropriations. He suggested that another Committee of the Senate should be set up to conduct further investigations, but this idea was promptly shot down by the Senate Committee of the whole house.
On the loans released for the upgrading of the Katsina Airport from the ecological fund account, Senator Yar’Adua explained that the funds released was judiciously used. He even invited the Senate to go to the Katsina airport for on-the- spot project verification.
To Senator Ifeanyi Okowa (PDP Delta North, and currently governor of Delta State), Senate, should, in this circumstance, revisit the existing legislation and if none currently exists, a new legal guideline should urgently be enacted to safeguard future occurrence.
In an exclusive interview with this news reporter in his office at the Senate Wing of the National Assembly, shortly after briefing the Senate Press Corps, Senator Enyinna Abaribe (Senate Committee Chairman on Information and Public Affairs, and now Deputy Majority Leader of the Nigerian Senate), explained that the Senate has resolved that the Public Account Committee (PAC) of the red chamber of the National Assembly should conduct further probe on the funds sleaze and report back to the house in four weeks.
Abaribe stated that the essence of further inquiry was to separate the innocent from the guilty, and to enable the Senate determine the next line of action. He added that though the procedures and guiding rules for the disbursement of the special funds were left at a discretionary manner, it is in the interest of good governance that specific legal provisions for that purpose be created.
“You can’t really blame anybody if the funds were diverted to other areas”, quips Abaribe. He added: “But once there are guiding rules, you can now blame somebody for such contravention. So we are going to provide guidelines, procedures and processes to make checks and balances possible. You cannot check somebody if you have not given him guidelines”.
Senator Abaribe disclosed that it was in the Sixth Senate of the National Assembly that revenue profile was being attached to budgetary appropriation because Senate requested for details of means to fund the budget. “We knew that if a budget is going to be badly funded by borrowing, that will also have an impact on the economy. And it means that if you are doing government borrowing, it will crowd out private borrowing, and that will also reduce expansion that we thought should come from the private sector. But it depends on the type of borrowing too. If you borrow short term, of course, it will impact on your ability to pay. And if you borrow long term, it will be a little much better.
"So it is a combination of those things that we have built in the Sixth Senate and insisted that there must be a revenue profile. From what we saw in that report, some of those funds were actually taken as loans to fund the budget. So there is lot of work for the National Assembly to do”, Senator Abaribe agrees.
(This Special Report Written By Celestine Osondu Okafor, Mnipr, A Popular Senior Journalist In Nigeria And Currently Publisher/Editor-in-Chief of a Leading Online/Print Newspaper, Nigerian NewsLeader, www.nigeriannewsleader.com, Was First Published In The Daily Independent Newspaper On April 2013. Celestine Okafor Can Be Reached Through The Following Contacts: Tel/Whassap: 080-330-33-781 ; E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.). NNL.
