Abuja – Details emerged yesterday at the Senate on the alleged abuses in the disbursement of the N701.4billion Natural Resources Funds and indeed, the N1.5trillion created by the Federal Government as “slush funds”.

The money was used to funnel unauthorized loans to state governments, individuals, private companies and friendly foreign governments. Senators also insisted that the establishment of the accounts contravened sections 80 (2) and 162 of the 1999 Constitution (As amended).Of the said sum, N701,489,494,960.61 billion was paid into the development of Natural Resources Account and the entire sum was paid out, either as loans or or grants to state governments, MDAs and a private construction company unknown to the Consolidated Revenue Account (CRF). Details of the abuses of the three accounts were supplied to the Senate Public Accounts Committee by the Office of the Accountant-General of the Federation and the Central Bank of Nigeria. Out of the N1.5 trillion allegedly given out as loans, N577 billion was classified “bad debt” and “unrecoverable.”

The monies were paid out of the three dedicated accounts without any fiscal guidelines and statutory regulations. The account was created in 2002 during the Obasanjo administration and had been operated by the successive governments of the late Alhaji Umaru Musa Yar’Adua and incumbent President Goodluck Jonathan. In one of the abuses detailed by the Senate committee, government released N750 million for the “development of Abuja Downtown Mall” on January 1, 2007. There was no beneficiary named for the loan.

Senators expressed umbrage during consideration of the Report of the Status Inquiry into the Special Funds Accounts (Development of Natural Resources Account, Derivation and Ecology Account and Stabilisation Account) maintained by the Federal Government. Presenting the report in the Senate yesterday, Chairman of the Public Accounts Committee, Ahmad Lawan, gave further details of how the account was created and how former President Olusegun Obasanjo made a proposal of how the funds in the account would be distributed and how it was distorted.

He explained that contrary to information given by government officials during investigation of how funds were spent in the three accounts, the Special Funds Accounts were administered by successive governments without recourse to due process. “It’s not a discretionary account and there are no guidelines in the disbursement and utilization of the funds… Most of the monies were given out as loans to state governments, foreign countries and private individuals and companies…Some states got so much from the accounts while some states got virtually nothing from the Ecological Fund. While the Public Accounts meets, we look at issues patriotically and nationally.

It’s not about the PDP or any opposition party. Giving more details of how the abuses under the Development of Natural Resources Account wherein N701.489 billion was paid into the account and the same sum was equally drained, Lawan said N2 billion loan was granted for payment to Gitto Costruzioni General Limited on September 19, 2005 while another N3.745 billion loan was granted to the Federal Ministry of Foreign Affairs to buy a chancery in Tokyo, Japan on November 25, 2004 and December 30, 2004. A loan of N10.11 billion for the payment of October-December 2005 arrears of monetized fringe benefits in all Federal Government parastatals on February 2, 2006 was paid twice.

Another N10.11 billion for the same payment of monetization arrears was paid on August 21, 2007. Under the same subhead, N15 billion loan was given to the Ministry of Works against the 2007 appropriation for the dualisation ion of the East-West roads on January 18, 2007. Shortly after the account was created, N612,276,016.65 was paid as JVC contribution deducted from Akwa Ibom grant between March and May, 2002. Another N1.3 billion loan was granted the Derivation Escrow Account on July 24,2003. On April 18, 2005, N864,725,036 loan was given to the National Health Insurance Scheme (NHIS) for ID cards production while N452,218,449.70 loan was granted the Federal Government on September 9, 2005 as payment to ADB for purchase of shares.

In other abuses detailed by the committee, the Ministry of Water Resources got N14,988,625,000.02 for the Gurara Water Project while N100 billion was released for financing of second quarter capital on May 15, 2007, barely two weeks to the end of the Obasanjo administration. On September 1, 2010, the last tranche of N70 billion in the account was released to the CRF as loan to accelerate capital budget releases. Under the Stabilisation Account, out of N255,487,900,570.38, government loaned out N191,780,136,241, making 75 per cent of the funds abused.

Out of the account, N16.2 billion was loaned to the Directorate of Pilgrims’ Affairs between 2003-2005 while N12.002 billion loan was granted Ghana and São Tomé and Principe between September 22, 2004 and May 7, 2005. Another N142.6 million was released to Gong Publishing Company as loan of debt owed by local government councils on September 26, 2005. In 2006, various loans totalling N309,208,000.30 was equally granted the Inspector-General of Police for the “purchase of vehicles for the UN Peace-keeping operations in Haiti.” Contributing, Deputy Senate President Ike Ekweremadu, expressed surprise that even though he hails from the South-East which is predominantly controlled by the Peoples Democratic Party (PDP), “no state in the South-East has benefited from this fund…
We have seen where money meant for ecological funds are being used to build airports, malls and abattoirs. “If the beneficiaries have not returned the money, then the EFCC, ICPC must be invited.” Senate Leader Victor Ndoma-Egba (SAN) noted that the National Assembly is tacitly complicit in the abuse of the accounts because it failed to exercise its oversight rights over the executive. His words: “If these funds were appropriated for, we need to ask what happened to them before we now come to this. We need to ask questions…we are here because the system has allowed too much discretion to the executive. “This report is more of an indictment of the National Assembly than the executive.

This report indicts us more than the executive and it should serve as a wake-up call for us to be alive to our responsibilities…” Ndoma-Egba’s deputy, Abdul Ningi, described the loans as “sheer, crass executive recklessness and the National Assembly’s indifference to them. The trend continues; it’s ongoing because releases were made as early as 2011…” To the Chairman of the Federal Capital Territory (FCT) Committee, Smart Adeyemi, “when government doesn’t spend funds for purposes of helping the public, it can be described as rascality of the executive.”

He wondered why government continued to “grant loans to governments that have enough. It’s encouraging them to misappropriate public funds.” Senator Adeyemi called for proper investigation of the Lawan report to ascertain the extent of misappropriation of public funds. Also, Senator Isa Galaudu described the accounts as “slush funds for executive recklessness. The Abuja Mall is still at the ground level at the Central Area of the FCT!” An obviously angry Galaudu wondered how top government officials treated the Special Funds Account with levity when invited by the Public Accounts Committee to state their involvement in its operations.

“A high ranking member of this government had the temerity to tell the Public Accounts 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 claimed to have been reforming Nigeria when in fact, she refused to be reformed.” Senate resolved that the committee should go back and conduct further investigation, including inviting the beneficiaries to ascertain whether some of the loans have been paid back and if not, how the funds taken were utilised.
The committee has four weeks to report back to the house.



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