Obasanjo Orders Audit Of $15b Foreign Debt Payments - Politics - Nairaland
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| Obasanjo Orders Audit Of $15b Foreign Debt Payments by egoldman(m): 4:09pm On Apr 30, 2007 |
AN audit of the Federal Government's foreign debt payment totalling $15 billion between last year and last month has been ordered by President Olusegun Obasanjo. The debt payment was for the Paris Club and the London Club of creditors. Consequently, the Debt Management Office (DMO), the government's agency in charge of debt management has appointed PriceWater and Coopers to execute the job. The outcome of the audit is expected on May 16. The DMO Director-General, Dr. Munsur Muhtar disclosed this to reporters in Abuja at the weekend. Muhtar said: "The scope of the audit will cover all the payments made to all the creditors at various stages of the transactions, and also payments made to all the financial intermediaries, including investment banks, payments made to financial and legal advisers and all commission charges arising out of these transactions, which were paid to government agencies or non-governmental agencies.'' He added: "We have also requested the auditors to do a process audit, for example to really assess the selection process that was used for the financial and legal advisers, and intermediates - the investment banks that were used, to ensure that they conform with the acceptable norms in terms of procurement. "The DMO solely decided on its own to get an independent audit of all these transactions and applied for Mr. President's approval. We later got the approval of Mr. President on this." The debt management agency said it firmly believes that this is consistent with the "ethos of transparency, accountability and good governance" that President Obasanjo's administration has been "trying to entrench in the nation's institutions and in the way the government does its business." Muhtar said the audit also permits Mr. President to prepare a comprehensive handover note to the incoming administration, which will be made up of independently authenticated and duly certified records relating to these transactions. "So, it is not the Federal Government or Federal Ministry of Finance or the DMO or the Central Bank of Nigeria that is giving these records, but we are having the records verified by independent auditors," he said. Muhtar explained that following the President's endorsement, DMO went ahead to select an audit firm that will carry out this exercise. The selection, he added was through a competitive bidding, using the method of selective tendering from which four key audit firms were identified. He listed the four firms identified as: KPMG; Deloitte; Ernst and Young; and PriceWaterhouse and Coopers (PWC) out of which PriceWaterhouse and Coopers was selected to carry out the exercise. He spoke further: "The process has already commenced in earnest. We expect that the report of the audit firm will be ready by the third week of May, in fact May 16 to be precise. When the report comes out, we expect that Mr. President will share it with key stakeholders including the National Assembly and the states." "One of the things we have also asked the audit firm to look into is in relation to the utilisation of the excess crude of the states, and the balance of liabilities. Although we have a little handicap here in the sense that the reconciliation processes are still ongoing. "But based on the preliminary data that we have, we will want to be able to get verification from the auditors in terms of how these payments would have been applied. That is why the states are important stakeholders in this. It is our hope also that auditors' report would be available in the public domain. We have no objection to having that in the public domain." According to Muhtar, the audit will cover all the transactions related to the Paris Club debt exit and London Club debt redemption process. It will not cover the debt service the DMO has been making from 2000 to 2004. "Already, those have been captured on a year-by-year basis by the Accountant General of the Federation in his report to the Auditor General of the Federation." The DMO boss explained that "every year as a first-line item, a statement has to certify the debt transaction that has been made. So, that is not a problem. The one that we want to focus on is the Paris Club and London Club debts exit payment. That is, the exit transactions - the transactions related to the exit of Paris Club and London Club debts. "This is only debt exit. As I have said, we will only look at the excess crude only to the extent where some amounts were used to exit the Paris and London Clubs' debts payment. Part of that amount belongs to the states and part of it also belongs to the Federal Government." The DMO is scheduling a major press conference for next week. It is tentatively scheduled for May 7, subject to confirmation. According to Muhtar, the press conference is to provide an opportunity for the media to obtain further clarifications and ask questions on any issue pertaining to these external debts exit. "We are going to have the coordinator and Senior Special Assistant to the President on MDGs (Medium-term Development Goals), Amina Ibrahim, present at the press conference. She has been responsible for managing the utilisation of funds freed from the debt relief. We will also have some of the ministers or their representatives at the event, particularly the ministries that have benefited from the debt relief," he said. Under the Paris Club Debt exit treatment, Nigeria made the following payments: First tranche payment - $6.3 billion paid in November 2005; Second tranche payment - $1.387 billion paid in December 2005; Third and final tranche payment - $4.498 billion paid on April 21, 2006. There were also CBN's 0.5 per cent commission charges amounting to over $30 million and other financial and legal fees to consultants. On the London Club debt payments, the following disbursements were made: Par bond - $1.486 billion paid in December 2006, Promissory notes - $512 million paid in early March 2007; Oil warrants, - $82 million paid on April 4, 2007 as well as CBN's 0.5 per cent commission charges and financial and legal fees to consultants. source ; http://www.guardiannewsngr.com/news/article02 What do you think about this move from the president ? Does it portray the president as being transparent ? please share your opinion . |
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