Senate: N1.04tn Misappropriated from Special Funds

Senator Ahmad Lawan



•Says National Assembly has failed Nigeria

Omololu Ogunmade
A probe ordered by the Senate into the management of special fund accounts by the federal government has uncovered a gross mismanagement of N1.04 trillion out of the N1.5 trillion released to the accounts between 2002 and June 2012.

Shocked by the magnitude of the misappropriation, the Senate, during the consideration of the probe report tabled by its Committee on Public Accounts yesterday, indicted the National Assembly for failing Nigeria in the discharge of its oversight functions.
The accounts are the Development of Natural Resources Account, Derivation and Ecology Account as well as Stabilisation Account.

While the Natural Resources Account is meant to provide financial resources for the development of alternative mineral resources from oil and gas, the Derivation and Ecology Account is meant for intervention in general ecological problems in the country. The stabilisation fund, on the other hand, is jointly owned by the three tiers of government and is meant as a stop gap measure for unforeseen contingencies, especially during economic downturns.

But a report presented by the Senate Committee on Public Accounts revealed a large diversion of the funds to other uses, including loans to foreign countries, government agencies and private organisations.

Presenting the report Tuesday, chairman of the committee, Senator Ahmad Lawan, said of the N1.5 trillion, which accrued to the account between 2002 and June 2012, N1.04 trillion was diverted from their primary purposes to irrelevant purposes such as loans to foreign countries, companies and organisations.

Lawan further submitted that of the misappropriated sum, N580 billion was granted to different institutions as loans, of which N347 billion had not been recovered.
According to him, apart from the inability of the executive arm of government to recover N347 billion of the loans given out, the operation of the “Development of Natural Resources Account is grossly abused because several releases under this account were not related to the intendment of the account.”

Furthermore, he said a total of N329 billion was granted as a loan under the Natural Resources Account alone, out of which N200 billion was still outstanding.
He also explained that under the Derivation and Ecology Account, a total of N61 billion was granted as a loan, of which N30 billion was still outstanding.

Giving a breakdown of misapplication of the funds in each account, Lawan said the N701 billion released to Natural Resources Account was abused; N149 billion of the N329 billion released to the Derivation and Ecology Account was abused; and N191 of the N255 billion released to the Stabilisation Account was abused.

He listed the abuses under Development of Natural Resources Account to include N612 million as payment for joint venture cash call contributions deducted from the Akwa Ibom grant between March and May 2002; a N1.3 million loan granted to the Derivation Escrow Account in 2003; N50 billion loan granted to finance the deficit in the 2004 budget; N3.7 million loan granted by the federal government to Africa Development Bank for the purchase of shares; and N2 billion loan granted for payment to Gitto Construction, among many others.

Also, he listed abuses under the Derivation and Ecological Account to include a N200 million loan to the Presidential Research and Communication Unit in November 2002; N500 million loan to Edo State Government in November same year; N800 million released for resurfacing of the runway in Aminu Kano International Airport, Kano; N500 million loan to Edo State Government; and N7.4 billion loan to the Nigerian Air Force through the Ministry of Defence’s Capital Account, among countless others.

He outlined the abuses under Stabilisation Account to include N16.2 million loan granted to the Directorate of Pilgrim Affairs in 2003, 2004 and 2005 respectively; N1.4 billion released to the Nigeria Customs Service as cost revenue collection in 2005; N1.084 billion released to the Federal Inland Revenue Service (FIRS) same year; N12 billion loan granted to Ghana and Sao Tome & Principe; and a N2.8 billion loan as the federal government’s contribution to the first phase of the pioneer car finance scheme for public servants in paramilitary agencies in May 2007, among several others.

In observation of the huge alleged abuse of the funds, the Senate indicted itself, saying a situation where such abuses took place for almost 10 years without the knowledge of the National Assembly implied a flagrant negligence of its oversight function, adding that it was time it repented of such negligence.

Speaking on the report, Senate President David Mark described the development “as truly an indictment on the National Assembly and a wake-up call for all of us to do our work properly.

“If we had done well since 2002, this should not have happened. But we never bothered to look into this. Overall, we share in the blame, both the executive and the legislature.”

At the end of the debate on the report, the Senate resolved to enact a law to establish and regulate the operations of the special fund accounts and directed the committee to undertake further investigation.