The recent revelation by the Senate Public Accounts Committee that the Federal Government serially abused funds amounting to N1.53 trillion in the Special Funds Accounts is disturbing. If found to be true, the misuse of this huge sum would be the height of executive irresponsibility.
The three Special Funds Accounts alleged to have been flagrantly abused are the Stabilisation Account, Ecology Account and Natural Resources Account. These accounts have been controversial since they were set up by the Olusegun Obasanjo administration in 2002.
Protests that the funds contravene Sections 80 (2) and 162 of the Nigerian Constitution have been largely ignored by the Executive. Section 162, specifically, provides that all revenue accruing to the government of the Federation (with a few exemptions) shall be paid into the Federation Account and shared among the Federal, State and Local Governments on such terms as may be prescribed by the National Assembly.
There is no provision for the unilateral expenditure of public funds by the Executive arm of government. Now, the Senate has been informed that N1.53 trillion from the Special Accounts was misapplied to sundry purposes that are unrelated to the reasons for setting them up. According to figures released to the Senate Public Accounts Committee by the Central Bank of Nigeria (CBN), and confirmed by the Office of the Accountant-General of the Federation, the money was doled out as loans and grants to sundry friendly foreign governments, public institutions, individuals and even private companies, without any fiscal guidelines or compliance with statutory regulations.
Out of the N1.53 trillion, N577 billion was classified as “bad debts” and, therefore, deemed “unrecoverable.” Among the questionable projects into which the funds were allegedly sunk is the proposed “Abuja Downtown Mall”, for which the Federal Government reportedly gave out a loan of N750 million on January 1, 2007. Surprisingly, there was no beneficiary named for the loan, and the project has reportedly not gone beyond the foundation level.
The Senate Public Accounts Committee report also said that N701 billion was diverted from the Natural Resources Fund to some state governments; Ministries, Departments and Agencies (MDAs) of government, and other organisations, for sundry unauthorized expenditures. We condemn the reckless use of funds in the Special Accounts. It is simply a case of the government surreptitiously expending public funds on questionable causes without the approval of the National Assembly, contrary to the dictates of the Nigerian Constitution.
It is wrong that the Executive arms of government, from the regime of Obasanjo till today, have been using funds in the Special Accounts as “slush funds”, for which they are not accountable to the National Assembly or any other authority. While we commend the Senate Public Accounts Committee for uncovering these abuses, it is clear that if the relevant committees of both chambers of the National Assembly had not been complacent in the discharge of their oversight responsibilities over the years, these anomalies would not have occurred.
The abuses would not have attained this frightening proportion. We commend the Senate President, David Mark, for publicly admitting that the legislature must share in the blame for not monitoring these accounts. The sensible thing to do now is to study these accounts to determine those who actually took what amount and how much they have paid back, with a view to recovering all monies that were illegally paid out from them.
It is good that the Senate Public Accounts Committee has been given four weeks to carry out the exercise. We expect the Committee to do a thorough job so that the problem of misuse of Special Funds can be dealt with once and for all. It serves no public good when funds set aside for certain critical purposes are either misused or misappropriated.
This is exactly what has been happening to special intervention funds set up in the past to address challenges in critical sectors of the economy and some other national problems. Yet, the Federal Government continues to propose fresh financial interventions when those already in place are not properly accounted for.
From the evidence provided by the Senate, there is no doubt that Special Funds Accounts, beyond their illegality, have become another avenue for fraudulent use public funds. If Special Funds Accounts must continue to exist, it is necessary that a law be passed to regulate their operation to guide against abuse. On no account should we allow Special Funds Accounts to be used as slush funds by the Executive arm of government.