THE Senator Ahmed Lawan-led Senate Committee on Public Accounts was, yesterday, told how the Presidency approved over N700 billion from the Natural Resources Fund account to finance budget deficits and other activities of Ministries, Departments and Agencies, MDAs.
It was presented to the committee that accruals into the account from 2002 to 2012 was N873.4 billion and of this, N701.49 bllion was paid out as expenditure within the same period.
Speaking, yesterday, when he appeared before the committee, Permanent Secretary, Ministry of Finance, Mr. Danlami Kifasi, said “all the expenditure from the account was approved by the Presidency.”
The said amount which was spent to service the MDAs was outside the mandate of the Fund as established in 2002 to, among other responsibilities, receive three per cent of accruals to the federation to assist in developing other natural resources and not the oil and gas sector of the economy.
Surprisingly, yesterday, the committee discovered that of all the expenditure made from the account, there was no expenditure that was in consonance with the objective of the Fund that was primarily set up to develop non-oil natural resources.
Payments for joint venture contribution
The Senate committee was made to understand that expenditures funded from the account were from payments for joint venture contribution of the Federal Government that has to do with NNPC’s oil and gas activities; loans to ministries and agencies to fund certain gaps in their budget and loans for the purchase of Chancery in Tokyo by the Ministry of Foreign Affairs.
When pressed by the committee members, Kifasi said: “I said it is the President that gives approval,” just as he could not name the particular president who did that.
According to the Permanent Secretary, in 2002, a total of N602.2 milion was disbursed to the government’s Joint Venture contribution and a loan of N1.3 billion was granted to the government’s derivation escrow account, adding that N50 billion was also withdrawn from the account as loan to fund the 2004 budget deficit.
He also told the committee that same year, N4.5 billion was granted to the Ministry of Water Resources as loan for water project; N2 billion to the Ministry of Internal Affairs for payment of National ID card project; N2.5 billion to Ministry of Steel Development and N4.12 billion to the Ministry of Foreign Affairs for the purchase of its Chancery in Tokyo, adding that in 2005, a loan was taken from the account to fund the budget deficit of that year.
According to him, other loans of N2 billion and N5.7 billion were given to Gitto Construction Company and Ministry of Steel Development, even as he told the Senators that all the loans, except the N50 billion for budget deficit was returned to the account, but the committee members did not agree with him on this note.
Speaking further Kifasi told the Senators that in 2006, a total of N10.5billion was granted as loan to pay the monetization arrears of civil service employees between October and December of that year and another loan of N242million was granted to pay for monetisation within the same period.
Adding that N2billion was released as loan to the Federal Airport Authority of Nigeria to settle the employee emoluments while another N11 billion was granted to the agency for the development of aviation infrastructure.
He said a N500million loan was advanced to the Ministry of Sports for preparation of athletes for the 9th All Africa Games and a total of N250million was granted to the National Pension Commission to fill certain funding gaps of the agency.
According to him, same year, a total of N20billion was also given to the Ministry of Works for the construction of roads and in 2007, a N2.1billion loan was received from the account for the payment of Siemens Company for a project, while the Ministry of Works collected a loan of N1.5billion from the same account.
The Permanent Secretary went further to disclose to the Committee members that also in 2007, the Ministry of Internal Affairs got N1.1billion for I.D Card project, while N452million was withdraw for the purchase of shares, adding that another N2.8billion was made available to the Ministry of Foreign Affairs to pursue the purchase of the nation’s chancery in Tokyo, Japan, just as another N27.8billion was borrowed to pay for fertilizer subsidization.
He however told the Senators that the loans were paid back, but the committee disagreed because the balance of the account has gone down to N171.9billion.
A member of the committee, Senator Patrick Ayo Akinyelure, LP, Ondo Central however drew the attention of the committee, stressing that if the loans were repaid, the account should have retained its total accrual of N873.4billion.
At this point, Chairman of the committee, Senator Ahmed Lawan, who noted that there was abuse of the account against the backdrop that none of the expenditure was in compliance with the reason why the account was established said, “The Natural Resources Fund Account is not for granting of loans, it is to develop country’s resources outside of oil. There is a clear violation of the laws governing this account.
“Tell me how JV contribution complies with developing natural resources outside of oil. JV projects have to do with oil and gas. This is a clear violation.”
Meanwhile, while the Ministry of Finance submitted an account balance of N171.9billion, the Central Bank of Nigeria, CBN which is responsible for the payments from the account submitted an account balance of N168.94billion.
Explaining the position of CBN, representative of the apex bank, Mr. Tahir Suleiman told the Senators that the account balance was as at May 2012, while that of the Ministry was updated to June 2012.
While observing the disparity, the Committee asked both agencies to return for reconciliation as well as with acceptable explanations.