Slush funds: How FG frittered N1.5trn–Senate report



From ADETUTU FOLASADE-KOYI, Abuja

Facts emerged yesterday on how the Federal Government created a Special Funds Account (SFA) and allegedly diverted N1,518,871,357,426.64 public money which was used as slush funds for cronies, including states and federal ministries, departments and agencies (MDAs). The SFA was created in 2002 with a take-off fund of N6,014,973,577.43. Releases into the account increased thereafter.

In 2003, N9,714,479,674.39 was paid into the account, peaking in 2010 with N43,754,669,033.95 paid into it. These figures are contained in a report of the Senate Public Accounts Committee on Status inquiry into the SFA. Senator Ahmad Lawan chairs the committee.

The account has three main components. They are: Development of Natural Resources Account, Derivation and Ecology Account and Stabilisation Account. They are all maintained by the Federal Government. The report, a copy of which was obtained by Daily Sun, is, however, silent on whether the SFA is legal or not. Regardless, the report detailed how N1,518,871,357,426.64 public funds was diverted into the account and how government allegedly dipped its hands into it to grant loans without restriction.

Out of the N1,518,871,357,426.64, a total of N578,583,374,000.05 is now regarded as  bad loan which are yet unrecoverable. The report was initially listed on the Senate Order Paper of yesterday, but was stood down to allow members study the report. It would be debated today, said Senate President David Mark. Lawan’s report, which detailed the history of the account from 2002 to June 30, 2012 is titled: “The Report of the Status Inquiry into the Special Funds Accounts*3.00% Development of Natural Resources Account; *1.46% Derivation and Ecology Account; *0.72% Stabilisation Account.

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The report observed that the Federal Government abused the three accounts with unaccountable and questionable loans with the Natural, Resources Account abused 100 percent because N701,489,494,960.61 was diverted into the account and the entire sum was given out as loans. The report reads:”Development of Natural Resources Account.

The fund belongs to the Federal Government and the purpose is to provide financial resources to develop alternative mineral resources to oil and gas. The beneficiaries are ministries like Solid Mineral Development. “Total accruals into the account: Within the period under review, the total fund that accrued to the account as at June 30, 2012, according to the Office of the Accountant-General of the Federation, was N873,400,023,790.19.

The total payments from the account amounts to N701,489,494,960.61.” On the Derivation and Ecology Account, this fund belongs to the Federal Government and the purpose is to intervene and co-ordinate the general ecological problems in the country. The beneficiaries are state governments and National Emergency Management Agency (NEMA).. Total accruals: Within the period under review, the total fund that accrued to the account as at June 30, 2012, according to the Accountant-General’s office was N389,983,433,066.07.

Total payments from the account amount to N329,866,978,289.92 On the 0.72 per cent Stabilisation Funds Derivation Account, as with the first two accounts, this account also belongs to the Federal Government and the purpose of this fund is to provide for unforeseen contingencies and economic downturn. The beneficiaries of this account are the 36 states and the Federal Capital Territory (FCT). Total accruals: Within the period under review, the total fund that accrued to the account as at June 30, 2012, according to the Office of the Accountant-General of the Federation was N255, 487, 900, 570.38. Total payments from the account amounts to N203,810,308,096.99.

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The committee observed that N1,518,871,357,426.64 was the accruals to the SFA as at June 30, 2012. A total N1,235,166,781,347.52 was paid from the account as at June 30, 2012. Under the Derivation and Ecology Account, N61,000,000,000.00 was granted as loan out of which N30,000,000,000.00 is still outstanding.” On page 10 of the committee’s report, under the Development of Natural Resources Account, N701,489,494,960.61 was the total amount released and the total a lung abused is also N701,489,494,960.61, being 100 percent being the amount abused.”

The report detailed the 16 beneficiaries which cut across Ministries of Foreign Affairs, Works, Water Resources, Power and Steel, National Health Insurance Scheme (NHIS), Federal Airport Authority of Nigeria (FAAN), with N70 billion “released to the Consolidated Revenue Fund (CRF)  as loan to accelerate capital budget releases on September 1, 2010.” Detailing the abuses of the Derivation and Ecology Account, the Senate committee indicated that N329,866,978,289.92 was released and N149,881,359,210 was the total amount abused.

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The level of amount abused is 45 per cent in this instance Again, there are 16 beneficiaries including N500 million loan granted the Edo State Government on November 17, 2002 while another N200 million was a loan to the Presidential Research and Communications Unit on November 9, 2002. Concerning the Stabilisation Account, a total of N255,487,900,570.38 was released while N191,780,136,241 was abused with a 75 per cent level of amount abused.

Only 12 beneficiaries were recorded as those who abused the account with N87,721,961,531.00 released to the Independent National Electoral Commission (INEC) to commence the conduct of fresh voters’ registration on  three occasions: September 1, 2010, September 15, 2010 and October 13, 2010. From the same fund, Akwa Ibom and Delta states got N34,949,423,870.52 loan during implementation of 10 per cent derivation indices to oil-producing states on March 11, 2010.

Another N5 billion was released to the Federal Ministry of Aviation, National Identity Management Commission and National Judicial Council as approved by the Coordinating Minister for Economy and Finance Minister on September 12, 2011, the report alleged.







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