Special Accounts and executive recklessness

• AfricCon News
  AfricCon Latest Nigerian Report:  Special Accounts and executive recklessness
  Africcon Media, Nigeria
  
  From: Africcon Media – Nigeria
  
  In a rather depressing report last Tuesday the Senate committee on Public Accounts revealed how large chunks of money from three special accounts were spent on extraneous things bordering on lawlessness and recklessness. The Senate expressed umbrage during consideration of the report on the status inquiry into the Special Funds Account. The accounts as set up in 2002 during the Olusegun Obasanjo presidency were Development of Natural Resources Account, Derivation and Ecology Account and Stabilization Account.
  
  The Senate said such accounts were largely illegal, being in contravention of sections 80[2] and 169 of the 1999 constitution, which is why some of them described it as ‘’slush funds’’. To make matters worse, the funds have not been expended on the reasons for which they were set up. Details as given to the committee by office of the Accountant-General of the federation and Central Bank of Nigeria uncovered that of the N1.5 trillion released to the accounts between 2002 and June 2012, N1.4 trillion has been diverted to other uses including loans to foreign agencies, private agencies and  organizations.
  
  While the Natural Resources Account is meant to provide funds 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 stabilization 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 down turns. But the report showed that funds were expended without fiscal guideline and fiscal regulation.
  
  Details of the abuses under the Development of Natural Resources Account showed that N2billion loan was granted  for payment to Gitto Constructioni General Limited in September, 2005 while another N3.754 billion loan was granted to the Federal Ministry of Foreign Affairs to buy a chancery in Tokyo, Japan on November 25, 2004 and December 30, 2004. A loan of N10.11 billion was given for the payment of October-December 2005 arrears of monetized fringe benefits in all federal parastatals on February 2, 2006 . Another N10.11 billion for the payment of monetization arrears was made on August 21, 2007.
  
  Under the same subhead N15 billion loan was given to the Ministry of works against the 2007 appropriation for the dualisation of the east-west roads in 2007. On April 18, 2005 N8.4  billion loan was given to National Health Insurance Scheme[NHIS] for production of Identity cards while N4.5 billion was given to the Federal Government as loan for the purchase of African Development Bank shares. In another abuse detailed by the committee, the Ministry of Water Resources got N14.9 billion for Gurara Water project while N100 billion was released for the financing of second quarter capital project on May 15, 2007, barely two weeks to the end of the Obasanjo regime. On September 1, 2010, the last tranche of N70 billion in the account was released to CRF as loan to accelerate capital budget releases.
  
  Government also loaned out 75 percent of the stabilization account.  N16.2 billion was loaned to the Directorate of Pilgrim Affairs between 2003 and 2005 while N12billion was granted Ghana and Sao Tome and Principe between September 2004 and May 2005. In 2006 various loans totaling N309,208,000.30 was granted to the Inspector General of police ‘’for the purchase of vehicles for the UN peace keeping operations in Haiti. Sundry misapplication of funds has been traced to these accounts. These are some representations of how these special accounts were abused by the executive in a manner that has rightly been described as reckless.
  
  In January 2007, N750 million was released for Abuja Downtown mall but no beneficiary was named for the loan. Meanwhile the project is said to be at ground level. Undoubtedly such financial mess ought not to be known in a democratic dispensation were the rule of law should hold sway. N577 billion has already been described as bad loan which implies that such huge sum from the public till has gone down the drain.
  
  The abnormality of the special accounts manifest glaring illegality but to use the funds for extraneous things including loans and grants to other countries when such debilitating situations as ecological problems persist is to make a fool of Nigerians.   Illegality of the account given that it contradicts the constitution now seems to pale into insignificance when juxtaposed with how the money has been spent. It has tended to provide easy funds for the authorities to dispense  for all manner of projects. Little in the expenditure pattern showed that such funds exist for the development of natural resources or for tackling ecological problems which has ravaged most parts of the country, especially the south east.
  
  Even as the senate deserves commendation for opening this ugly vista, the National Assembly ought to be blamed for failing to detect this before now through oversight functions. Better late than never, this is why the senate must not sweep this mess under the carpet. The committee has been sent back to dig deeper into the matter. They should get the beneficiaries of those spurious loans and know if they have repaid the loans. Hence forth the accounts must cease to be used as slush funds to service all manner of expenditure outside the reason it was set up. That is if the accounts should continue to exist.