Introduction: Following the so-called economic meltdown and dwindling revenue federal, state and local governments are currently engaged in a borrowing spree. Even though the loans are designed to finance political campaigns the official justification is that they are meant to fund projects and pay the new national wage of N18,000.
Introduction: Following the so-called economic meltdown and dwindling revenue federal, state and local governments are currently engaged in a borrowing spree. Even though the loans are designed to finance political campaigns the official justification is that they are meant to fund projects and pay the new national wage of N18,000.
The gross mismanagement of the huge resources by all tiers of government and obscene profligacy of political office holders led the National Conscience Party (NCP) to investigate the management of the Federation Account and allied matters.
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An investigation conducted by the NCP has revealed that several trillions of naira which ought to have been deposited in the Federation Account are missing. It is in this regard that we decided to register our observations and seek a reversal of the dangerous trend. The imperative for this task hinges on the urgent need to demand an investigation into the trillions of naira not remitted into the Federation Account, as required by Section 70 of the Constitution. We also want to use this channel to re-awaken appropriate levels of government (especially state and local governments) in the country to their responsibility relating to funds management, highlight inefficiency and irregularities in the management of the country's resources and wealth and demand for accountability in the allocation and sharing of resources by the Federal Government of Nigeria.
The Missing Trillions
Recent events in the country have given so many revelations about the recklessness that has consistently characterized government management of Nigeria's resources and accrued revenues. Facts keep emerging daily on huge sums of money that have either been looted, misappropriated, shared, mismanaged or committed into white elephant projects. Many years ago, during the oil boom when money began to flood into the account of the government of Nigeria, a leader of the country at the time was said to have boasted that "Nigeria's problem was not money but how to spend it". That was in the '70s.
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While the oil boom of that era generated so much money for the country from the sale of petroleum which at that time had surpassed agriculture as the major source of revenue earner, the government of the day failed to effectively utilise the money in meeting the country's competing needs including the development of infrastructure, initiating welfare services for the people and embarking on other viable economic and social policies.
What followed the oil boom of the 1970s was a tell-tale oil glut in the 1980s which led to the crash of oil price in the world market. Of course, Nigeria was one of the countries that paid for leadership failure with regard to poor policy formulation and implementation. When the money was trickling in the government failed to effectively utilise the huge income and to save for the rainy day.
But with current development, it has become clear that successive governments in Nigeria have refused to learn from history. A review of events would buttress the fact that the game has not yet changed. Perhaps rather than a change in tradition, the culture has become deeply entrenched. The numerous facts we have gathered about profligacy and reckless management of funds in Nigeria would appall someone from a different clime where transparency, accountability, and probity have remained the fulcrum on which public fund management and accounting are anchored.
It is unfortunate that we have continued to operate a system alien to this standard. While a country's revenue is supposed to be enjoyed equally by its citizens the case is not the same in Nigeria. It is even ironical that a country that has produced so much wealth since its existence has done little to benefit the majority of its population in terms of meeting their welfare needs. The problem, as has already been pointed out, is not because the oil that brings in the money has dried up. It is not because the oil glut as experienced in the 1980s is repeating itself. Even if we agree that there is a recession, the fact remains that the present predicament relating to Nigeria's economy and the prevailing poverty cannot be explained on the reason of low price of oil. Rather we have noted that the problem lies on leadership inefficiency and ineffectiveness, for it is these leaders that manage or, more appropriately, mismanage the country's economy.
The mismanagement of the country's resources, particularly oil, and its revenues, has manifested in various forms. For instance, we have discovered that the operation of the Excess Crude Account by the government does not comply with relevant provisions of the Constitution, particularly Section 162 of the 1999 Constitution. While the Constitution has specifically stated that Internally Generated Revenues (IGR) of the Federal Government of Nigeria must be paid into the Federation Account, the practice by the Federal Government violates this provision. This arbitrariness has also played out in the government practice relating to the sales and renewal of oil licences to foreign companies operating in the country.
In addition to the gross mismanagement of the Excess Crude Account, it has just been disclosed by Honourable Oladimeji Banklole that the sum of US$5 billion earned from liquefied natural gas in the last ten years has not been recorded in the Federation Account. In the same vein, the management of the Nigerian National Petroleum Corporation alleged that the sum of N1.7 billion was given out to undisclosed corporate bodies and individuals on the instructions of some unnamed former Heads of State!
The grand mismanagement of the national economy has also been demonstrated in the renewal of oil licences to foreign oil companies operating in Nigeria. For instance, the Federal Government renewed some oil licences for ExxonMobil in the sum of US$600 million whereas a Chinese company had offered US$5 billion for the same licences. Thus, the country lost the whopping sum of US$4.4 billion in that single transaction.
During its investigation into the non-remittance of all revenues accrued to the Federal Government into the Federation Account, the House Committee on Finance which conducted the investigation observed that "revenues accruing to the Federation Account have been adversely affected due to the non-compliance with the Constitutional provision by Ministries, Departments, and Agencies of Government". This is against the stipulation of Section 162 of the 1999 Constitution of the Federal Republic of Nigeria which provides that "all revenues on behalf of Government must be paid into the Federation Account". In its staggering report, the Committee found that a total of One Hundred and Sixty-Five Billion, Five Hundred and Five Million, Seven Hundred and Seventy-Eight Thousand, Three Hundred and Twenty-Nine Naira and Seven One Kobo (N165,505,778,329.71) only representing the amount of duty loss due to exemptions/waivers/concessions from January 2003 to 31st March 2008 were not remitted into the Federation Account.
Further investigation by the committee showed that huge sums of money which ought to be remitted into government's coffers were not paid into the Federation Account. Questions about the location of these sums have remained unanswered. Such funds whose whereabouts have not been explained by the Federal Government and others which have been mismanaged include the following:
"Out of the sum of N24,966,963,665,224.50 received as internally generated revenue by ministries, parastatals and agencies of the Federal Government from 2004 to 2007 the sum of N21,651,084,008,087.20 was deposited in the Federation Account leaving a balance of N3,315,879,657,137.26 withheld by the Federal Government.
� $2,009,520,000 being the backlog of accrued Signature Bonus.
� N155 billion which accrued from sales of Federal Government Properties.
� N511 billion being privatization proceeds from 2004-2007.
� N119 Billion being the accrued amount from Education Tax.
� N1.5 trillion was illegally shared to unnamed private individuals on the directive of some unidentified former Heads of State.
� $18 million was also given to a sugar company by the NNPC at instance of a former Head of State
� The $20 billion left in the Excess Crude Account by the Olusegun Obasanjo Administration in May 2007 has been drawn down to $460 million.
The concessioning of the Nigerian Port Authority (NPA) concluded under the regime of President Olusegun Obasanjo is now a subject of debate. The Senate Committee on Transportation has said that the concessioning as executed during the last administration did not meet the required standards and Constitutional provisions. Not only that, there is also a debate regarding the utilization of the billions that have been generated from the privatization of the port sector.
A report in the Punch Newspaper of July 26, 2010 has it that the Federal Government has generated more than N400 billion from the port concessioning. But the majority of Nigerians want to know what the government has done with this accrued sum.
A few months ago the international bid for the sale of Federal Government's equity in the Nigerian Telecommunication Company (NITEL) was successfully concluded. The preferred bidder (The New Generation Consortium Limited) has not been asked to pay the agreed price of US$2.5 billion due to some inexplicable reasons.
The government of Nigeria has also continued to promote a culture of wastefulness. This has significantly been demonstrated in the government's spending habit. Just recently the Federal Government disclosed its decision to acquire three private jets. In a bid to justify the illegal purchase of three new aircraft in the Presidential fleet, the Presidency stated that the Senate President and Speaker of the House of Representatives are entitled to use the jets for their official engagements. Since the Revenue Mobilization Allocation and Fiscal Commission has not determined that the Senate President and the House Speaker are entitled to have the jets as official vehicles it is submitted that the claim of the Presidency with respect to the use of the Presidential aircraft is illegal as it cannot be justified under Section 70 of the Constitution.
Trial of Governors and Other Public Officers
In addition to aforesaid inefficiency at the Federal level, state and local governments have also contributed to the promotion of mismanagement of funds in the country. For instance, while the EFCC and the ICPC charged to court some governors believed to have looted public funds, the states concerned have left the anti-graft to collect proceeds for them from indicted former governors and the prosecution of those still on trial. Curiously, the attorneys-general of the affected states have not collaborated with the anti-graft agencies to speed up the cases. Yet, the alleged stolen funds are said to be over N300 billion.
Furthermore, the State and local governments have left the Federal Government to manage the Federation Account without accountability. Commissioners of Finance are assembled at Abuja monthly to share crumbs from the master's table. This practice leaves much to be desired for a country where development is very much needed and accountability required.
The states and local governments do not participate in the generation of revenue in the Federation Account. Right now, Federal Government of Nigeria is in the habit of selling oil licences and oil blocks at give-away prices to the detriment of the national economy. We have confirmed that the Petroleum Industry Bill which is designed to ensure that more revenues accrue to the Federation Account will not be passed as a result of the opposition of foreign oil companies. The NCP has decided to challenge the mismanagement of the various aspects of the national economy.
Conclusion
The lackadaisical attitude of state and local governments in preventing mismanagement of public funds either at the federal government level or in their own states would continue to hinder development in the country. We believe that, given efficient management of the country's resources, the three levels of government can survive without the need to borrow money from outside the country. We are all aware of the excruciating conditions usually attached to these loans which most of the time become too difficult for the masses of the country to bear.
We are of the firm belief that if appropriate steps are taken to ensure that the trillions being withheld by the Federal Government and other agencies are paid into the Federation Account and shared by the three levels of government there will be no basis to seek foreign loans.
There is the urgent need to stick to the provisions of the Constitution relating to the sharing of the country's revenue. This must be based on fairness, transparency, accountability, equity and probity. The present situation calls for total overhauling and a reform of the entire system.
Falana and Tanko are National Chairman and National Secretary of National Conscience Party (NCP) respectively.
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