Skip to main content

Squander of Oil Windfall Surplus begins: Withdrawal of $14bn oil money rocks Abuja

May 7, 2006

* Saharareporters was the first to report the plan by the Nigerian government to squander the excess crude oil reserve worth $34 billion http://www.saharareporter.com/dn001.php?dnid=61

 

THE PUNCH May 9 2006
Oluyinka Akintunde and Musikilu Mojeed, Abuja

The Central Bank of Nigeria had recorded massive and curious withdrawals in the last seven months fuelling speculations that the government may be withdrawing from the bank to fund the campaign for tenure extension.

The withdrawals were from the Excess Crude Account kept with the CBN and managed by the Federal Ministry of Finance.

According to a CBN document obtained on Monday by our correspondents in Abuja, a total of $14.284billion (about N1.857trillion) had been withdrawn from the apex bank’s vault between October 2005 and April 2006.

In some cases, the Federal Government did not give reasons for the withdrawals.

But the CBN said the withdrawals were based on instructions.

The document, which reflected the $6.234billion first tranche of payment to the Paris Club on October 30, 2005, also revealed that $1.387billion and $4.498billion were withdrawn from the excess crude account for the second and third payments to the Club.

The government made public the payment of only two tranches as opposed to the three indicated in the CBN record.

The Director-General of the Debt Management Office, Mr. Mansur Muhtar, however, confirmed to our correspondents in an interview in Abuja on Monday, that the payments were made in three tranches contrary to the two that were publicly announced.

He explained that the total amount paid was $12.2billion as against the $12.4billion earlier announced in the agreement with the Paris Club.

He said that the $0.2billion was gained because the CBN begun currencies swap early, resulting in some savings.

According to him, the balance would be paid back to the Excess Crude Account.

The DMO boss further disclosed that the CBN had prepared details of the payments to the Paris Club, which it had sent to the Minister of Finance.

The CBN had between October and December 2005 paid the arrears of $6.3billion to the 15 creditor-countries of the Club, while the second and final tranche of $4.518billion was paid on April 21, 2006.

While the Federal Government, according to the CBN report, withdrew $75.651million and $77.384million being one per cent commission and payment to Niger Delta respectively, no reason was given for eight withdrawals totalling $1.535billion (about N199.493billion).

The withdrawals, made without reason, were done on October 31, 2005 ($846.554million); December 12, 2005 ($170.549million); March 15, 2006 ($471,143); March 20, 2006 ($442,947); March 22, 2006 ($144.063million); March 22, 2006 ($354.562million); March 27, 2006 ($17.290million); and March 30, 2006 ($630,115).

Nine withdrawals totalling $477.469million (about N62.071billion) were also purportedly made by the government to fund the Niger Delta Power Holding Company Plants.

The withdrawals for the Niger Delta Power Holding Company Plants include: October 4, 2005 ($98.359million); December 1, 2005 ($77.802million); December 21, 2005 ($664,271); December 29, 2005 ($609,145); February 1, 2006 ($1.934million); March 6, 2006 ($209.502million); March 9, 2006 ($899,729); March 29, 2006 ($87.559million); and April 5, 2006 ($138,023).

Report of the curious withdrawals came amidst widespread claims that proponents of the third term agenda were engaging in massive bribery of federal legislators.

The withdrawals appear a throwback of the past military era when funds were indiscriminately withdrawn from the bank.

There were reports last week that pro-third term senators and members of the House of Representatives were bribed with N50million and N40million respectively as the first instalment of the largesse promised them for supporting the third term agenda.

The origin of the fund had been a source of concern to Nigerians.

Four big shots – two of them in top positions in the ruling party; one top senator; and one presidential assistant – were said to have been given N40billion within the last two weeks, to “manage” resistance to the extension agenda.

The CBN usually releases money to the Federal Government based on warrants from the Dr. Ngozi Okonjo-Iweala and the Accountant-General of the Federation, Alhaji Ibrahim Dankwambo.

The records obtained by our correspondents did not indicate that the procedure was followed.

But the Head of Corporate Affairs of the CBN, Mr. Festus Odoko, said the withdrawals were done on instructions from Okonjo-Iweala and Dankwambo.

He explained, “Every withdrawal is well documented. What goes into the account is also well documented based on instructions. There are always mandates from the minister and the AGF and as you know this money is meant for the Federation Account.

“There is no way withdrawal would be made without the Minister’s and the AGF’s knowledge. For withdrawals from the Excess Crude Account, there are clear instructions as to when to withdraw the money.

“The CBN is a banker to the Federal Government. You should know that you cannot withdraw funds from the CBN without clear instruction from the operator of the account, which in this case is the government.”

The Minister of Finance, Okonjo-Iweala, however, said the Excess Crude Account was intact.

The Special Assistant to the Minister of Finance (Media), Mr. Paul Nwabuikwu, told our correspondents on the phone that the minister had received several enquires on the subject.

He said that it was absolutely untrue that the Presidency was drawing funds from it to prosecute any agenda.

On the disbursements to the Paris Club, he referred our correspondents to the DMO for clarifications on any matter concerning these.

He quoted the minister as saying that the document on which the story was based was untrue.

The Presidency, however, described the allegation that it was withdrawing fund from the CBN to fund the third term project as ridiculous and far-fetched speculations.

The Special Assistant to the President on Public Affairs, Chief Femi Fani-Kayode said, “If you want to know what is going on in the CBN, the appropriate institution to ask is the CBN and not the Presidency.

“We refuse to respond to ridiculous and far-fetched speculations.”

The Economic and Financial Crimes Commission, on Monday, said three banks had come under its scrutiny for their suspected role in the alleged bribery of federal legislators to vote for the controversial third term clause.

Reports on Friday had said cash was moved from the Abuja-based banks to bribe the legislators to adopt tenure extension for President Olusegun Obasanjo and state governors.

The Chairman of the EFCC, Mallam Nuhu Ribadu, said in an exclusive interview with our correspondent in Abuja, that, “Whenever we hear such things, we always act. Even on Friday we did some work. If there was anything we felt was wrong and improper, we always acted. On Friday, we sent some of our operatives to the banks to investigate.

“Definitely, we are acting on this. Our people are out there and if there is anything that shows that there is a large movement of money, we will check it up. We won’t hesitate to intercept and seize the money.

“We went to a bank on Friday and their documents are with us even now. You just wait, because investigations are ongoing and we have to conclude the investigations.”

Unconfirmed reports said one old generation bank (among the first four) and a second-generation bank whose ownership has vast business interests, are also being investigated.

Although the EFCC boss did not confirm it, a source at the commission said the Nigerian Financial Intelligence Unit, an arm of the EFCC, had been placed on the alert to monitor the movement of funds within the bank system.

Reports on Friday had said the coordinators of the controversial third term project had lodged N50million for each pro-third term senator and N40million for each Representative.

THE PUNCH, Tuesday, May 09, 2006


googletag.cmd.push(function() { googletag.display('content1'); });

googletag.cmd.push(function() { googletag.display('comments'); });

googletag.cmd.push(function() { googletag.display('content2'); });