Chairman of the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC), Engr. Hamman Tukur, yesterday disclosed that former President Olusegun Obasanjo and his finance minister, Dr. (Mrs.) Ngozi Okonjo-Iweala, took a loan out of the excess crude money
in the Federation Account to finance the National Integrated Power Project (NIPP) just as he said the administration compelled contractors to pay one percent commission either in local or foreign currency to some anonymous persons on every contract awarded under the NIPP.
Although the finance minister, Dr. Shamsudeen Usman, described the loan as semi-legal, he explained that the one percent commission on NIPP contracts is the statutory fee charged on all foreign transactions by the Central Bank of Nigeria (CBN).
Meanwhile, chairman of the probe panel, Hon. Ndudi Godwin Elumelu, yesterday declared that the committee will not hesitate to summon former president Olusegun Obasanjo and his vice, Atiku Abubakar, if the need arose in the course of compiling their report. He stated this in his closing remarks at the end of the sitting.
Tukur, who testified on the final day of the House Committee on Power and Steel’s public hearing on the $16 billion allegedly spent by the previous administration on the power sector, said it was when the commission insisted that the executive must operate in line with the laid down laws before money belonging to the three tiers of government could be used for any project that the former minister of finance, Dr. Ngozi Okonjo-Iweala, wrote the National Assembly seeking approval to use part of the excess crude money in the Federation Account as loan to finance the NIPP projects.
The RMAFC chairman said he was not sure whether the National Assembly granted such request, but that the commission decided to go to court seeking interpretation of what the law said about a sitting president taking loans from the federation account.
"Our worry was that our elected body, the National Assembly was informed, but we don't know if such approval was given. We were still waiting for the court decision when funding was transformed to the funding of NIPP projects," he added.
He said by RMAFC’s records, a total of $3.9 billion was taken from the Excess Crude Account for the purpose of the power sector, which he said contradicted the figures quoted by the Central Bank of Nigeria (CBN) and the Accountant General of the Federation (AGF).
He attributed the differences in the figure quoted by the Central Bank of Nigeria (CBN) and the accountant general of the federation (AGF) to the payment of the commission.
The RMAFC chairman told the panel that he raised alarm when it was discovered that the money was being taken under a strange sub-head, which unfortunately led to a confrontation between the executive and the commission in their desperate effort to give legitimacy to their action.
"First, they called it Niger Delta Power Holding Company when we drew the attention to this development that it was wrong, they quickly changed it to NNPC Joint Venture and Gas Account and $213 million was withdrawn on 28 December, 2005. Because of our persistence that this withdrawal was illegal, the name changed to funding of NIPP projects," he narrated.
When funds were being taken away to finance NIPP projects under Niger Delta Power Holding Company (NDPHC), Tukur said that the commission demanded for documents showing the amount committed as a holding company by the owners, which he confirmed was never produced.
On the one percent commission on NIPP projects, Tukur said it was just a tip of the iceberg on the innumerable illegalities committed by Obasanjo and his financial administrators in the management of the federation account.
"Our greatest worry is that we do not know who got the commission and where it was paid to".
"On 6 March, 2005, the sum of $209 million was paid as commission, a week later, $249 million was paid, April 3rd, 2005, $44 million was paid. This was going on whereas we keep on asking questions, but there was no answer.
"This was why we set up an ad-hoc committee to check if these projects were actually in place. One of such committees was headed by Ambassador Kabiru Rabiu, who is present in the hall," he said.
Tukur also told the committee that it was the CBN that was keeping the accounts of NIPP, while payment was made on instruction of the minister of finance through the office of the accountant general of the federation.
He accused the CBN of flouting the order of President Umaru Yar'Adua that payment on NIPP projects should stop by June 2007, saying that as at December 2007, some contractors were still being paid.
The minister of finance, Shamsudeen Usman, while testifying, however, explained that the loans from the federation account were semi-legal loans taken by Okonjo-Iweala for the NIPP projects. He said that government was forced to take the loans because some states actually refused to continue with the projects.
"The loans from the federation account were in an attempt to find a solution because some state governments complained or were not sure why monies were being taken out of the federation account which belongs to all the three tiers of government.
The basis was to try to get some administrative semi legal arrangement whereby the investment is being done on behalf of all tiers of government and therefore it’s like taking money from the federation account to invest in NIPP.
He said the intention of government was that when power projects are completed and privatised, the money realized from selling the plants would be repaid to the account.
On the letters of credit opened for the contractor by the NIPP, the minister admitted that the accounts were lodged with international banks and that interests are being paid which he could not confirm the amount since the figures were yet to be reconciled.
The minister also agreed that there were differences in the figures released by the accountant general of the federation and the ministry because we are still reconciling the figures. But actually they are not much and we will get the accurate figures.
Usman, who said what government actually withdrew from the excess crude Account was $3.067 billion dollars and another $80 million for the Ibom Power project located in Akwa Ibom State.
He gave the detailed figures released between 1999 and 2007 as follows:
•1999: Capital N11.2bn, released N6.697bn, recurrent N2.074bn, released N1.425bn;
•2000: Capital N59.064bn, released N49.784bn, recurrent N2.414bn, released N3.225bn;
•2001: Capital N103bn, released N70.9bn, Recurrent N3.922bn released N5.22bn;
•2002: Capital N63.942bn, released N44.196bn, recurent N6.518bn released, N6.059bn;
•2003: Capital N50.587bn, released N5.207bn, recurrent N13.089bn, released N8.03bn;
•2004: Capital N54.624bn released N54.494bn, recurrent N4.311bn released N4.162bn;
•2005: Capital N91.114bn, released N71.886bn, recurrent N2.179 released N3.648bn,
•2006: Capital N74.7bn released N74.308bn, recurent N3.382 bn released N3.184 bn;
•2007: Including supplementary budget, capital N100.78bn, released N100.098bn recurrent N4.698bn released N3.401bn.
The figures released by the minister clearly indicated that monies appropriated were not released in full or were over- shot by the executive which the lawmakers promised to tackle.
The minister of justice and the attorney general of the federation, Mr. Michael Kaase Aondoakaa, who also appeared yesterday , could not deny seeing the court injunction restraining the federal government from deducting the said N9bn from the federation account of Lagos State government but said he was going to cross-check the records in his office.
By Philip Nyam
Leadership Nigeria
Friday, March 21, 2008
