As Senate resumes plenary on Tuesday, the chamber would have to decide once and for all, whether to go ahead and debate a motion on notice which seeks to ascertain whether Nigeria’s apex bank can indulge in extra-budgetary spending without express approval from the National Assembly. The motion on notice, which dwells principally on mobilising non-oil and generating oil dependent revenue into the federal treasury, was sponsored by the Chairman of the Committee on Rules and Business, Senator Ita Solomon Enang, and it has been before the Senate since Wednesday, February 5. Enang’s motion on notice detailed a N240 billion illegal spending by the Central Bank of Nigeria (CBN) and wanted the chamber to consider the whereabouts of the $10.8 billion crude oil proceeds as well as the N255 million spent to procure bullet proof cars by the Nigerian Civil Aviation Authority (NCAA). The motion, which was published in the Senate’s Order Paper of Tuesday, February 5 was supposed to have been debated at February 6 plenary and detailed how money was spent without appropriation which reportedly took place between 2009 and 2013. Suspended CBN Governor, Mallam Sanusi Lamido Sanusi was confirmed for that office by the Senate in June 2009 but the unauthorized spending, according to Enang’s motion actually started from April 27, 2009 and lasted till December 19, 2013. Some of the spendings were to build five star and three star hotels, an international convention centre as well as monies spent on constructing facilities in select universities across the country. The three star international hotel will be a 300- bed facility while the five star hotel will have 200 beds. There would be development of sundry commercial facilities such as shops and restaurants to complement both hotels. The tenders were to have been opened on February 18 at the Second Floor, Wing D, Procurement and Support Services Department of the CBN. Details presented by Senator Enang, as contained in the notice paper, indicated that the CBN spent over N240.2 billion on “intervention projects” between 2009 and 2013, whereas, the document indicated that only three of the 21 projects embarked upon by the CBN were certified by the Bureau of Public Procurement in accordance with the Fiscal Responsibility Act of 2007. Section 21 of the Act specifically mandates government corporations and government-owned companies to, not later than six months from the commencement of the Act and every three financial years thereafter and not later than the second quarter of every year, submit to the Minister of Finance, their schedule estimates of revenue and expenditure for the next three financial years. The minister, shall, in return, cause the estimates submitted to be attached as part of the Appropriation Bill to be submitted to the National Assembly. Enang noted that Sections 21, 22 (1) (2) and 23(1) of the Act mandates the apex bank to operate a general reserve fund to which it shall allocate one-fifth of its operating surplus while the balance of the operating surplus shall be paid into the Consolidated Revenue Fund (CRF) of the Federal Government not later than one month following the statutory deadline for publishing each corporation’s accounts. Such surplus it was further added, would be classified as a Federal Treasury Revenue. In the motion under consideration, Senator Enang averred that infractions of the Act has serious financial implications for the Nigerian budgetary process and consequently, the economy. “The corporations are each to retain 20 percent operating surplus and pay 80 percent to the CRF. This is what the Federal government would use as additional oil non-revenue which could take the budget to about N10 trillion for the year. “If the National Assembly were to budget for these agencies, streamline their operations, determine the operating surplus, sign 20 percent for them and allow 80 percent go to to the federal government for the funding of the budget, then, the budget for the year would be up to N10 trillion, instead of a paltry N4.6 trillion,” he submitted in the motion. Senator Enang further submitted in the motion that only three projects including the N9.5 billion intervention at the Administrative Staff College of Nigeria, Badagry, Lagos, the N2.9 billion intervention project at the Federal Medical Centre, Azare, Bauchi state and the N10.042 billion intervention projects at the University of Abuja were procured according to the Bureau of Public Procurement (BPP) Act. Other projects embarked upon by the CBN include a whopping N98 billion expenditure on development of hotels and sundry commercial facilities for a proposed international convention centre (ICC) to be located in Abuja. The CBN- funded ICC would, on completion, comprise an auditorium, exhibition/multifunctional halls, restaurants, shops, a five star hotel and a three star hotel. The project, said Enang, is allegedly awarded “by the major contracts tenders board of the CBN, without the BPP.” He went further to provide more details about the CBN’s financial transactions which is a violation “How much did the CBN use in buying the NITE building at the Central Area District? How much, and who, was paid to control-bomb the building in demolition which land is now for the CBN five- star hotel and convention centre? Could this money not be used to fund the national budget? “This is in addition to convention centres, hotels and others costing not less than N10 billion each in Jos, Ilorin, among others. Alas, is this the work of the CBN? There’s also the N50 million proposed for one hospital in Lagos, among several others. Again, why should the CBN invite for prequalification for the construction of helipads at some of the business locations of the CBN. “These are done with excess and toxic money which could have been used to fund the federal budget if the Ministry of Finance and the National Assembly had done what the law the Assembly passed mandated them to do. “Who owns who? Is it the CBN that owns Nigeria, or Nigeria that owns the CBN? Is the CBN a government within a government or a government unto itself? Not done yet, Enang continues; “Whereas the objects and core functions of the Central Bank of Nigeria, as other Central Banks of other countries are as in Section 2 stated thus: A. Ensure monetary and price stability; B. Issue legal tender currency in Nigeria; C. Maintain external reserves to safeguard the international value of the legal tender currency; D. Promote a sound financial system in Nigeria; and E. Act as banker and provide economic and financial advice to the Federal Government. “Whereas the actions, investments, corporate donations, among others are not part of the core functions of the CBN nor in any manner ancillary thereto; Whereas the Central Bank of Nigeria has within the last three years committed about N50 billion in intervention in tertiary institutions in the education sector alone, not considering intervention in the health sector, hospitality and tourism among others; “Whereas the NNPC is alleged to have expended $10.8 billion dollars (amounting to N1.7 Trillion at an exchange rate of N160) of which it claims that whatever expenditure the Corporation may have incurred in the discharge of its national responsibilities are backed by the law setting up the Corporation; Whereas the Nigerian Civil Aviation Authority is also alleged to have expended the sum of N255 Million in the purchase of the bullet proof cars; “Whereas it is necessary to consolidate and harmonise the object of expenditure through federal appropriation if the operational surpluses of each of these agencies were paid into the CRF of the Federal Government to be appropriated; and Whereas there would have been no need to apply for foreign loans if the above sums so derived from the operating surpluses were paid into the CRF.” Senator Enang went on to list several other projects to be executed by the CBN and their costs. Tagged Development/Construction of Centres of Excellence, they are University of Port Harcourt, at N10.2bn, University of Nigeria Nsukka, at N6.4 billion; University of Lagos at N14.8 billion, University of Ibadan at N6.8 billion as well as the intervention project at the Uthman Dan Fodio University, Sokoto at N10 billion among others. In its prayer, the motion asks the Senate to mandate “the Senate Committees on Finance, Judiciary, Human Rights and Legal Matters to conduct a public hearing on the loss of revenue into the CRF through evasion of the Fiscal Responsibility Act, acting against and beyond the mandate given by law to the agencies, breach and evasion of public procurement laws and regulations, among others, and in general, for the purposes of determining: “If and whether the funds spent by the agencies listed in the Fiscal Responsibility Act is the 20 percent of their operating surplus, and if it so be, where the 80 percent of their operating surplus were paid into and when; “If the committal of funds by the government agencies are for projects and programmes within the core mandate or in any manner ancillary to the purpose for which they were each set up, etc; “If and whether these agencies are by the provisions of the Public Procurement Act bound to submit their procurement to the BPP to consider, vet and issue a certificate of no objection or otherwise before public procurements are consummated; and by way of peer review, to compare the actions and expenditures of the Central Bank of Nigeria, Nigerian National Petroleum Corporation, Nigeria Ports Authority and other Agencies listed in the Fiscal Responsibility Act with such Treasury or Central Bank of other countries, National Oil Companies of other countries such as United States of America, United Kingdom, Germany, Canada, France, Australia and generally equivalent institutions of other countries and conclude if such institutions in those countries operate in the manner that Nigeria’s do.” While the Senate was indecisive on how to progress on the motion, it certainly cannot ignore the loud rumblings from its members. A section of the chamber wants the Senate to debate the legality or otherwise, of President Goodluck Jonathan’s February 20 suspension of the CBN governor while another would want the executive to conclusively resolve the matter, having directed the Financial Reporting Council of Nigeria (FRCN) to dig further into the report once more.
Posted on: Mon, 10 Mar 2014 18:06:20 +0000
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