Obasanjo's 15 Secret Accounts – By Tobs Agbaegbu (Newswatch)

2 Comments » January 22nd, 2008 posted by // Categories: Nigeriawatch



 

NEWSWATCH

Obasanjo’s 15 Secret Accounts

By Tobs Agbaegbu
Monday, January 21, 2008

This is the untold story of how they were opened, the names they were called and how much was left in them as balances

But for the controversial ’16 hidden accounts’ recently discovered by the National Assembly and into which billions of Naira were lodged by the executive, the 2008 budget would have been passed by now. The discovery has stalled further deliberation on the budget by the lawmakers. The result is that the nation now gropes in the dark with regards to the fiscal direction of President Umaru Yar’Adua’s administration in 2008, four weeks into the new year.

That seeming state of confusion was what the president attempted to address recently. As the revelations of the secret accounts reverberated and shocked the nation, Yar’Adua embarked on a trouble shooting mission, and called principal officers to a meeting at Presidential Villa in Abuja. During the meeting held on January 12, Newswatch learnt that Yar’Adua offered explanations, assuring them that Shamsudeen Usman, the minister of Finance would be directed to furnish them with the details. Dimeji Bankole, the Speaker, House of Representatives who confirmed the meeting told journalists it was not a panicky meeting. “It was a unifying meeting between the executive and legislature. We were able to discuss naturally on grey areas,” he disclosed.

Yar’Adua’s directive has been carried out by the minister and Newswatch is in custody of the document containing details of the controversial accounts. In his letter to the legislators titled, “Reviews/Identification of Fifteen Special Accounts,” Shamsudeen disclosed that what rather exists are 15 Special Accounts and not 16 as reported in the media. Out of the 15, he said “10 have legal backing, (and) two were as a result of fiscal policy pronouncement; one was abrogated in May 2007.” He was however, silent on the remaining two.

As at the time of the minister’s report, the 15 accounts were said to contain various sums which, when added to other unspent money from all ministries, parastatals and agencies of the federal government is about N300 billion.

The first of the 15 accounts identified by the Finance Ministry was named as “0.5 percent ECOWAS Exes. Sect (ETLS).” It was said to have been established by Law in 1996, under ECOWAS agreement. The balance in the account as at December 31, 2007 was put at N13,479,065,471.38, and the beneficiary is said to be the ECOWAS Commission.

The second account was reported by the minister as two percent Levy on Import Vehicles (NAC). He explained that the law establishing the account has been abrogated but that it contained N6,470,071.89 as at the end of December last year.

The next account was called “one percent Comprehensive Import Supervision Scheme (CISS) Pool Account” which contained N13,263,552,511.29 as at the end of December 2007. The minister told the legislators that this was established by Import Act No. 11 of 1996 and used for the payment of destination inspection agents. All details of money accruals in the various accounts were stated as at December 31, 2007.

Another account was called “two percent Education Pool Account” established under the Education Act No. 7 of 1993 and Education Tax Fund Act No. 78 of 1993. The minister put the total amount of money in the account as N50,539,155,098.15.

The fifth Account was called “five percent Sugar Levy Pool Account” which has a balance of N2,827,626,647.66. It was said to have been established by the National Sugar Development Act No. 78 of 1993.

Also disclosed by Shamsudeen was “seven percent Post Levy Pool Account” which he said was created by a Fiscal Policy Pronouncement. He did not state when the pronouncement was made but the balance in the Account is N6,874,664,986.68.

The seventh was called “Nigeria Export Supervision Scheme,” NESS, and has a balance of N937,371,487.81. It was reported to have been established by Pre-Shipment Inspection Act No. 10 of 1996.

Two other accounts respectively called “Cocoa Levy Account and Monetisation Proceed (Motor Vehicle) Account” were said to have come into being as a result of a Federal Executive Council, FEC, decision. The time the decisions were taken was not stated by the minister. He, however, gave the balance of money on the Cocoa Levy Account as N67,831,287.44 and Monetisation Proceed Account from Motor Vehicles as N1,010,580,342.06.

Another Account called “10 per cent Levy on Rice Import Account” was reported to contain a balance of N5,627,299,597.16. It was said to have been established as a result of a Fiscal Policy Pronouncement of the Federal government. The 12th, called “FGN Independent Revenue” from MDA and MOFI Revenue has a balance of N1.75 billion.

Shamusedeen admitted the existence of three other accounts, which took the number of the secret accounts to 15. One of the three did not contain figures of money standing as balance. It was called CBN/FGN/Independent Revenue Account, calculated in US dollar. The minister merely told the National Assembly that the account is meant for collections from embassies and related agencies abroad, such as visas, passport, etc.

The 14 accounts was called FGN signature Bonuses and has a balance of $676,558,182.95. The minister explained that all the revenues in this account are meant to finance Petroleum Trust Development Fund, PTDF, activities as established under the PTDF Act of 2003, which was later amended as PTDF Act of 1999.

The last of the 15 accounts was called “BASSA Pool Account,” established Under the Civil Aviation Act 2006. The balance of money in the account was put at 32,735,917.66 of US dollar, as at December 31, 2007.

Newswatch learnt that the legislators insisted on knowing details of the special accounts because of the suspicion that the former President Olusegun Obasanjo’s administration used money in the accounts for purposes they were not meant for. One area, which created immediate suspicion was the PTDF account. Under the Act, one percent of all payments from oil block sales were supposed to go for PTDF activities in manpower development for the Petroleum and Gas sector. Newswatch, however, gathered that Obasanjo did not allow all accruals from the one percent to be paid to PTDF but rather pegged it at $100 million per annum. He never sought the approval of the National Assembly to divert the excess from the one percent to other matters.

With the new revelations from the finance ministry, actual consideration of the 2008 budget began last week. Kanti Bello, chief whip of the Senate, told Newswatch that the National Assembly was happy with the response of President Yar’Adua which led to the disclosures, adding that the Senate was now moving forward with the last lap of the budget’s approval. He confirmed that the Senate might tinker with the benchmark of $53 proposed by Yar’Adua. Bello said: “This is an idea that has been muted by us but the discussion is still on-going. I can tell you that the discussion on possibility of raising the benchmark to $59 is still inconclusive. We will still look into the proposal when we reconvene this week.”

It is not clear, by press time, what the executive intended to achieve by the failed attempt to conceal information on the existence of the 15 secret accounts. Bello believes Yar’Adua had no hidden agenda on the matter. He told Newswatch that the President is a man who means well for the country and actually plans to run an open and transparent government. He believes that civil servants should rather be held responsible for whatever mistakes were made by the executive on the budget. “The original budget proposal was prepared by civil servants and they had been accustomed to doing it that way in the past,” he said.

Rather than see it as an attempt to divert funds, some observers say it is part of the confusion that has characterised the Yar’Adua administration in recent times. The thinking of majority of legislators in the National Assembly appears to be that Yar’Adua may have been misled by Bureaucrats to withhold the information, for reasons which may not be known to the President. Indeed, Ayogu Eze, chairman of the senate committee on Media and Information captured this line of thought when he addressed journalists on the matter. He said: “It used to be the practice that at the end of the year like this, there was a bazaar for top civil servants who come around and then preside over what is left over. That practice is what the National Assembly is now saying is over.”

One notable feature of the Obasanjo’s administration for which it was roundly condemned was the keeping of some secret accounts which simply became honey pots for personal enrichment of key officials. A case in point was the PTDF account which was a subject of open dirty name-callings between Obasanjo and Atiku Abubakar, his deputy. The office of the vice-president originally supervised PTDF before Obasanjo stripped the then vice-president later in a letter to the National Assembly that accused his deputy of mismanaging the funds.

But Abubakar fired back. He said the culprit was his boss who had taken over control of the place and actually bought a brand new car for a female friend from PTDF money. The excess crude oil account operated by Obasanjo’s administration wears another source of abuse. The account was opened when the price of crude oil hit the roof at the international market far beyond the bench -mark upon which Nigeria’s budget was predicated. The Revenue Mobilisation and Fiscal Allocation Commission, RMAFC, has not been comfortable with the running of ‘special accounts’ by the federal government.

In 2007, the commission in a 77-page report said the excess proceeds account was illegal. It also condemned the way the federal government was running the Federation Account. Specially, RMAFC said it was “very concerned about the way the Federation Account is being managed. Particularly, the issues of unilateral deductions and withdrawals, withholding of revenues by collecting agencies, etc have become a recurring decimal, thereby subjecting the management of the account to criticisms by stakeholders and the general public.”

When Yar’Adua addressed the National Assembly on November 8, last year, and presented a budget of N2.4 trillion with $53 as the benchmark, for the 2008 fiscal year, he merely gave the figures of proposed income and expenditure. On the occasion of the budget presentation too, Yar’Adua announced that he had signed into law, the Fiscal Responsibility Bill initiated in 2004 by Ngozi Okonjo-Iweala former finance minister, which the National Assembly approved and passed. He explained that the act was meant to inculcate budgetary discipline in public servants and enhance transparency in fiscal activities, especially in due process observance and accountability in government finances.

There was no mention of the fact that a huge sum of money standing as balance in 15 accounts regarded by previous governments as special accounts as well as unspent money from the 2007 budget were still outstanding. The only mention by the President about unspent money was when he explained that the relatively low utilisation of the 2007 capital budget accounted for the reduction in 2008. Usman, the finance minister, said nothing about actual figures and details of the unspent money and special account in his communication with the National Assembly on the budget in spite of the provision in the constitution, that all monies belonging to the Federal Government of Nigeria must be channelled to the Federation Account.

It was with shock, therefore, that legislators discovered soon after the budget presentation that the executive had concealed some vital information, which it needed in order to meet its deadline on the passage of the budget. It was a clear indictment on the President’s much touted policy of transparency, openness and rule of law but more so on Obasanjo whose administration operated those accounts.

It took the eagle eyes of the House of Representatives to discover that the executive had, indeed, withheld information on about N300 billion, part of which is contained in some special accounts dubbed secret accounts by the media.

The figure actually became public knowledge and raised national curiosity, during the plenary session on the floor of the House, when Festus Adegoke, chairman of the Appropriation Committee presented an interim report to members, on Thursday, January 10. He spoke on the progress made and the discovery by the committee of 16 special accounts in which the revenue of the federal government are kept but which are not captured in the 2008 Appropriation Bill. Usman admitted the existence only 15 of such accounts.

Adegoke said the House was not able to fulfill its promise to pass the budget on December 27, 2007, because the information required from the executive to enable the House to do a better job was not provided. Among others, Adegoke said his committee was yet to receive the “Revised Revenue Profile, Disclosure of all Special Accounts and Reports of Unspent/Unreleased Capital funds for 2007.”

John Enoh, chairman of the Finance committee of the house, told journalists that the committee’s engagement with the accountant-general of the Federation first gave out the Information. He said the meeting “brought us face-to-face with the special accounts” and the accountant-general explained that these accounts were generally regarded as hidden but they are not really so.

Adegoke was hesitant in revealing the said shocking findings of his committee. The real bomb shell came from Usman Nafada, the deputy speaker.

Speaking after Adegoke’s presentation, Nafada put the total amount of unspent fund in the 2007 budget at N300 billion and noted that about $678 million was discovered in the signature bonus account while between N70 and N80 billion were mopped up from the 16 special accounts held by federal government ministries and agencies.

Bankole, House of Representatives speaker commended the efforts of the committee, noting that the pain being taken by the National Assembly, to do a thorough job, had yielded results with the discovery of some unspent funds. “It is necessary we take every detail of the budget and work on it thoroughly. We have to do a thorough job so that the time we have waited pays off,” he said.

Farouk Lawan, committee chairman on Education and Patricia Etteh, former speaker also supported. Lawan said in the last eight years, it had been very difficult for the assembly to discover the special account, adding, “in the last eight years, efforts were made to get the Executive to disclose all those figures but nothing came out of these efforts. I concur that the committees be allowed to do a thorough job, at least one to two weeks so that the amount of money discovered be utilised in areas that are critical and the benchmark determined,” he said.

David Mark, senate president said a seven billion Naira unspent money was paid to the senate and had to be returned. He said the legislature was disappointed with the action of the affected authorities. He said those who did it knew there is a law forbidding the carry over of funds from the previous year into another. “It is unfortunate that the funds were not released to the Senate until December 31, 2007, knowing fully well that all unspent funds have to be returned to treasury by that date. In accordance with the Fiscal Responsibility Act, we also know that due process must be complied with in incurring any expenditure. As lawmakers, we were not, therefore, prepared to breach the standards set to ensure proper accountability and transparency in the conduct of government business. It is our hope that other arms of government have similarly complied with this principle and in other to ensure and sustain compliance, I wish to implore, the President and to effect the establishment of the Fiscal Responsibility Commission as provided for by the enabling Act,” Mark said.

Similar complaints of non- disclosure of full information on the budget by the executive also came from the Senate. Ayogu Eze, on January 8, said the executive brought a budget that did not have a sustainable substructure. “We cannot put the super-structure on a weak sub-structure and the sub-structure is the revenue profile upon which all assumptions and benchmark are anchored,” he said.

Eze said the senate believes there are still funds trapped outside the budget and that the senate has returned about N7 billion to the treasury as unspent money from the 2007 budget. While urging other arms of government to follow suit, Eze said: “It used to be the practice that at the end of the year like this, there was a bazaar for top civil servants who come around and then presided over what is left over. That practice is what the National Assembly is now saying is over.”

The musings and insinuations from the National Assembly swept the Presidency off the ground. Yar’Adua was compelled to order full disclosure of all federal government accounts. In a statement issued by Olusegun Adeniyi, special adviser to the President on Communication, in Abuja, January 8, the President said, in keeping with his total commitment to upholding the principles of openness, transparency and full accountability in the management of public funds, he had not approved the operation of any “special account” or the authorising of details of such accounts from the National Assembly and the public. Adeniyi said: “Indeed, the President directed the minister of Finance last week to make an immediate and full disclosure to the National Assembly of all accounts kept and operated by the Federal Government. President Yar’Adua wishes to assure the National Assembly, once again, of the fullest cooperation of the executive and the speedy provision of all required facts and figures to facilitate the passage of the 2008 appropriation bill.”

Additional Report by Mikail Mumuni and Anza Phillips.

 

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2 Responses to “Obasanjo's 15 Secret Accounts – By Tobs Agbaegbu (Newswatch)”

  1. Dominic says:

    The national assembly appears to be living up to its responsibilities, which is a very good thing. Let’s hope the best is yet to come.

  2. Prince Kabir Abubakar says:

    Regular people like you and I should make every effort to participate in expressing their opinions on issues of national importance, like in this case. This will eventually create a momemtum strong enough to withstand any reaction from the reactionary forces that intend to keep our country down. I commend this disclosure! Kabir of http://www.KebbiState.com

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