NASS panel uncovers ghost contracts, others in 2024 budget of ministry

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The National Assembly Joint Committee on Steel Development says it has uncovered some fraudulent activities in the Federal Ministry of Steel Development.

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Members of the committee disclosed this when the Minister of Steel Development, Shuaibu Audu, appeared before it to defend the ministry’s allocation in the 2025 Budget on Friday.

The committee said the officials allegedly engaged ghost contractors to execute projects listed in the 2024 budget.

They said there was no evidence of the implementation of several supposedly awarded and funded projects.

The committee members also found inconsistencies in the financial breakdown the ministry provided.

Projects show no evidence of execution or impact

During the session, the Chairperson of the House of Representatives Committee on Steel Development, Zainab Gimba, condemned the lack of accountability in project execution, noting that an appraisal of the minister’s report exposed multiple financial discrepancies.

“A first-hand appraisal of the 2024 submissions shows some budget infractions as funds allocated for unspecified capacity-building programmes and skills training initiatives in the steel sector show no evidence of execution or impact,” she said.

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Mrs Gimba, who represents the Bama/Ngala/Kala Balge federal constituency of Borno State, alleged that “these projects risk being classified as ghost projects designed to divert public funds.”

She also pointed out that administrative and recurrent costs significantly increased in 2024 without proportional increases in the ministry’s activities or outputs, a possible indicator of mismanagement or misallocation of funds​.

Violations of the Fiscal Responsibility Act

Mr Gimba also flagged legal violations in the ministry’s handling of funds.

She noted that several projects under the ministry, particularly those linked to Ajaokuta Steel company, failed to meet the criteria prescribed by the Fiscal Responsibility Act, which mandates efficient use of public resources and proper accountability for project outcomes.

“Also, we identified some legal Infractions, such as violations of the Fiscal Responsibility Act. The Act mandates efficient use of public resources and accountability for project outcomes.

“Several projects, especially related to Ajaokuta Steel, failed to meet these criteria,” she stated..

Projects violate financial regulations Act

Mrs Gimba also discovered that many expenditures violated Nigeria’s Financial Regulations, requiring every disbursed fund to be accounted for with appropriate documentation.

“There are ghost projects which are a direct violation of Nigeria’s Financial Regulations, which require all expenditures to be backed by documentation and outcomes.

“We advise you to make all necessary submissions on these to the committee secretariat,” she added.

Demand for forensic audit

The lawmaker called for an independent forensic audit of the ministry’s accounts due to the financial mismanagement cited in the report.

She recommended that an external auditing firm be engaged to scrutinise all expenditures and contracts awarded in 2024.

“On this note, we recommend conducting a Forensic Audit. There should be engagement of independent auditors to scrutinise expenditures and contracts for 2024,” Mrs Gimba said.

She also assured the committee would enhance its oversight functions in 2025 and promised to hold the ministry accountable for further infractions.

“We will strengthen oversight in 2025 because, looking at the Ministry of Steel Development’s 2025 Executive Budget, we see a high proportion of personnel costs at 57.2 per cent.”

Mrs Gimba expressed dissatisfaction over the lack of transparency from agencies under the Ministry of Steel Development.

She warned that the National Assembly would no longer tolerate attempts to withhold critical budgetary information.

“It is equally disappointing and unfortunate to recollect how the agencies under the ministry failed to provide enough information to the Committee during their budget defence. We will not leave any stone unturned in the discharge of our legislative duties.

“It is a fact that if the legislature does not rigorously examine and debate the law, its powers will be seen as not being effectively exercised, and the government’s accountability to the electorate for its fiscal strategy and strategic budget allocation will be undermined.”

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She further emphasised that lawmakers would use all constitutional provisions at their disposal to prevent future misappropriations.

“We want to state unequivocally that we will never allow such affronts or practices to happen again because we would not hesitate to apply the hammer according to the powers statutorily vested on our committee,” Mr Gimba stated.

We can’t keep repeating the same mistakes every time

The Senate Committee on Steel Development Chairman, Patrick Ndubueze, also complained about the ministry’s inefficiencies.

Mr Ndubueze, a senator for Imo North, called for a stronger focus on capital projects rather than wasteful recurrent expenses.

“Nigeria can’t make much progress without a solid steel industry. We have to place emphasis on capital projects, not payment of salaries.

“For us to do well, we can’t be repeating the same mistakes every time. We expected that the ministry would have improved by now,’ he said.

Other committee members also echoed the sentiments of the two chairpersons.

They stressed the urgent need for an independent audit to unravel the full extent of the financial irregularities.

Minister promises reform

Responding to the lawmakers’ concerns, Mr Audu pledged to address all the issues raised and implement corrective measures.

He assured the committee that the ministry would make significant improvements in executing its 2025 budget.