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VIDEO: Nigerians react to call for Dogara’s resignation

How to pad the Nigerian budget and become a billionaire (Part 2)

byOgala EmmanuelandRichard Akinwumi
August 28, 2016
3 min read

PREMIUM TIMES has uncovered another budget padding scheme Nigerian lawmakers and cohorts in businesses and the executive arm of the government have deployed to steal billions of public funds through annual budgets.

People familiar with this second strategy have been briefing PREMIUM TIMES since the first story was published.

This strategy is different from our last expose on budget padding which dwelt on how criminally minded lawmakers steal from Nigerian budget by allocating huge sums to themselves in the guise of ‘Constituency Projects.”

Several insiders who briefed PREMIUM TIMES said this second strategy does not involve “Constituency Projects,” but solely conceptualized to steal.

It involves lawmakers adding huge sums into the budgets of legitimate government agencies to get paid 30 per cent of the padded sum once the budget is signed into law by the president. Of course, the 30 per cent upfront payment does not stop them from forwarding companies for the phantom contracts.

“The lawmakers are usually in a hurry to collect their money,” sources knowledgeable about this strategy told PREMIUM TIMES.

This strategy which has existed for more than a decade networks the lawmakers with budget jobbers – mostly miscreants – criminally minded businessmen, and government officials.

The network consists of the following:

Lawmakers: Made up a network of the leadership of the National Assembly and
groupings of lawmakers in both chambers. Insiders say conceptualizing a padding project is as easy as network henchmen coming up with a sum, say N50 billion.

The sum is then split between both chambers. “Usually, Senators receive the lion share,” a source told PREMIUM TIMES.

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Within each chamber grouping, leaders take the bulk before sharing whatever is left with others.

The ideation includes coming up with probable candidates for the actors in the network.

Agents (Budget Jobbers): As a lawmaker, it is highly risky to go cajole a government official into a budget padding scheme. It may backfire if the target official does not buy into it and one would have been exposed to evidence based blackmail and embarrassment. They therefore need an isolatable agent to clear the grounds.

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Budget jobbers consist of a ring of swindlers, racketeers and touts. They have no known professional jobs and serve mainly as facilitators. They serve as agents of the lawmakers and courier information between every other member of the budget padding gang who has a reputation to protect. They are the kind of people who have nothing to lose and are willing to take the high risk of testing the waters. When a deal is conceived by the lawmakers, these jobbers are recruited. They in turn recruit every other member of the network.

Executive Arm Collaborator: To successfully pad the national budget, lawmakers need a cohort in the executive arm of government. Chairmen of presidential committees are preferred. Because these committees are transient, it is easier to obliterate financial documentations in history. Other target executive agents sort are heads of commissions or agencies, director generals or ministers. These executive agents provide the platform for the padding – they provide a legitimate body to receive allocation from the budget. These executive arm agents make their committees, agencies or ministries available to be used as a cover for smuggling the padded funds. They are recruited into a deal by the agents. Their participation earns them obscene amounts.

Money Bags: When this system of padding is preferred over constituency projects, the lawmakers involved are usually in a hurry to be paid. They have a standard 30 per cent of the entire sum padded paid immediately the budget is signed into law by the president. Because funds are usually not released immediately, a Money Bag is recruited.

Money Bags, usually high network business people, bankroll the 30 per cent upfront payment to the lawmakers. In return, they are made “contractor” of choice for the Executive arm member of the gang. Over the course of the year, the Executive Arm Collaborator awards the Money Bag phantom contracts to cover the 30 per cent investment and make huge profits.

Through the contracts awarded to the Money Bag, the Executive Arm Collaborator and everyone within his circle is paid.

“Usually, a little amount is left because the lawmakers come back from time to time to either ask for money directly or nominate a contractor for a phantom project,” a source said.

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How to Pad the Nigerian Budget 2

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Ogala Emmanuel

Ogala Emmanuel

Emmanuel Ogala is an investigative reporter and heads the Digital Strategy unit of PREMIUM TIMES. Emmanuel, an experienced web developer. Before joining PREMIUM TIMES, Emmanuel worked for 234NEXT. His stories have won awards in the 2014 CNN-Multichoice African Journalist of the Year award and the 2013 Wole Soyinka Centre for Investigative Journalism awards.

Richard Akinwumi

Richard Akinwumi

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