How Okonjo-Iweala, Nenadi Usman, others supervised abuse of over N1 trillion special funds

Ngozi Okonjo-Iweala

The Finance Minister would not respond to PREMIUM TIMES enquiry.

Last week Thursday in Beijing, China, President Goodluck Jonathan detailed, in an interview with Chinese television, CCTV, why Nigeria must immediately move away from its perilous dependence on oil and gas as the nation’s sole economic mainstay.

The president said the increasing utilization of shale gas and other alternative sources of energy by the United States and other advanced oil importing nations of the world was a matter of concern for Nigeria.

“That is why we have to increase the pace of diversifying our economy and move our country away from dependence on the oil and gas industry,” the president told his host. “We must work towards greater industrialization; add more value to our agricultural products; develop our solid minerals potentials and other sectors of our economy before the time comes when crude oil may no longer be dominant as a global source of energy.”

How the president intends to achieve that new goal is unclear. But while the clearly familiar declaration offered a promising new zeal, it also shoved back to focus what has turned out a grand deception by Nigeria’s top economists and officials – one that lasted 10 years and left three of the nation’s most vital savings badly depleted.

The ruse, noted in a recent Senate investigation, has been about officials publicly highlighting why Nigeria must grow other sectors in a rapidly unpredictable global economic order. Yet, behind the scenes, same officials consistently ruin the very mechanisms that should help achieve that goal.


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One account needed to address the president’s concern is the Natural Resources Account, created to hold savings needed for the speedy development of solid mineral sector. But over a span of 10 years, those savings have been frittered by the same officials who publicly promote its usefulness, the Senate report stated.

Mr. Jonathan and his two predecessors, Olusegun Obasanjo and Umar Yar’Adua, bear responsibilities for the violation. The report showed how N1.06 trillion stipulated for crucial economic needs, was signed off illegally by the three administrations to fund what lawmakers called “frivolities” that stretched from a phantom new mall to religious pilgrimage.

Six finance ministers superintended over those abuses. Of the 44 total illicit withdrawals between them, Ngozi Okonjo-Iweala, the current finance minister and one of Nigeria’s finest public officials, renowned for her advocacy for disciplined spending, approved at least 22, PREMIUM TIMES can report.

Her immediate successor, Nenadi Usman, now a senator, approved 10; their predecessor, Adamu Ciroma, approved seven, while the remaining three ministers -Shamsudeen Usman (current National Planning minister), Mansur Muhtar (current alternate Executive Director, World Bank) and Olusegun Aganga (current Trade and Investment minister) shared the remaining five.

The funds, illegally drawn by each of the ministers, were meant to help accelerate the exploration for natural resources to quicken the diversification of national economic base from oil and gas, as well as provide a cushion against the volatility of oil prices at the international market. A third account was to help address environmental emergencies.

But the report showed how, for years, the ministers assured a distrustful public how passionate the government was about achieving those goals while behind closed doors, they abused the opportunities for realizing those objectives.

Since the findings were first made public, PREMIUM TIMES has sought clarifications on how the disbursements were made and has repeatedly pressed the finance minister, Mrs. Okonjo-Iweala, who presided over the largest withdrawals between her first and second tours of office, for clarification to no avail.


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Separately, correspondents have put forward enquiries to the minister as well as her spokesperson, Paul Nwabuikwu, at media briefings, through emailed enquiries and telephone calls, asking why she failed to bar the leakages and instead took the lead furthering it.

On each occasion, Mrs. Okonjo-Iweala and Mr. Nwabuikwu have dismissed the concerns as foregone cases, wondering why the media bothers itself with reopening closed chapters.

Mrs. Nenadi Usman, who took over from Mrs. Okonjo-Iweala in the dying days of the Obasanjo administration did not also comment. Calls to her official telephone line were not answered.

The two accounts -Development of Natural Resources Account and Stabilization Account- are stipulated by federal laws to serve clear purposes of helping to develop alternative funding sources for the government, and cushioning the country’s economy against shocks arising from international oil price volatility.

The first account is fed by three percent proceeds from oil sales and the second receives 0.72 percent. The third account, named Derivation and Ecology Account, receives 1.46 percent.

For the Natural Resources Account, N701.5 billion was signed off between 2002 and 2012, while N149.9 billion of the Ecology fund was abused within the same period, the Senate said in its report. N191.8 billion of the Stabilization fund was also spent arbitrarily on unintended expenditure.

Mrs. Okonjo-Iweala took unparalleled lead in misusing the funds. Of the total 16 times the biggest withdrawals were made from the Natural Resources Account, the minister oversaw nine; Mrs. Nenadi Usman four; their predecessor and successors, Adamu Ciroma, Shamsudeen Usman, Olusegun Aganga, one apiece.

For the Stabilization Account, the current finance minister illegally signed off nine out of 12, one during her second stint in 2011. Mr. Aganga approved two and Mrs. Nenadi Usman did one.

The minister only took a beating in the disbursement of the Ecology Fund with Mr. Ciroma signing six; Mrs. Usman five; Mrs. Okonjo-Iweala four and Messrs Shamsudeen and Muhtar approving one apiece.

How they secretly sliced the savings

While the illicit disbursement, which only came to light after the presentation of the Senate report in April, flourished, the sectors they were meant to serve, faced continuing shortages that stifled accelerated search for minerals capable of providing reasonable diversification from oil and gas.

For instance, official funding to the Ministry of Mines and Steel (the supposed beneficiary for the fund) has remained abysmal between the 10 year period, only managing to reach an all time high of N15.95 billion in 2012. Current allocation to the sector stands at N13.95 billion.

By contrast, if the N701.5 billion abused under the Natural Resources Funds had been ploughed into the sector within the decade, each year, an average of N70 billion would have been spent on aggressive exploration activities.

But under the six ministers, the three accounts took the form of a slush account for arbitrarily offsetting spendings not covered by the government.

Mrs. Okonjo-Iweala reached for the savings early in her stint under former president, Olusegun Obasanjo, as she delivered her first illegal approval just nine days after taking office in July 2003, with the signing off of N1.3 billion from the Natural Resources Account as loan to derivation escrow account.

A year later, the minister approved N50 billion loan to finance the 2004 budget deficit and approved N3.8 billion as loan to the Foreign Affairs ministry for the purchase of a Chancery in Tokyo, Japan.

In the months and years that followed, the withdrawals exacerbated. When the ministry of power sought to clear the benefits of its disengaged staff in 2005, N5.7 billion was issued from that account. When aviation ministry needed an intervention fund in 2006, Mrs. Usman approved N11 billion.

Ahead of the two ministers, funds from the triple account were also abused by Mr. Ciroma, who drew N200million from the Ecology Account to Mr. Obasanjo’s “Presidential Research and Communication Unit”.

Mrs. Usman also approved N750 million for an “Abuja mall”, while Mrs. Okonjo-Iweala voted out N16.3 billion from the Ecology funds as loan to the Directorate of Pilgrim Affairs. PREMIUM TIMES’ finding has shown the mall does not exist anywhere.

The loans have not been repaid, the Senate said. Yet, in a manner that would depict Mrs. Okonjo-Iweala’s penchant for abusing those savings, she ordered the release of N5 billion to the Aviation ministry, Identity Management Commission and the National Judicial Council, again just weeks after returning to the job in 2011.

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