How 3 Nigerian Presidents wasted N247 billion oil savings, gave illegal loans to NSA, Sao Tome
Many Nigerians would not know where Sao
Tome is on the world map, given that the
twin island country is of little, if any,
strategic importance to Nigeria.
That however did not stop former President
Olusegun Obasanjo, in 2004, from doling out
$5 million as loan to that nation. Mr.
Obasanjo also paid out $40 million as loan to
Ghana same year.
Such were the frivolity and impulsiveness
that characterized government spending since
the return to democracy in 1999.
Between 2004 and 2014, a catalogue of fuzzy
loans was indiscriminately granted in off-
budget spending to government agencies in
what appeared an attack on the nation’s oil
savings.
Extra-budgetary sums were dispensed in the
name of loans to the foreign countries, the
Independent National Electoral Commission
(INEC), Inspector General of Police (IGP),
the National Security Adviser (NSA), the
Ministry of Defence and other agencies.
Minutes of the December 2014 meeting of
the Federation Account Allocation
Committee (FAAC) Post-Mortem
Subcommittee obtained by PREMIUM
TIMES show that these funds were
discretionary, off-budget loans paid out of the
Reserve Accounts especially the 0.5%
Statutory Stabilization Fund.
According to the report, the loans granted by
Mr. Obasanjo to Ghana and Sao Tome came
from the Statutory Stabilization Fund
Account.
Over N18 billion was also taken from the
reserve account as loan to the Federal
Government for its Pioneer Consumer Car
Scheme for public servants in paramilitary
agencies.
In August 2006, the then President Obasanjo
granted N4.58 billion as the first loan while
the second and third tranches of N2.8 billion
and N10.76 billion were granted in May and
December 2007 respectively under the
President Umaru Yar’Adua administration.
From the Statutory Stabilization Fund
Account, Mr. Obasanjo had pulled out N300
million for IGP to purchase vehicles. In June
of 2006 N242.6 million was paid out.
Between June and October, two other loans
were granted for the same purpose to purchase apparently
another set of vehicles.
The amounts were N33.9 million and N32.6 million
respectively. Separate loans of N4.57 billion and N1.6
billion, dated February 14 and April 3, 2007 were tagged
“Loan granted to Fund for 2006 Virement”.
Notwithstanding provisions already made in the budget,
INEC, on two occasions, was granted loans to fund the 2011
and 2015 general elections. In May 2007, over N66.7 billion
was given to INEC to fund the 2011 General Election. In
December 2013, N3 billion was withdrawn from the
Statutory Stabilization Fund Account and given as loan to
INEC to speed up its readiness for 2015.
Given that the Statutory Stabilization Fund is a special fund
that requires constitutional mandate for its appropriation, the
indiscriminate manner in which the loans were approved for
these agencies showed a serial disdain for due process.
In September 2010 and February 2011, about N80 billion
was taken from the Excess Revenue Domestic and Non-Oil
Excess Revenue Accounts as amount borrowed to pay
States’ London Club Debt Buy-back. The money was taken
in three installments. While the first N48.44 billion was
withdrawn from the Non-Oil Excess Revenue Account in
September 2010, two other withdrawals of N28.7 billion and
N2.83 billion were made from the Excess Revenue
Domestic Account respectively.
While some of the withdrawals might be explained as
prudent in terms of meeting exigencies associated with
economic crisis, the manner they were done were
underscored as weak resource governance and mere
financial gaieties.
On the part of former President Jonathan, series of loans
approved by him were to defence and security. They had the
most impact in depleting the nation’s oil reserve. For
instance; a loan of N5.5 billion was given to the Office of
National Security Adviser in December 2013, for an
undisclosed purpose. In the same manner, a loan of N2.56
billion was given to Chief of Naval Staff Coast Guard in
December 2013 for equally undisclosed purpose.
In what could be said to be an emerging pattern, a loan of
N2.56 billion was given to Chief of Naval Staff Coast Guard
in 2013. Again the purpose was not declared. Two
outstanding loans to the Nigerian Army for training and
kitting of recruits were approved at a cost of N2.6 billion
and N1.56 billion respectively.
Other loans given to the military in 2013 included a N7.3
billion loan to fund Military Pension Scheme, N8.48 billion
loan to Fund Military Pension Scheme, N2.36 billion loan to
the Army as Operation Internal Security and N10.8 billion
loan to Ministry of Defence Headquarters.
In 2014, over N2.4 billion was also withdrawn as loan to
Nigerian Air Force Operation to meet financial requirements
under what was tagged as ‘Air Operation’. Another N2.36
billion was granted as Loan to Nigerian Army Quick
Response Group and forward operating Bases.
The establishment of the Excess Crude Account (ECA) in
2004 and the Sovereign Wealth Fund (SWF) in 2011 was
essentially to save for the rainy day. These accounts were
respectively populated with the excess dollar revenue that
came in periods when oil prices became higher than budget
benchmarks.
These excess funds would have come in handy for Nigeria
as the world is hit by falling oil prices. At various times
state governors insisted that these accounts be emptied and
shared among the federating states.
Other loans granted between 2013 and 2014 included a
N9.19 billion loan for subscription to Islamic Development
Bank shares; N2.35 billion loan to the Department of
Petroleum Resources as 4% Cost of Collection for month of
September, 2014; N8.27 billion loan to the Federal Ministry
of Power, another loan of N1 billion to the same Ministry of
Power; N3.36 million to the Federal Ministry of Finance for
verification of solid minerals and N350 million loan to
Nigeria Mortgage Refinance Company Plc.
Yet, other loans were N1.99 billion purportedly released to
Health Intervention Workplan/Budget on Ebola Virus
Disease; N2.39 billion to Standard Alliance Assurance Ltd
being 2013 Armed Forces Group Life Assurance Premium.
All the loans, which remained outstanding by October 31,
2015, violated Nigeria’s fiscal responsibility law and this
has made the FAAC Post-mortem committee to recommend
that the Office of Accountant General of the Federation
(OAGF) examine the loans and grants to ascertain those that
need to be written off.
Details of the loans to NSA, MoD and other security
agencies are shown in the table below.
Description
of Loans to
Security
Agencies Date Account
from which
the amount
was
borrowed Amount
outstanding as at
31-10-2015 (N)
Loan granted
to Ghana
($40 million)
and Sao
Tome ($5
million) 9/22/04 0.5%
Statutory
Stabilization
Fund
Account 827,578,112.70
Loan granted
to IGP for
purchase of
vehicle 6/22/06 0.5%
Statutory
Stabilization
Fund
Account 242,645,472.70
Loan granted
to FGN for
Pioneer
Consumer
Car scheme 8/7/06 0.5%
Statutory
Stabilization
Fund
Account 4,580,507,118.53
Loan granted
to IGP for
purchase of
vehicle 0.5%
Statutory
Stabilization
Fund
Account 33,936,500
Loan granted
to IGP for
purchase of
vehicle 10/5/2006 0.5%
Statutory
Stabilization
Fund
Account 32,626,027.60
Loan granted
to FGN for
Pioneer
Consumer
Car scheme 12/8/07 0.5%
Statutory
Stabilization
Fund
Account 10,757,175,000
Loan granted
to Fund 2006
Virement 2/14/07 0.5%
Statutory
Stabilization
Fund
Account 4,573,773,678
Loan granted
to Fund 2006
Virement 4/3/07 0.5%
Statutory
Stabilization
Fund
Account 1,600,338,003
Loan granted
to FGN for
Pioneer
Consumer
Car scheme
for Public
Servants in
the
Paramilitary
Agencies
5/9/07 0.5%
Statutory
Stabilization
Fund
Account 2,800,000,000
Loan to FGN
CRF for
funding
INEC 2011
General
Election 5/22/07 0.5%
Statutory
Stabilization
Fund
Account 66,721,961,807.18
Amount
borrowed to
pay States’
London Club
Debt Buy-
back September,
2010 Non Oil
Excess
Revenue
Account 48,438,019,698.18
Amount
borrowed to
pay States’
London Club
Debt Buy-
back February,
2011 Excess
Domestic
Account 28,700,000,000
Amount
borrowed to
pay States’
London Club
Debt Buy-
back February,
2011 Excess
Domestic
Account 2,834,278,720.30
Loan to
Federal
Ministry of
Power 8/30/13 0.5%
Statutory
Stabilization
Fund
Account 1,000,000,000
Loan to
Nigerian
Army as
Operation
Internal
Security 8/30/13 0.5%
Statutory
Stabilization
Fund
Account 2,368,134,360
Loan to
Federal
Ministry of
Power 2013 0.5%
Statutory
Stabilization
Fund
Account 8,270,000,000
Loan for
Subscription
of Islam
Development
Bank 2013 0.5%
Statutory
Stabilization
Fund
Account 9,189,840,000
Loan to
Ministry of
Defence
Headquarters 2013 0.5%
Statutory
Stabilization
Fund
Account 10,847,558,177
Loan to Fund
Military
Pension
Scheme 2013 0.5%
Statutory
Stabilization
Fund
Account 7,306,516,345
Loan to FMF
for
Verification
of Solid
Minerals 2013 0.5%
Statutory
Stabilization
Fund
Account 336,077,079
Loan to
Defence
Headquarters 2013 0.5%
Statutory
Stabilization
Fund
Account 8,479,423,817
Loan to
Nigerian
Army Quick
Response
Group and
forward
operating
Bases
12/19/13 0.5%
Statutory
Stabilization
Fund
Account 2,368,134,360
Loan to Chief
of Naval
Staff Coast
Guard 12/19/13 0.5%
Statutory
Stabilization
Fund
Account 2,555,978,376
Loan to
Office of the
National
Chief
Security
Adviser 12/20/13 0.5%
Statutory
Stabilization
Fund
Account 5,500,000,000
Loan to
INEC to
speed up its
readiness for
2015 12/31/13 0.5%
Statutory
Stabilization
Fund
Account 3,000,000,000
Loan to
Nigeria
MORTGAGE
Refinance
Company
Plc. 10/2/14 0.5%
Statutory
Stabilization
Fund
Account 350,000,000
Release to
Standard
Alliance
Assurance
Ltd amount
approved by
HMF being
2013 Armed
Forces Group
Life
Assurance
Premium 19/05/14 0.5%
Statutory
Stabilization
Fund
Account 2,395,851,978
Release to
Health
Intervention
workplan/
budget on
Ebola Virus
Disease
8/8/14 0.5%
Statutory
Stabilization
Fund
Account 1,992,548,500
Loan to
Nigerian Air
Force
Operation to
meet
financial
requirements
for execution
of Air
Operation
12/9/14 0.5%
Statutory
Stabilization
Fund
Account 2,409,367,700
Loan to
Department
of Petroleum
Resources as
4% Cost of
Collection for
month of
September,
2014
29/10/14 0.5%
Statutory
Stabilization
Fund
Account 2,351,590,959.12
Loan to
Nigerian
Army for
Training and
Kitting of
5,000
Recruits
5/11/14 0.5%
Statutory
Stabilization
Fund
Account 2,598,000,000
Loan to
Nigerian
Army for
outstanding
balance of
2013
recruitment
5/12/14 0.5%
Statutory
Stabilization
Fund
Account 1,558,500,000
TOTAL 247,020,361,789.3
Tome is on the world map, given that the
twin island country is of little, if any,
strategic importance to Nigeria.
That however did not stop former President
Olusegun Obasanjo, in 2004, from doling out
$5 million as loan to that nation. Mr.
Obasanjo also paid out $40 million as loan to
Ghana same year.
Such were the frivolity and impulsiveness
that characterized government spending since
the return to democracy in 1999.
Between 2004 and 2014, a catalogue of fuzzy
loans was indiscriminately granted in off-
budget spending to government agencies in
what appeared an attack on the nation’s oil
savings.
Extra-budgetary sums were dispensed in the
name of loans to the foreign countries, the
Independent National Electoral Commission
(INEC), Inspector General of Police (IGP),
the National Security Adviser (NSA), the
Ministry of Defence and other agencies.
Minutes of the December 2014 meeting of
the Federation Account Allocation
Committee (FAAC) Post-Mortem
Subcommittee obtained by PREMIUM
TIMES show that these funds were
discretionary, off-budget loans paid out of the
Reserve Accounts especially the 0.5%
Statutory Stabilization Fund.
According to the report, the loans granted by
Mr. Obasanjo to Ghana and Sao Tome came
from the Statutory Stabilization Fund
Account.
Over N18 billion was also taken from the
reserve account as loan to the Federal
Government for its Pioneer Consumer Car
Scheme for public servants in paramilitary
agencies.
In August 2006, the then President Obasanjo
granted N4.58 billion as the first loan while
the second and third tranches of N2.8 billion
and N10.76 billion were granted in May and
December 2007 respectively under the
President Umaru Yar’Adua administration.
From the Statutory Stabilization Fund
Account, Mr. Obasanjo had pulled out N300
million for IGP to purchase vehicles. In June
of 2006 N242.6 million was paid out.
Between June and October, two other loans
were granted for the same purpose to purchase apparently
another set of vehicles.
The amounts were N33.9 million and N32.6 million
respectively. Separate loans of N4.57 billion and N1.6
billion, dated February 14 and April 3, 2007 were tagged
“Loan granted to Fund for 2006 Virement”.
Notwithstanding provisions already made in the budget,
INEC, on two occasions, was granted loans to fund the 2011
and 2015 general elections. In May 2007, over N66.7 billion
was given to INEC to fund the 2011 General Election. In
December 2013, N3 billion was withdrawn from the
Statutory Stabilization Fund Account and given as loan to
INEC to speed up its readiness for 2015.
Given that the Statutory Stabilization Fund is a special fund
that requires constitutional mandate for its appropriation, the
indiscriminate manner in which the loans were approved for
these agencies showed a serial disdain for due process.
In September 2010 and February 2011, about N80 billion
was taken from the Excess Revenue Domestic and Non-Oil
Excess Revenue Accounts as amount borrowed to pay
States’ London Club Debt Buy-back. The money was taken
in three installments. While the first N48.44 billion was
withdrawn from the Non-Oil Excess Revenue Account in
September 2010, two other withdrawals of N28.7 billion and
N2.83 billion were made from the Excess Revenue
Domestic Account respectively.
While some of the withdrawals might be explained as
prudent in terms of meeting exigencies associated with
economic crisis, the manner they were done were
underscored as weak resource governance and mere
financial gaieties.
On the part of former President Jonathan, series of loans
approved by him were to defence and security. They had the
most impact in depleting the nation’s oil reserve. For
instance; a loan of N5.5 billion was given to the Office of
National Security Adviser in December 2013, for an
undisclosed purpose. In the same manner, a loan of N2.56
billion was given to Chief of Naval Staff Coast Guard in
December 2013 for equally undisclosed purpose.
In what could be said to be an emerging pattern, a loan of
N2.56 billion was given to Chief of Naval Staff Coast Guard
in 2013. Again the purpose was not declared. Two
outstanding loans to the Nigerian Army for training and
kitting of recruits were approved at a cost of N2.6 billion
and N1.56 billion respectively.
Other loans given to the military in 2013 included a N7.3
billion loan to fund Military Pension Scheme, N8.48 billion
loan to Fund Military Pension Scheme, N2.36 billion loan to
the Army as Operation Internal Security and N10.8 billion
loan to Ministry of Defence Headquarters.
In 2014, over N2.4 billion was also withdrawn as loan to
Nigerian Air Force Operation to meet financial requirements
under what was tagged as ‘Air Operation’. Another N2.36
billion was granted as Loan to Nigerian Army Quick
Response Group and forward operating Bases.
The establishment of the Excess Crude Account (ECA) in
2004 and the Sovereign Wealth Fund (SWF) in 2011 was
essentially to save for the rainy day. These accounts were
respectively populated with the excess dollar revenue that
came in periods when oil prices became higher than budget
benchmarks.
These excess funds would have come in handy for Nigeria
as the world is hit by falling oil prices. At various times
state governors insisted that these accounts be emptied and
shared among the federating states.
Other loans granted between 2013 and 2014 included a
N9.19 billion loan for subscription to Islamic Development
Bank shares; N2.35 billion loan to the Department of
Petroleum Resources as 4% Cost of Collection for month of
September, 2014; N8.27 billion loan to the Federal Ministry
of Power, another loan of N1 billion to the same Ministry of
Power; N3.36 million to the Federal Ministry of Finance for
verification of solid minerals and N350 million loan to
Nigeria Mortgage Refinance Company Plc.
Yet, other loans were N1.99 billion purportedly released to
Health Intervention Workplan/Budget on Ebola Virus
Disease; N2.39 billion to Standard Alliance Assurance Ltd
being 2013 Armed Forces Group Life Assurance Premium.
All the loans, which remained outstanding by October 31,
2015, violated Nigeria’s fiscal responsibility law and this
has made the FAAC Post-mortem committee to recommend
that the Office of Accountant General of the Federation
(OAGF) examine the loans and grants to ascertain those that
need to be written off.
Details of the loans to NSA, MoD and other security
agencies are shown in the table below.
Description
of Loans to
Security
Agencies Date Account
from which
the amount
was
borrowed Amount
outstanding as at
31-10-2015 (N)
Loan granted
to Ghana
($40 million)
and Sao
Tome ($5
million) 9/22/04 0.5%
Statutory
Stabilization
Fund
Account 827,578,112.70
Loan granted
to IGP for
purchase of
vehicle 6/22/06 0.5%
Statutory
Stabilization
Fund
Account 242,645,472.70
Loan granted
to FGN for
Pioneer
Consumer
Car scheme 8/7/06 0.5%
Statutory
Stabilization
Fund
Account 4,580,507,118.53
Loan granted
to IGP for
purchase of
vehicle 0.5%
Statutory
Stabilization
Fund
Account 33,936,500
Loan granted
to IGP for
purchase of
vehicle 10/5/2006 0.5%
Statutory
Stabilization
Fund
Account 32,626,027.60
Loan granted
to FGN for
Pioneer
Consumer
Car scheme 12/8/07 0.5%
Statutory
Stabilization
Fund
Account 10,757,175,000
Loan granted
to Fund 2006
Virement 2/14/07 0.5%
Statutory
Stabilization
Fund
Account 4,573,773,678
Loan granted
to Fund 2006
Virement 4/3/07 0.5%
Statutory
Stabilization
Fund
Account 1,600,338,003
Loan granted
to FGN for
Pioneer
Consumer
Car scheme
for Public
Servants in
the
Paramilitary
Agencies
5/9/07 0.5%
Statutory
Stabilization
Fund
Account 2,800,000,000
Loan to FGN
CRF for
funding
INEC 2011
General
Election 5/22/07 0.5%
Statutory
Stabilization
Fund
Account 66,721,961,807.18
Amount
borrowed to
pay States’
London Club
Debt Buy-
back September,
2010 Non Oil
Excess
Revenue
Account 48,438,019,698.18
Amount
borrowed to
pay States’
London Club
Debt Buy-
back February,
2011 Excess
Domestic
Account 28,700,000,000
Amount
borrowed to
pay States’
London Club
Debt Buy-
back February,
2011 Excess
Domestic
Account 2,834,278,720.30
Loan to
Federal
Ministry of
Power 8/30/13 0.5%
Statutory
Stabilization
Fund
Account 1,000,000,000
Loan to
Nigerian
Army as
Operation
Internal
Security 8/30/13 0.5%
Statutory
Stabilization
Fund
Account 2,368,134,360
Loan to
Federal
Ministry of
Power 2013 0.5%
Statutory
Stabilization
Fund
Account 8,270,000,000
Loan for
Subscription
of Islam
Development
Bank 2013 0.5%
Statutory
Stabilization
Fund
Account 9,189,840,000
Loan to
Ministry of
Defence
Headquarters 2013 0.5%
Statutory
Stabilization
Fund
Account 10,847,558,177
Loan to Fund
Military
Pension
Scheme 2013 0.5%
Statutory
Stabilization
Fund
Account 7,306,516,345
Loan to FMF
for
Verification
of Solid
Minerals 2013 0.5%
Statutory
Stabilization
Fund
Account 336,077,079
Loan to
Defence
Headquarters 2013 0.5%
Statutory
Stabilization
Fund
Account 8,479,423,817
Loan to
Nigerian
Army Quick
Response
Group and
forward
operating
Bases
12/19/13 0.5%
Statutory
Stabilization
Fund
Account 2,368,134,360
Loan to Chief
of Naval
Staff Coast
Guard 12/19/13 0.5%
Statutory
Stabilization
Fund
Account 2,555,978,376
Loan to
Office of the
National
Chief
Security
Adviser 12/20/13 0.5%
Statutory
Stabilization
Fund
Account 5,500,000,000
Loan to
INEC to
speed up its
readiness for
2015 12/31/13 0.5%
Statutory
Stabilization
Fund
Account 3,000,000,000
Loan to
Nigeria
MORTGAGE
Refinance
Company
Plc. 10/2/14 0.5%
Statutory
Stabilization
Fund
Account 350,000,000
Release to
Standard
Alliance
Assurance
Ltd amount
approved by
HMF being
2013 Armed
Forces Group
Life
Assurance
Premium 19/05/14 0.5%
Statutory
Stabilization
Fund
Account 2,395,851,978
Release to
Health
Intervention
workplan/
budget on
Ebola Virus
Disease
8/8/14 0.5%
Statutory
Stabilization
Fund
Account 1,992,548,500
Loan to
Nigerian Air
Force
Operation to
meet
financial
requirements
for execution
of Air
Operation
12/9/14 0.5%
Statutory
Stabilization
Fund
Account 2,409,367,700
Loan to
Department
of Petroleum
Resources as
4% Cost of
Collection for
month of
September,
2014
29/10/14 0.5%
Statutory
Stabilization
Fund
Account 2,351,590,959.12
Loan to
Nigerian
Army for
Training and
Kitting of
5,000
Recruits
5/11/14 0.5%
Statutory
Stabilization
Fund
Account 2,598,000,000
Loan to
Nigerian
Army for
outstanding
balance of
2013
recruitment
5/12/14 0.5%
Statutory
Stabilization
Fund
Account 1,558,500,000
TOTAL 247,020,361,789.3
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