Bailout Funds: The Controversies, Oversights And…

The House of Representatives recently declared its intent to investigate bailouts funds given to some states by the federal government following allegations of diversion and mismanagement by some states governors. In the face of new bailout demands from states, EMAMEH GABRIEL takes a look at unfolding events as it seems some states may not be bailed out after all.

Lately, the House of Representatives took state governors by surprise when it swung into investigating the bailout funds states have applied for and earmarked by the federal government for states to set off their wage bills.

The decision by the House of Representatives was believed to have been informed by allegations of diversion of bailout funds by some states governors and the development has stalled the disbursement of N90bn already set aside by the federal government for each state.

The House, it was learnt took the decision to investigate the terms and conditions for disbursement and the purposes of the bailout funds. This would, according to Abdulrazak Namdas, House chairman on Media and Public Affairs who spoke with our reporter on Weekend, be carried out by an ad hoc committee already set up by the House.

The committee, he said, will not only investigate how the funds are to be utilized to ensure that they are not diverted or mismanaged but also to ensure that states governors found wanting will be prevented from getting the bailout funds.

The Federal Government had in May this year announced its intentions to disburse more funds to insolvent states to relief them of the burden of salary backlogs hanging on their necks due to the current financial crises in the country. Most states in the country have since 2015 have not been able to pay salaries.

Nonetheless, eyebrows were raised in some quarters as to how the previous funds released to states were utilized. Some of the state governors who benefitted from the previous bail were said to have allegedly diverted the funds for other purposes.

The Federal Government had in 2015 set aside N366bn to rescue states that were then facing difficulties to pay salaries as a result of dipping oil price. The Vice-President, Prof. Yomi Osibanjo, who chaired the National Economic Council before the funds were approved, had warned that the funds released were ‘‘sorely for the purpose of paying the backlog of salaries’’ owned to workers, citing the conditions for repayment which has a span of 20-year with 9 per cent interest rate over this period.

Regrettably, from reports and complains from workers in various states, some of the states failed to comply with this directives.

Before the end of 2015, there were already allegations that some states governments had diverted these monies into other use or unspecified projects as against what they were meant for. Following this development, the Independent Corrupt Practice and other related Crimes Commission (ICPC) which had from day one monitored how the 27 states involved spent the N366bn bailout funds, released a report in April this year showing how some states diverted funds released to them by the federal government for other purposes.

Some of the state governors were alleged to have lodged these funds in various accounts to attract interests.

The two states among others mainly indicted by the Independent Corrupt Practice Commission in the report were Benue and Imo State. This was coming few weeks after the EFCC arrested the Principal Secretary of the Governor of Imo state, Dr. Pascal Obi and two others (Uzoho Casmir and Iheoma Kenneth) who were described by the EFCC as the director of finance and treasurer respectively.

From the report, “Imo State applied for and received bailout funds of N26, 806, 430, 000.00 from the Central Bank of Nigeria which were domiciled with two commercial banks namely Fidelity and Zenith banks. In the course of analysis, it was discovered that some transfers were made into certain Imo State Government accounts which are not related to salaries and emoluments are as follows: N2bn paid into a Government Account; N2bn into an Imo State Project account; N2bn transferred into microfinance bank; and a management fee of N21, 017, 810.00 was paid into an unspecified account”, said the report. According to the report, Benue State received over N12bn that was meant for the payment of salaries but mysteriously paid over N70m into the account of the Office of the Deputy Governor.

The report from the anti-graft agency also had that, “In Benue State, the total debt accrued from staff salaries and emoluments amounted to N12, 503, 439, 787. 48. The state received N12, 503, 439, 787. 48 as bailout fund and disbursed N10, 852, 536, 702.96 with a balance of N1, 650, 903, 084. 52. Analysis of the documents submitted revealed a double payment of N37, 760, 000.00 in favour of the Office of the Deputy Governor. This double payment is presently being investigated.”

However, like other state governors who had earlier denied the allegations, the Imo State Governor, Rochas Okorocha, in a meeting with some stakeholders recently said the state only owes two months outstanding salaries (June and July 2016), that has not been paid. But a source from Imo State who spoke with Leadership said the governor was not being sincere. He alleged that ‘‘for the past one year, the salaries of Imo State workers have been tactically deducted by 30 per cent. Workers have been receiving 70 per cent of their salaries for a year or more now. Some ministries have not paid their workers 6-7 months outstanding entitlements.

It is against this backdrop that the House of Representatives recently on hearing that the federal government was set again to give out bailout funds to more states moved to investigate, and requested that state governors account for bailouts already collected.

A lawmaker from Kogi State, one of the affected states, Sunday Karimi, (PDP) raised a motion under Matters of Urgent National importance, which was unanimously adopted by members of the House Representatives.

Mr. Kamiri had in moving the motion requested that there was the need to investigate the disbursement and utilization of funds to be released to ensure that such funds are not diverted as it was alleged by the public and anti-graft agency to avoid what allegedly transpired in the past.

According to him: ‘‘States like Abia, Osun, Bayelsa, Benue, Ekiti, Kwara, Plateau, Oyo, Niger, Ogun, Nasarawa, Kogi, among others, are still owing workers’ salaries for several months.

Corroborating this, House chairman on Media and Public Affairs, Namdas in an interview with Leadership said the House has nothing against the bailout funds because the purpose was meant to save the Nigerian workers from starvation but wanted to ensure that the process of releasing such funds followed due process.

‘‘We know that the bailout was done in the good faith, the idea is that we needed to be part of the bailout to know how it would be given, under what conditions. So, haven heard from electorates, people who we were called to represent that money that was given to them, up till now some states have not been able to pay salaries’’.

‘‘Whether these monies were judiciously used, we don’t know because we have started hearing stories that they are still coming back for another bailout. We have to look at what they did with the money first, let people know that they are the ones that caused of the problem of non-payment or not. But when we see that you are up-to-date, then you will get the bailout’’, he said.

Also the Plateau Government which was one of the states accused of diverting same funds for the state had recently debunked the allegations, saying the state recently paid eight months’ salary arrears totaling N9. 8 billion it inherited from the last administration.

According to Commissioner for Information and Communication, Mallam Muhammad Nazif, “With the bailout of N5.3 billion and N5.2 billion, payment of the whole salary arrears and part of pension arrears was effected. Out of the bailout, local governments were also given N2.5 billion to settle all outstanding salaries of their staff. As at today, all salaries from June 2015 to May 2016 amounting to N19.5 billion have been paid while June salary is being transmitted,” he said.

In the same vain, the Ogun State Governor, Senator Ibikunle Amosun, had said it was unjustifiable to accuse state governors of mismanagement of the bailout funds released to their respective states by the Federal Government early this year.

While the situation in Kogi State is not different from other states, the Nigerian Labour Congress (NLC) recently threatened the Kogi State government with an impending industrial crisis if the state failed to clear the backlog of salaries own to its workers. The NLC had also through its national president, Ayuba Wabba called on President Muhammadu Buhari and the National Assembly to probe the state governors over bailout funds granted to states of the federation.

“Some situations are very terrible but that of Kogi State is pathetic, since bailout is a loan that states will have to pay back, so there is the need for the Federal Government to set up a high powered committee to probe the application of the fund’’, said Wabba.

What’s more, political pundits had questioned the length of time the monies were left in the banks, a situation which fueled insinuations in some quarters that the monies were left long in the bank to attract interests for the governors.

Governors alleged to have diverted or mismanaged their bailout funds had denied the allegations made against them by the ICPC and other groups. Unfortunately, no state House of Assembly among the states fingered out have mustered the political will to investigate these allegations or invite their governors, as part of their oversight function, to come forward to give account of how the funds were being used, though with the exception of the Zamfara State House of Assembly which not until recently launched an impeachment attempt against the state governor, Abdulaziz Yari.

The move, according to sources was believed to be connected to an alleged mismanagement of the state’s share of the federal government’s bailout funds to the state and other impeachable offences. However in what many had thought would be proof to these allegations across states after the plan hatched to remove Yari was perfected, the governor came from behind to call for the arrest of the Speaker of the State House of Assembly, Hon. Sanusi Garba Rikiji, and other principal officers, by security operatives in Abuja. Governor Yari, it was alleged used the DSS as a diversionary attempt not only to scuttle justice but also to intimidate lawmakers of the state in order to prevent them from carrying out their oversight functions.

But speaking on behalf of other lawmakers, the acting chairman, House Committee on Information, Hon. Dayyabu Rijiya, who denied the impeachment plot allegation, said the anger is that the governor has continued to pay a deaf ear to the plights of workers in the state and that they could no longer fold their hands and watch things go worse.

“We are not comfortable with that as the bailout was diverted to programmes other than what it was actually meant for. There is also the issue of lingering failure to pay local government workers for many months, which has resulted in untold hardship for the families of those affected. These are the issues we felt obliged to meet and draw recommendations, for the executive arm to study their economic and social implications and act accordingly,” he said.

Although the impeachment plot has been extinguished, the ruckus in Zamfara, hints at that potential of state assemblies to put state governors on their toes.

The decision to investigate the disbursement and utilization of bailout funds by the House of Representatives should not have come in the first place if state assemblies had provided robust oversight on the utilization of the funds.

Those in this school of thought aver that state assemblies in Nigeria have since become the weeping child of state governors. The elected officials have been rendered almost useless as they are at the beck and call of state governors. While the incident of oppression is not ruled out, it is also believed that most states assemblies are sitting stooges of the governors.

However, in the wake of the arrest of the Zamfara assembly speaker and other principal officers by an order from the state governor, the conference of speakers of state legislatures of Nigeria had warned state executives to stop the habit of poking and meddling into legislative duties aimed at suppressing and stifling the smooth functions of government in the states.

The group made this known in a statement through its Administrative Secretary, Busari Sarafadeen, alleging that such moves are setting negative democratic precedent alien to the ethos of modern democracy.

”We like to point out that the system of government whose legislative arm is stifled, suppressed or at the mercy of the executive is to say the least undemocratic and despotic. In such an environment, the people do not have a say and their feelings, needs and aspiration would not be considered.”

Still, besides Zamfara state, the deafening silence of state assemblies over the allegation of diversion of bailout funds by state governors remains worrisome.

In other climes, such allegations would have attracted the concern and intervention of the House of Assembly which is supposed to be representative of the interest of the people since the bailout funds were meant for the payment of salaries of workers.

While the National Assembly in the last few years, has struggled to achieve some institutional stability and shed somewhat the rubber stamp posture from the executive, their counterparts in the state still wallow in the shadow of state governors.

The assertion that states assemblies are mere tools in the hands of the executive portrays a skewed democratic experience in the state.

The expectation, as the demand for transparency in the utilization of bailout funds continue is the lawmakers should be ready to do things differently in not only providing people-oriented legislation but much more checking the excesses or inadequacies of state governors.

Source:leadership.ng/