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INVESTIGATION: N7.3bn paid for unnamed projects; how Nigerian govt spent N2.2trn in six months



INVESTIGATION: N7.3bn paid to unregistered companies; how Nigerian govt spent N2.2trn in six months

Analysing nearly 3,000 payments made by various Federal Government Ministries, Departments and Agencies (MDAs) over the previous six months (January 16 to June 20) has not only been exhausting but also mind-boggling.

It is even more distressing to know, as a Nigerian, that your government, which is in debt, has given over N7.3 billion to contractors, businesses with no records, and explanations for its action.

These payments, as disclosed on the Open Treasury website, are part of the N2.2 trillion total payments made to various contractors working on projects around the country from January to June 2021.

Infact, by the time Ripples Nigeria had finished examining around 20 percent of the payments, numerous questions had emerged, one of which was, what does the government actually mean when it says it is combating corruption?

The further we dug, the more perplexed we became.

This is because, when Ripples Nigeria investigated the businesses identified as having received money for nameless projects, several of them had no records with the Bureau of Public Procurement (BPP) or the Corporate Affairs Commission (CAC).

To be clear, BPP is the regulatory entity in charge of determining the operationality and functioning of any firm seeking a government contract. Contracts awarded to unverified, inactive, or unregistered firms violate Section 43 of the Public Procurement Act of 2007.

In addition, Section 113 (h) of the Procurement Act requires all accounting officers of MDAs to verify that their organizations complied with the terms of the Public Procurement Act.

The Corporate Affairs Commission (CAC), on the other hand, is the body in charge of establishing companies in Nigeria.

What is the open treasury portal for?

President Muhammadu Buhari inaugurated the open treasury portal (OTP) in December 2019 to assist civil society organizations and the general public in tracking transactions conducted by all federal government MDAs.

Accounting officers in MDAs are obliged to post daily reports on their expenditure in the area of N10 million, while other divisions, and agencies of government are expected to do the same for payments from the public purse over N5 million.

The MDAs responsible, the beneficiary, the purpose, and the amount of each payment must all be included in the information to be disclosed.

**Sample of the copy sent to MDAs.

Breakdown of payments tracked Jan-June

As earlier stated, in the first half of 2021, a total of N2.2trillion (N2,209,359,735,084.16) exchanged hands between government agencies, its personnel, and contractors.

In January, a total of N285.8 billion payments were made. Out of this amount, Ripples Nigeria observed that at least N371.1million (N375,178,866.26) payment was made without explanation.

In February, N347.5 billion in payments were made, with expenditure valued at N164 million having no clear purpose.

The largest daily payouts were made in March, totaling N615.2 billion. Out of this amount, federal government ministries and agencies spent N747.8 million without description on why.

In April, N411.4 billion in payments were recorded, with N4.9 billion going unaccounted for.

In May, N402.2 billion transactions were executed but N730.2 million was without description.

For the month of June, and as at the time of this report, the volume of total transactions was worth N146.9 billion, out of which N331.9million was without description on why the transactions were carried out.

MDAs payment without description

As earlier mentioned, a total of N7.7 billion worth of payments were made without clear explanation on the purpose.

Ripples Nigeria counted 55 MDAs to have committed these infractions.

As seen below the highest amount without description was made by State House, amounting to N4.83 billion.


Digging deeper

Using the Bureau of Public Procurement’s(BPP) website and Corporate Affairs Commission (CAC), Ripples Nigeria investigation also revealed that at least N722.3 million transactions, executed without description, were made to unregistered companies even when non-compliant firms are not qualified to bid or receive federal government contracts.

This, again, lends further credence to strong suspicions that some persons might have collected funds for fictitious projects. These awarded contracts contravene Section 43 of the Public Procurement Act 2007.

Atlascor Industries Limited, for example, received N29.3 million for an unidentified project it carried out for federal teaching hospital, Gombe.

Ripples Nigeria quick check on BPP website shows the firm is non-compliant and hence ineligible for a federal government contract.

To be a compliant firm, eligible for government contracts, the requirements include prompt payment of workers’ pensions, company registration, and remittance of federal taxes, among others.

Another firm, Dana Motors limited received N42.1 million for unnamed service it rendered to Council For The Regulation Of Engineering In Nigeria (COREN). The company is marked not-compliant.

Police Service Commission hqtrs also paid Chinesco Global Concepts limited N5.72 million, a company also not eligible to get government contract check from BPP shows

No Record Found/ Inactive Companies also received payments for unnamed jobs

Ripples Nigeria dug further and discovered more unsolved questions.

First, how could a business with no records or, in certain circumstances, inactive CAC licenses get a contract and be paid for unknown projects?

For example N75.1 million was paid to Meekahalok Nigeria Ltd by Federal Co-Operative College- Ibadan for unnamed project.

Read also: INVESTIGATION… Delay rocks Nigerian govt’s promise of N30,000 covid-19 relief for artisans, others

Checks by Ripples Nigeria show Meekahalok Nigeria Ltd has no records with CAC and BPP. A google search shows the company has been operating since 2012.

Others can be found below with status


Some items of attention

There were over 1000 payments executed, and it would be impossible to record them all, but two stood out.

The first is the N19.2 million monthly electricity bills for Aso Rock paid for January to April, amounting to N76m.

This is not to say it is inflated, as Ripples Nigeria cannot independently confirm, but it piques our interest.

Secondly, is the N7.93million spent on the construction of 1 No. Motorized Borehole, for Edzu And Takuti Communities In Lapai LGA, Niger State by Upper Benue River Basin Development Authority and contracted to Adexco Integrated Ventures.

Check by Ripples Nigeria show that not only is there no record for Adexco Integrated Ventures on BPP Website, the amount spent on similar project by the Anambra state community and social development project (CSDP) cost only N2.3million (N2,032,000.00).

What next?

In his reaction, Daniel Ikwong, Lagos State Lead, Follow the money & CODE, noted that these represent a huge setback for accountability, transparency and the fight against corruption.

“There can never be accountability where there is no transparency and ‘where there is no accountability, development will inevitably be stunted!
“It is common in Nigeria to find multiple bank accounts in commercial banks belonging to different MDAs, with idle cash sitting there for no reason at all. This has a lot of implications for not just our development generally in Nigeria but also on perception in the committee of nations, it is imperative to note however that the closest we can get to making MDAs see this policy as one that should be carried in its entirety and commitment.”

He called on the federal government to secure as soon as possible the appropriate legislative support to facilitate the relevant regulatory environment which will drive the effective implementation of the OTP, not just at the federal level but also the States and local governments in order to promote accountability and transparency at all levels of government.

Final note

After over a year of the introduction of OTP to promote fiscal transparency, and build public trust, the question is will President Buhari penalise erring MDAs in fulfillment of his commitment in May 2016 to fight corruption as his government gradually approaches the end?

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