Senate launches probes into N500bn loan to six geo-political zones

The Senate established an ad hoc committee on Wednesday to investigate the alleged uneven distribution of a half-trillion-naira loan by the Development Bank of Nigeria to the six geopolitical zones.

Sen. Ali Ndume (APC Borno South) and Sen. Ibrahim Bomai (APC Yobe South) sponsored the motion that led to the Red Chamber’s resolutions and the ensuing investigation

In response, the Senate formed a seven-person committee with a two-week deadline to investigate how the fund was distributed among the six geopolitical zones.

Senators Ibrahim Danbaba (APC Sokoto South), Ayo Akinyelure (PDP Ondo Central), Mathew Urhoghide (PDP Edo South), Ali Ndume (APC Borno South), Lilian Ekwunife (PDP Anambra Central), and Sadiq Umar (APC Kwara North) will serve on the committee, which will be led by Senator Sani Musa (APC Niger East).

Senator Ndume in his submissions during plenary said, “The bank’s Annual Integrated Statutory Report 2021 obtained on 13th July 2022 from the organisation’s website; the bank was able to disburse a loan worth N483,000,000 only out of which only 11% went to the 19 states of Northern Nigeria while 47% went to Lagos State alone.

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“The 11% of the loan that went to the North totals about N53,130,000,000 and the 47% that went to Lagos State alone totals N227,010,000,000 only.”

The lawmaker also noted that “the loans were given to the six geo-political zones, where the data showed that the South West accessed the lion’s share with 57% of the total loan, estimated to be around N273,740,000,000 only.

“The South-South accessed 17% which is roughly N81,940,000,000; the Federal Capital Territory, and the North Central accessed 11% ,which was N53,020,000,000; South East accessed a paltry 9%, which was roughly N43,380,000,000; the North West, which has 5% accessed N24,100,000,000, while the North East accessed only 1%, the least share of the total loan at roughly N43,820,000,000 only.”

He claimed that the DBN’s purpose was to help Nigerian MSMEs overcome their financial constraints by offering funding, partial credit guarantees, and technical support to qualified financial intermediaries in a way that is both market-compliant and completely financially sustainable.

However, he pointed out that the lack of knowledge about the loan or even the DBN, Muslim religious restrictions on taking interest-bearing loans, and a lack of company formalization may have prevented the payout.

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