NDDC’s N3trn expenditure in 19 years

Years after it birthed, the Niger Delta Development Commission (NDDC) is still learning to crawl with virtually all its activities, including expenditure enmeshed in controversies, write Taiwo AMODU, Osaretin Osadebamwen and Kehinde Akintola.

 

IT is mixed feelings across board, 19 years after the Niger Delta Development Commission (NDDC) was established. Founded in 2001 during the Obasanjo administration, the commission was designed to relieve the people of the oil-producing states from the abysmal neglect over years. Era of impunity by successive administrations had created not just environmental degradation but also deprived the people of the benefits accruing from the mainstay of the national economy, crude oil. Therefore, the NDDC, as an interventionist agency was fashioned to address core issues that had culminated in militancy and other casts of criminality in the oil-producing areas. In summary, the NDDC was created to help identify factors inhibiting the development of oil-producing states; to conceive, plan and implement, in accordance with set rules and regulations, projects and programmes for the sustainable development of the area in the field of employment, industrialisation, agriculture and fisheries. And for that purpose, the Federal Government is believed to have channelled a conservative estimate of N3 trillion, though some sources put the figure at N15 trillion. The NDDC claims to be owing contractors a whopping N2 trillion.

While some said the NDDC received about N1.534 trillion since its inception in 2001 for expenditure on developmental projects, evidence that the figure was a guess estimate was underpinned by the disclosure by a former Acting Managing Director of the commission (NDDC), Nelson Brambaifa, in January 2019 that the Federal Government would begin the refund of N1.3 trillion owed to the commission. His words: “The new management team in response to the growing unhappiness in the region over government’s commitment to developing the region and improving the living conditions of the people. The Federal Government has indeed begun refunding over N1.3 trillion owed the commission since inception.”

Sadly, the commission, today, is mired in controversy and issues bordering on impropriety to the chagrin of government and critical stakeholders in the region. The litany of woes includes allegations of abandoned projects, duplication of projects, contractors absconding after collecting billions of Naira as contract sum, diversion of funds, unbridled power tussle,  nepotism, among other untoward tendencies. While the incidence of militancy and oil theft seems to have abated due to some other extra measures by the Federal government, especially the implementation of the Presidential Amnesty Programmes for repentant militants, crass impunity and abuse of office appear to have gained ascendancy in the management of the commission. The allegations necessitated the directive by President Muhammadu Buhari for a comprehensive forensic audit of the account and operations of the NDDC. Both arms of the National Assembly: the Senate and the House of Representatives are beaming a searchlight on the commission. The investigations have continued to open a can of worms with the character engaging in claims and counter-claims over allegations of abuse of office and other forms of malfeasance. It is believed that the NDDC has received at least N1.534 trillion since its inception in 2001 to enable it reverse the huge infrastructural deficit in the nine Niger Delta states as a result of decades of government’s neglect and environmental degradation by oil exploration companies. But the general feeling is that there is a yawning gap in the expenditure vis-à-vis what is on ground till date. According to two reports credited to the Nigeria Extractive Industries Transparency Initiative (NEITI) that covered 10 years, the NDDC received a total of N1.413 trillion. The Fiscal Allocation and Statutory Disbursement (FASD) documents showed the breakdown as follows: N593.96 billion from mineral and non-mineral sources between 2007 and 2011; N819.81 billion between 2012 and 2016; totaling N1.413 trillion. Surprisingly, the NDDC is said to have pending payment Certificates worth more than N3 trillions. Coupled with this is the allegation that there are issues over a sum of N7.442 billion.

 

Contract controversy versus  audit queries

The lingering financial scandal trailing the activities of the commission has become a tale of the more you look, the less you see, with emerging documentary evidences from the office of the Auditor General of the Federation (oAuGF) that the agency has consistently failed to deliver on its mandate. The oAuGF audit reports exposed alleged breach of trust by the officials of the NDDC, including top management cadre. Mr. President initiated the forensic audit of the commission spanning 2001 to 2019 in relations to about N1 trillion alleged fraudulent contracts implemented by the Commission within the period under review. The presidential directive was against the backdrop of the urge by the nine governors of the oil-producing states namely: Delta, Akwa Ibom, Rivers, Ondo, Imo, Bayelsa, Cross River, Abia and Edo, in October 2019, for him to order an audit of the the books of the NDDC. A fall-out of the inquiry was the President’s announcement of the seizure of assets worth N6 billion allegedly owned by some contractors and former NDDC directors, aside other N3.7 billion assets earlier recovered by law enforcement agencies over the years.

An audit report by the office of the Accountant General of the Federation (AGF), at least 1,723 contractors who collected a sum of N70.496 billion between 2000 and 2019 failed to mobilise to sites; 90 percent of the contracts were awarded between 2011 and 2012, with some contractors having between three to four jobs, collected mobilisation payments without reporting to site.

On state-by-state basis, the AGF report stated that out of the N61.468 billion abandoned contracts located in the nine oil-producing states, projects worth N2.027 billion mobilisation fee was paid for 32 projects in Abia State out of N17.641 billion contract; in Akwa Ibom State; N4.229 billion was paid as mobilisation fee out of N31.681 billion contract for 64 projects; in Bayelsa State, N4.970 billion was paid as mobilisation fee out of N27.647 billion contracts for 80 projects. In Cross River state, the sum of N2.065 billion mobilisation fee was paid out of N13.451 billion for 29 projects; in Delta State; N7.836 billion as mobilisation fee out of N31.765 billion for 99 projects. In Edo State, N2.065 billion was paid as mobilisation  fee out of N13.927 billion for 51 projects; in Imo State, the sum of N1.859 billion as mobilisation fee out N13.184 billion for 33 projects; in Ondo State, the sum of N6.173 billion was paid as mobilisation fee out of N29.977 billion for 50 projects; in Rivers State, the sum of N13.146 billion mobilisation fee was paid out of N56.717 billion for 106 projects, respectively. Worried by the development, the AGF specifically described the sum of N61, 468,160,743.03 collected by 626 contractors as “lost to this fraudulent practices.”

Financial records obtained from the Office of the Accountant General of the Federation (oAGF) showed that a total sum of N738.026 billion has so far been released to the NDDC over the past 19 years for projects in all the oil-producing states.  According to another report, the Federal Government and oil companies, as at 2018, owed the commission, a whooping sum of N2.787 trillion and $485.336 million.  However, the actual amount of money paid through development partners and other multinational companies directly to the commission cannot be ascertained by all the parties. including the office of the Accountant General and Auditor General of the Federation for the period under review.

On a yearly basis, the commission gets budgetary allocation from the First Line Charge of at least N45 billion, and additional budgetary allocation worth over N300 billion annually. For example, the National Assembly approved the sum of N346.388 billion for the 2019 fiscal year. Out of the amount, a sum of N22.338 billion was for personnel expenditure N13.466 billion only, is for overhead expenditure of N4.083 billion was for internal capital expenditure. Also, the sum of N306.500 billion was for development Projects for the Service of the NDDC. As at December 2018, the aggregate revenue inflow recorded by the commission was N291.47 billion.

All these issues have been engaging the attention of members of the House of Representatives in their bid to unravel the curious situation in the NDDC. For instance, a motion raised on the floor of the House on the matter read: “As at June 2019, outstanding remittances of oil companies and gas processing companies stand at N1.2 trillion. The Federal Government, on its part, has an outstanding of over N1.5 trillion; Ecological Fund Office has never remitted any money and the commission has accumulated debts to the tune of over a N1trillion.”

One of the NDDC acting managing directors, who gave the status report of all the commission’s activities as at 2018, allegedly accused some erring contractors of issuing threat notices against top officials of the commission when queried for failing to deliver on their contracts. These are the same companies that the Auditor General observed were being recycled by the NDDC, who absconded with a whopping sum of N70.495 billion allegedly paid to 1,773 contractors as mobilisation fees but did not report to site between 2008 and 2012. According to the former managing director, from a total of 9,820 contracts  awarded from inception of the NDDC to date, only 4,288 were completed; 1,796 not yet started; 2,645 are ongoing; 342 projects stalled; 30 taken over by state governments; 449 cancelled and terminated, while 660 projects are newly awarded.

The funding profile showed that a total sum of N2.832 trillion was budgeted from 2008 and 2018, but that N1.848 trillion is the actual receipts, N983 billion outstanding funding variance, N1.374 trillion outstanding gap based on amounts payable according to NDDC Act, while N60.213 billion was the unremitted funds due to the commission through the Ecological Fund.

However, barely 20 months after, the incumbent acting Managing Director, Prof. Pondei Kemerbrandikumo, who spoke through the acting Director of Internal Audit, Mr. Itu Eno Ubi while responding to a series of 219 audit queries on the N70.495 billion issued by the oAuGF, argued that only the sum of N19 billion Advance Bank Guarantee (ABG) was yet to be recovered from the contractors..

Meanwhile, the House is also expected to conduct its investigation into the N40 billion allegedly spent on “emergency projects and completion of the commission’s headquarters building, without due regard to fiscal governance as encapsulated in the Fiscal Responsibility Act, 2007 and other extant Financial Regulations.” According to the motion, the contracts were awarded in the wake of Covid-19, and included a contract for the supply of Hilux vehicles/ medical consumables to the tune of N4.8 billion said to be in clear breach of Sections 19, 25, 41 and 42 of the Public Procurement Act, 2007.

Similarly, the House is looking into the N6.5 billion contract awarded by commission for the construction of shoreline protection aimed at curbing floods arising from the Atlantic Ocean Surge, in Ilaje Local Government Area, Ondo State. According to the details available by the sponsor of the motion, the NDDC awarded the said contract for building shoreline protection for N2.4 billion and a mobilisation fee of N650 million was paid with a completion period of 18 months but with claims that no job was done.

It was also observed that following the termination of the contract after four years on the grounds of non-performance, the NDDC re-awarded it to another company at a cost of N6.5 billion with payment of mobilisation fee of N2.5 billion which is about 40 per cent of the total contract sum. However, the allegation is that no work was done despite the financial commitment of the Federal Government to the shoreline protection for the community, almost two decades after the initial award.

While ruling on the N70.498 billion mobilisation fee paid to the contractors, Chairman of the Committee on Public Accounts, Honourable Oluwole Oke affirmed that the ex-commissioners and executive directors of the NDDC  flouted the provisions of the Appropriation Act 2011 and the 1999 Constitution (as amended) by approving over alleged inflated contracts and making over payments to the contractors. He therefore ruled that the House and indeed National Assembly, “won’t allow such behaviour to go unpunished. Some people have intentionally raped and violated the provisions of the Appropriation Act and the 1999 Constitution.

“An infraction has occurred and your predecessor, we are aware of the heavy rainfall in your area but that does not go to the fact that you should spend beyond what the law says; the budget is the law. That does not give you the power to spend beyond what the law says you should spend. The summary of my position is that we won’t allow such behaviour to go unsanctioned. We appreciate your being truthful; we appreciate your determination for wanting to uphold the content delivered to the people in the heart of NDDC vis-a-vis the provision of the 1999 Constitution.

“But with the fact that some people have willingly and intentionally violated, raped the provisions of the 1999 Constitution, such thing will not go unsanctioned. It is what other people will just say okay, it is the norm and that if I come to the Parliament, they will pat me at the back. So, it’s on that note that we took cognisance of that and then, we uphold the prayers of the Auditor General. Hence, we must know these characters that committed this offence. And I also want to suggest that we give them an opportunity to state their own side of the story because fair hearing is a constitutional gift,” Honourable Oke noted.

 

Commonwealth, mandate and resource management

Recently, it was a bewildered nation that was treated to a lot theatrics as the actors in the management of the NDDC threw various darts at each other over allegations and counter-allegations on the management of the commission. At the centre of the issue relating to the expenditure of the NDDC were members of the Interim Management Committee (IMC) and the Expanded interim Management Committee (EIMC) of the NDDC. These comprised the extant Acting Managing Director, NDDC, Professor Pondei; Executive Director, Project, Dr Cairo Ojougboh and the immediate past Acting Managing Director of the commission, Joy Nunieh. They were among the key players who were required to offer explanations on the N81 billion allegedly spent within eight months. According to an analysis by the Central Bank of Nigeria (CBN), before the IMC led by Joy Nunieh was sacked in February, her team had allegedly spent N22.5 billion. The expanded committee, according to the CBN report, spent N59.1 billion between February and May 2020. Senator George Sekibo, from Rivers State blew the whistle at plenary of the Senate through a motion in which it was alleged that the Expanded Interim management committee of the NDDC under Pondei spent some N40bn and unjustifiably sacked some staffers of the commission. The Senate intervention on the matter was through its Standing Committee on Niger Delta Affairs and an ad-hoc committee each to investigate the allegations. As the Senate pursued the tracks of the alleged expenditure the NDDC said it was N81 billion based on a document it presented to the Senate.

The circumstances in which the monies were spent drew the attention of the lawmakers, as the figures released especially by the CBN was N92.2billion; Office of the Accountant General of the Federation and (OAGF) N82.4billion and the NNDC itself which said it spent N81.5billion. While the three organisations are yet to reconcile the figures, the Senate settled for the NDDC’s figure. When it was time to speak on the expenditure, it became a session of accusations and counter accusations. The arrow Head of the debate, Dr. Ojougboh said the commission had been focusing on its mandate of overseeing the NDDC while the forensic auditing was carried out.  Dr. Ojougboh said that the commission was indebted to the tune of N3trn on frivolous projects, when they came on board, just as he claimed that the NDDC was paying out N1 billion monthly to a consultancy firm against approval of the Federal Executive Council (FEC), which has such approval mandate following the N100m approval limit for the commission. Ojougboh said the management board of the commission inherited 12,384 projects out of which, he stated that, a total of “4,325 projects were said to have been completed” but that “50 per cent of the projects were dubious.”

Appearing before the Senate ad-hoc committee on the Niger Delta investigating the expenditure, the Minister of Niger Delta Commission and former Senate Minority leader, Godswill Akpabio said that he was oblivious of the spending as they complied in their wisdom to the limit of their approval. But he charged the National Assembly to pay attention to the budget of the commission by insisting on details of each item as against bloc allocations to items in the budget. He said that this would reduce the wicked manipulation of the budget by those whose activities had accrued debt to the tune of N30 million against the commission to a hotel in Abuja. While Akpabio exonerated himself of any involvement in all of the contentious issues on the card, the immediate past Acting Managing director of the NDDC, Nunieh blamed him for some pertinent issues in the running of the commission.

 

I will witch-hunt nobody —Senate President

In a veiled allusion to Senator Akpabio’s recent remarks, President of the Senate, Ahmad Lawan while inaugurating the Senator Adetumbi ad-hoc committee cautioned the team to be open-minded in the course of its investigation. Senator Lawan said the investigation was not a witch-hunt but to complement the IMC in its forensic audit and ensure that the Commission deliver on its mandate to the oil producing states.

“We are in total support of the President’s directive for the forensic audit of the finances of the NDDC, and this is, in some way, complimentary to that directive. We have no predetermined position on the outcome of this investigation as an institution. Issues raised are allegations, therefore the NDDC has the opportunity to come forward and defend its position. But we have a mindset and our mindset in the Senate is that we have to have a Niger Delta Development Commission that is effective and efficient in service delivery to the people of Niger Delta. This is the essence of setting up that Commission. So, we want to see a situation where the very limited resources that are appropriated for the Niger Delta Development Commission are prudently and transparently deployed for the development of the Niger Delta region. This is our mindset and we will not shy away from our responsibility at any time we feel a sense that that is not happening.”

The crisis of confidence rocking the NDDC, according to some stakeholders in the oil-producing states nay the country seems to be in phases. The current searchlight on the financial books of the commission is just one of them. So, the next phase is already loading.

 

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