Power probe: CBN keeps mum over $11bn intervention withdrawn from Excess Crude Account
• as Reps step down consideration of CBN’s report on N1.514trn electricity stabilization fund to NBET
The Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele on Thursday declined to provide insight into the withdrawal of the whooping sum of $11 billion withdrawn from the Excess Crude Account (ECA) between 2005 and 2007 for the implementation of failed National Integrated Power Project (NIPP).
The Accountant General of the Federation, Mr Idris Ahmed had during the investigative hearing held on 22nd July 2020 submitted relevant approvals of the former President, Olusegun Obasanjo and the Federal Executive Council (FEC) for the release of the $11 billion for the period under review.
Speaking at the ongoing investigative hearing into the power sector reform held at the instance of the House of Representatives’ Ad-hoc Committee, chaired by Hon. Ado Doguwa, the CBN Governor who was represented by his Deputy, Mr Shonubi Adeniji, only gave details of the N1.514 trillion Nigerian Electricity Stabilisation Facility intervention fund approved and disbursed to Nigerian Bulk Electricity Trading (NBET) company after post-privatisation exercise.
Meanwhile, the lawmakers resolved to step-down the consideration of the CBN Governor’s report following the observed discrepancies in the previous financial report presented by the Accountant General of the Federation (AGF), Mr Idris Ahmed and other stakeholders penultimate week.
According to him, the apex bank in line with the Federal Executive Council (FEC) approval, granted the total sum of N213 billion, out of which the sum of N189.1 billion was released so far, while the sum of N60.8 billion has been repaid by the operators who accessed the fund through NBET.
The apex bank also approved the sum of N701 billion for the Nigeria Electricity Stabilisation Facility, out of which the sum of N694.98 billion has so far been disbursed as at December 2018.
Mr Emefiele added that out of the N600 billion approved for NBET, the sum of 85.41 billion has so far been disbursed based on NBET advice.
While noting that liquidity remains a major challenge facing the industry, he explained that all the intervention funds were 100% guaranteed by the Ministry of Finance Incorporated on behalf of the Federal Government.
While responding to question bothering on the state of the crisis bedevilling the power industry, the CBN Governor who decried the failure to adhere to the original intendment of the power sector reform, underscored the need to “go back to the intention when the first intervention was conceived.”
He also urged the Committee to engage all the parties involved in the power sector reform and agree with them and for once to have a clear pact.”
“I think we need to go back to the intention and at the beginning when the first interventions were done. There were expectations of everybody and we need to check what those expectations were and everybody paled their parts.
“Because you have a programme I want to build a house and I have planned foundation then to the lintel, then to roof and at the foundation stage, we have a problem if we don’t do the foundation. We need to be careful about blaming the man who has not put up a roof, or the roof is sagging because the foundation is failing.
“I’m not saying all that was planned may have been perfect, but we need to go back and look at what was intended, what each party should have done and if they did it.
“If we check the record we will find out that a lot of people have some basis for the position that we are in. The plans were well laid out but were not implemented.”
On the assessment of the utilization of the N1.514 trillion disbursed as contained in the CBN Governor’s report, he argued that NBET is solely responsible for such oversight.
While stressing that liquidity remains the main challenge facing the power sector, Mr Emefiele explained that the fund was provided with the view to enable the new investors to clear the legacy debts inherited from the defunct Power Holding Company of Nigeria (PHCN) before the privatization of power assets.
While reviewing the CBN Governor’s presentation, Hon. Doguwa who chided the apex bank for undermining the institution of the Parliament frowned at the discrepancies in the presentations of the CBN against the presentations of AGF, NBET and other stakeholders who appeared earlier before the Committee.
In his ruling, Hon. Doguwa said: “As I said earlier on, part of the issues we find ourselves, this issue has to do with facts and figures you have presented. I believe you can agree with me that those of you who are very used to numbers and tabulation can quickly rush into this kind of calculation and make recommendations thereafter.
“I want to speak on behalf of my members that this presentation of this nature with this kind of sensitivity on the disbursement of funds of N600 billion, N701 billion these as far as we are concerned is a very huge amount of Nigerian taxpayers money that basically we need to have to take some time to look at.
“While we are doing that we will come up with necessary observations which will be there for you to provide answers. Without taking the risk of going back to what I said earlier on, it is what I have continuously said, doing this in this kind of manner put our work practically difficult dealing with a huge amount of money.
“And sometimes we are also taking contrary submissions from other agencies. Like in the case of the N600 billion which you now succinctly said that you have only disbursed N85.4 billion, the records we have gotten from the Ministry of Finance was completely different to a significant amount of money.
“The NBET also made a similar statement. If these three or two other agencies were here or if the Almighty central bank was there then, I think these are issues we can just put our heads together and resolve it, and find out where the problem lies.
“So obviously I believe we still have a very difficult work to handle. I want to once again re-emphasise that we appreciate the time that you have spared to honour the people of Nigeria in the parliament but basically that’s notwithstanding I still want to say that some of these things may not be exhaustively discussed here today. So I will allow members to still go ahead and ask questions based on what they have been able to comprehend,” Hon. Doguwa stressed.
While stressing the need to halt deliberation on the CBN Governor’s submission, Hon. Doguwa said: “I will allow members to ask questions but with the restriction, please reserve your questions on this submission for now. Because you basically need time to study this submission and at the end, we can do the right thing at the right time so that we can subsequently guide the House appropriately.”
To this end, the Chairman ruled that all the stakeholders to appear before the Committee at the next investigative hearing which will be communicated to all the parties with the view to clarify the discrepancies and reconcile accounts.
Recall that the Accountant General of the Federation had in his presentation to the Committee confirmed the disbursement of the total sum of $8.234 billion expended on National Integrated Power Project between 2005 and 2007 from the ECA by the Federal Executive Council comprising the State Governors, via a letter Ref. No: PRES/134 of 9th September 2005, signed by President Olusegun Obasanjo through which the President informed the National Assembly.
Breakdown of the fund further showed that the sum of $2,859,390,31.61 from 2005 to 2007, while the mandates were issued to CBN for the total sum of $3,068,167,378.92. However, mandates for the sum of $364,513,747.31 were not applied by CBN and the total sum of $364,513,747.31 was reversed.
“Subsequently, approval was given to use part of the unapplied mandates for the payment of $155,736,700 to Kaztec Engineering Ltd, leaving a balance of $208,777,047.31 as analysed in the summary and Ledger.
“On 19th June 2008, the National Economic Council approved the sum of $5.375 billion be sourced from Excess Crude Savings Account by Federal, States and Local Government Councils in the sum of $2,463,448,500, $1,948,244,000 and $963,307,500 respectively and to be utilized on the Emergency Power projects. The total amount withdrawn for the power project from ECA was $8,234,390,331.61,” the AGF’s document stated.
In a letter dated November 23rd, 2005, with Ref. No: PRES/87/111 signed by Taiwo Ojo, Special Assistant to the President in reference to a letter with Ref. No: FMP&S/HM/ABJ/033 dated 22nd November 2005, conveyed the approval of Mr President for the approval of $2.5 billion (N309.7 billion) for the implementation of Niger Delta Integrated National Power Project.
The breakdown of the funding of the Niger Delta Power Holding Company (NDPHC) and National Integrated Power Projects contributed by the three tiers of government showed that Federal Government contributed a total sum of $3,773,952,839.22 (45.83%); States contributed $2,984,670,057.16 (36.25%) while Local Government Councils contributed $1,475,767,435.23 (17.92%).
On her part, the Director-General of Debts Management Office (DMO), Ms Patience Oniha disclosed that $1 billion Eurobond commercial loan was sourced from investors at commercial rate sequel to the approvals of the Federal Executive Council and National Assembly for the power sector.
According to her, $500 million was for 5 years while an additional $500 million was for 10 years repayment.
She also notified the lawmakers of the $150 million loan sourced by Rural Electrification Agency (REA) under the Nigerian electrification Project, out of which $0.71 million (representing 1.47%) has so far been released to the agency by the Development Partner.
She added that the loan attracts 5 years moratorium and 20 years repayment plan.