As Senate declares diversion illegal, says Minister lacks power to give zero interest on $350m Eurobond Fund
***As Adeosun, Fashola others defend allegations.
By Henry Umoru
ABUJA – THE Senate, yesterday took a swipe at the Minister of Finance, Mrs. Kemi Adeosun, saying that she lacks the powers to authorize zero loan interest on $350 million Euro Bond from the stabilization account.
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Meanwhile, the Managing Director/Chief Executive Officer of the Nigerian Sovereign Investment Authority (NSIA), Uche Orji, yesterday told the Senate that the $350 million it is managing for the Nigerian Electricity Bulk Trading Company (NBET) has grown to $384 million, just as he said that the fund was safe.
According to him, the Authority will meet in April this year where the statement of account would be updated and adopted.
Also yesterday, the Minister of Finance, Mrs. Kemi Adeosun and her counterpart in Power, Works and Housing, Babatunde Fashola denied alleged diversion of $350 million from the NSIA.
Both Adeosun, Fashola and Orji spoke yesterday in Abuja when they appeared before the Senator Matthew Urhoghide, PDP, Edo South led Joint Senate Committee on Public Accounts and Power, Steel Development and Metallurgy.
The amount is part of the $1 billion Eurobond facility obtained in 2013.
Speaking further, Orji who noted that the fund has increased by $34 million, told the Lawmakers that $397.5 million was initially realised, deduction of $13.5 million to service the interest of the amount, reduced the funds to $384 million, adding, “The NBET funds are intact with the NSIA. As of our September statement, it has grown from $350 million to $397.5 million. $13.5 million was recalled by NBET to service the interest. So what we have at the moment is $384 million. So the funds are with us and they are safe.”
On her part, Adeosun who explained that contrary to the motion on the floor of the Senate, there was no missing fund, stressing that part of the proceeds of the Eurobond was deposited in NSIA, following the inability of the Nigerian National Petroleum Corporation (NNPC) to utilise the money for the specified projects.
In their observations, the Senators who took turns in asking questions, queried the Ministers on why he gave lone at zero interest from the stabilization accounts to Nigerian Sovereign Investment Authority (NSIA) for a tenure of one year to private company.
But Senators Urhoghide, Godswill Akpabio, Suleiman Hunkuyi, Albert Bassey, Enyinnaya Abaribe, others, however wondered why the proceeds of the Eurobond was diverted for a different purpose other than that prescribed by the Seventh National Assembly when the Federal Government sought approval for the facility in 2013.
Specifically, Apkabio accused the Finance Minister of usurping the powers of the state.
But responding, Adeosun asked the Committee to invite her predecessor, Dr. Ngozi Okonjo-Iweala since the facility was obtained during her time as Minister of Finance and Coordinating Minister of the Economy.
Adeosun said: “These decisions were made by my predecessor. And I am working on the memos I have access to. For a fuller discussion, you might need to have some discussions with her. But from what I can read from her memo to the then President (Goodluck Jonathan), NNPC was not ready for the $450 million and therefore they amended the uses of the fund and notified Mr President then. Why that situation arose, of course, I am not privy to the rationale”.
Senator Urhoghide however rejected her request that her predecessor be invited, Her request to have her predecessor invited, insisting that since government was a continuum, she was bound to defend policies that preceded her.
It will be recalled that Senate had mandated its Committee on Public Accounts to ascertain the $650 million balance of Eurobond with the Transmission Company of Nigeria (TCN) and the Nigeria National Petroleum Corporation (NNPC).
The Committee was also mandated to invite the Minister of Power, Works and Housing, Babatunde Fashola, to render a detailed account of public funds spent on the Afam Fast Power Project, even as the committee was asked to investigate and consider summoning the Nigerian Sovereign Investment Authority (NSIA) and Nigerian Electricity Bulk Trading Company (NBET) to establish the status of the funds.
The resolution was sequel to a motion sponsored by Dino Melaye (APC, Kogi State) on “Monumental Fraud in the Power Sector”.
The Senate Public Account Committee (SPAC) had threatened to issue a warrant of arrest on the Minister of finance if she fails again to honour the Committee’s invitation to appear before it to explain her role in the billion dollars Euro bond, which prompt the minster to appeared before the joint committee yesterday
The Chairman of the Committee on Public Account, Mathew Urhoghide who asked for the background and the purpose of the bond equally queried why the details of recovery did not show as the money was not be paid once, adding, “the $350million was suppose to be paid to NBET but the money was used to be paid for Afam fast power, why is it so?
Also the Chairman, Committee on Power, Enyinnaya Abaribe questioned the minister on what gave her the right to authorized the zero lone interest
“We should know, let the minister explain to us If the minister had the right authority to give loan at zero interest from the stabilization accounts and given to NSIA tenured for one year for private company and how much had been recovered from the Swiss yard cost of $2.3million?
A member of the committee, Yusuf Abubakar Yusuf, APC, Taraba Central asked whether the minister has prospectus and obligation to monitor the use of the money and ensure that they are not diverted as well as management framework for the money borrowed.
Also, Senator Bassey Akpan, PDP, Akwa Ibom North East) asked why some of the requests had no presidential approval.
The Minority leader, Senator Godswill Akpabio, PDP Akwa Ibom also attacked the minister for stopping the power of the states by positioning herself in charge of NSIA without involving the state governors.
In his presentation, Fashola debunked allegations of fraud and diversion of $350 million levelled against the ministry.
On Afam fast power project, Fashola said: “It was an investment by the General Electric, a globally reputed Original Equipment Manufacturer (OEM), to invest in our country and support our effort to get good quick power under our roadmap of incremental, steady and uninterrupted power.
“They offered to do this by providing Nigeria with mobile turbines of 600MW if we could find a location with gas and transmission evacuation infrastructure. The Afam power station fitted because it had transmission and evacuation facilities but all its turbines had been virtually run down.
“The investment was contingent on paying 27.9 million dollars, which was 15 percent of 8 units of 30MW turbines each totalling 240MW valued at about 186.6 million dollars.
“This payment of 27.9 million dollars was made without breaching any law.“
He further said that the Turbines have arrived Nigeria and currently at the Onne Port.