CHAIRMAN’S SPEECH PRESENTED ON THE SUBMISSION OF THE REPORT OF THE JUDICIAL COMMISSION OF INQUIRY INTO THE FUNDS ACCRUING / RECEIVED AND THE UTILIZATION OF BENUE STATE FUNDS / ASSETS.
His Excellency will recall that on August 11, 2015, you inaugurated this Commission with my humble self as Chairman.
In your inaugural speech, you had directed that the Commission should be guided by the rule of law and due process. You also stated that the objectives of the Commission were not to witch-hunt anyone but to set the records straight. The Commission followed these principles throughout the course of its assignment.
Immediately after inauguration, the Commission held its first meeting at Court 4, High Court of Justice, Makurdi. This was also the venue of the public sittings of the Commission.
The Commission received a total of 69 memoranda, heard oral testimonies from 108 witnesses and received over 394 exhibits.
The Commission found that during the period covered by its assignment which is from June 2007 to May 2015, a period of 8 years, the total revenue that accrued to state from about the 27 sources identified by it was one trillion, twenty -one billion, nine hundred and thirty – one million, forty- three thousand one hundred and sixty – three naira sixty-three kobo (Nl,021,931,043,163.63).
Out of this amount, the actual appropriated amount was eight hundred and two billion, forty-four million, seven hundred and thirty-five thousand, three hundred and thirty – six naira (N802,044,735,336.00) leaving a balance of two hundred and nineteen billion, eight hundred and eighty-six million, three hundred and seven thousand, eight hundred and twenty-seven naira, sixty-three kobo (N219,886,307,827.63) unapproapriated.
The Commission therefore focused on the expenditure pattern and utilization of the revenue that came to the State within the period.
We however wish to point out that our inquiry did not focus on contracts awarded within the period and the payments therefor. This is in view of the fact we are aware that you have already set up a Contract Review Committee. We did not also take oral evidence from the tertiary institutions, but rather recommended that the law on Visitation Panels should be enforced.
Your Excellency, out of the total revenue that accrued to the State, only 15% thereof was allocated to capital expenditure, while 85% was for recurrent expenditure. The little amount allocated to capital expenditure was characterized by lack of due diligence in contract awards, contract inflation, abandonment of projects after collecting payments as well as payments for jobs not done, while there were multiple payments for same jobs. All those resulted in a huge expenditure profile without a corresponding physical development.
The management of the huge recurrent expenditure was even worse. Financial instructions and regulations were completely set aside. For example,
- a) MDAs such a Benue Internal Revenue Service (BIRS) Ministry of Commerce and Industry and Radio Benue generated revenue and spent it directly
- b) Other MDAs including the Bureau for Local Government and Chieftaincy Affairs and the Ministries of Finance, and Commerce and Industry resorted to cash transactions to obliterate the track of funds movement
- c) Some contracts of over N100 million were awarded verbally
- d) Other contracts were awarded without a contract sum thus paving way for endless payments as desired by the awarding authority
- e) Some funds for specialized purposes such as Sure-P, bonds, Ecological Funds and 2012 Flood Relief were diverted to other uses
- f) Loan-based schemes such as the Central Bank of Nigeria Agricultural Credit Scheme, Micro, Small and Medium scale Enterprises Scheme and the commercial motor vehicle loan scheme were mismanaged. Consequently, recovery of such loans was very poor
- g) Outright theft of public revenue such as the payment of N3.ll billion out of the proceeds of the sale of government shares into a private account by the Ministry of Finance and
- h) Invention of alien sub-heads such as cost of running government andgovernment house expenditure under which close to six billion naira was taken out Assets were sold without following due process, especially by the Ministry of Finance through Benue Investment and Property Company, and the Ministry of Commerce and Industry.
All these infractions, which were assisted by Civil and Public Servants, paved way for the massive looting of the State Government funds and assets which took place between June 2007 and May 2015.
Consequently the Commission has recommended that 52 individuals and 10 corporate bodies should refund the sum of one hundred and seven billion, six hundred and nine million, three hundred and twenty-one thousand, one hundred and six naira (N107,609,321,106.00). It has also recommended for deeper investigation and possible refund a further forty four-billion, seven hundred and twenty -one million, five hundred and fifty – three thousand, four hundred and sixty-seven naira seventy kobo (N44,721,553,467.70). It has also recommended disciplinary actions against persons involved in various infractions.
Your Excellency, the Commission found irregularities in the floating of the revenue bonds, especially the 2014 N5 billion bond. Firstly, the bond was four billion, nine hundred and fifty-nine million a a ini (N4,959,000,000.00) and notN5 billion. Secondly, the offer for subscription opened and closed on the same day February 25,2015. Thirdly, the cost of issuing the bond was N914 million, that is, 18.4% of the bond instead of the normal 3% – 5%. Besides, only four billion, five hundred and thirty – seven million, five hundred and ninety-six thousand, three hundred and twenty naira fifty kobo (N4,537,596,320.50) was received by the State, as proceeds leaving a balance of four hundred and twenty -one million, four hundred thousand naira (N421,400,000.00) unaccounted for. This brings the total cost of issuing the bond to one billion, three hundred and fifty-three
million naira (Nl,353,000.00) or 27% which is most unreasonable. Finally, the cost of issuing a bond is normally deducted from the proceeds of the issue and not in cash. The Commission found that the bond proceeds were diverted to other purposes different from what the Prospectus claimed.
The Report is in four volumes. Volume I contains the Record of Proceedings and the Governor’s Inaugural Speech. Volume II is the Report of Findings and Recommendations. Volume III comprises the Record of Witness Invitation and Proof of Service. The final volume is the Executive Summary.
We the members of the Commission wish to deeply appreciate the Almighty God for His mercies, guidance and protection in the course of this assignment. We also wish to express our heart-felt gratitude to His Excellency for finding us worthy to serve in this sensitive Commission. We hope that this Report will assist the State to address the challenges inherited from the past Administration.
Your Excellency, I hereby submit the Report to you.