Intervention funds: FG spends N2trn in two years

Minister of Finance, Dr. Ngozi Okonjo-Iweala

The Federal Government, under the leadership of President Goodluck Jonathan, has spent at least N1.732trn on intervention funds in different sectors of the economy, our investigation has found.

The figure represents the sum of the amounts approved by the Federal Government as intervention funds between 2010, when Jonathan became President and December 2012.

Some of the intervention funds include the N200bn Small and Medium Guarantee Scheme, N200bn Restructuring and Refinancing Facility Scheme and the N300bn Power and Airline Intervention Fund.

Others are the N75bn Grooming Enterprise Leaders Business Intervention Fund, N32bn Entertainment Intervention Fund and N10.71bn Commercial Agriculture Credit Guarantee Scheme to six banks by the Central Bank of Nigeria.

Also on the long list of intervention funds, are the N300bn approved for the hotel and leisure sub-sector in 2012; N200bn for indigenous pharmaceutical companies and N100bn textile industry bailout.

The Federal Government, between 2010 and 2012, also disbursed N126.1bn as export expansion grant.

Also in 2010, the Federal Government reportedly disbursed about N7.9bn to 25 companies from the National Automotive Fund. The money was for the production of vehicles, motorcycles and bicycle tyres and accessories.

An additional N3bn was earmarked for disbursement to nine companies before the end of that year.

In July 2012, the Federal Government approved N330m grants to assist 20,000 farmers in Lagos state.

Similarly, in November, 2012, the Federal Government, in collaboration with the Central Bank of Nigeria, disbursed a soft loan worth N9.4m to members of the Nigeria Cassava Growers Association, Nasarawa State chapter.

As at July 2011, the Bank of Industry had reportedly disbursed N195bn out of the N200bn meant for the refinancing of the manufacturing sector to 518 companies across the six geo-political zones, while N83bn out of the N300bn for the power and aviation sectors had also been disbursed to companies in these sectors.

As part of Federal Government’s intervention in education in 2012, it approved N95.653bn for public tertiary institutions in the country, through the Tertiary Education Trust Fund.

Within the period under review, the Federal Government disbursed several funds through the Universal Basic Education Commission. One of such was N94m disbursed to 125 communities in Bayelsa State, in September, 2011, for self-help projects.

In the agricultural sector, the CBN, through its Nigerian Incentive-Based Risk Sharing System for Agricultural Lending, approved a take-off grant of N75bn to boost agriculture businesses.

The Head, Project Implementation of NIRSAL, CBN, Mr. Jude Uzonwanne, reportedly said N45bn from the N75bn had been set aside as loans to the farmers, while the balance would be used to train and insure them.

Irked by the situation in which government’s interventions have had little or no impact on the economy, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, conducted a survey and found that only six per cent of industrialists accessed the funds.

NACCIMA said this at the presentation of the survey report to stakeholders in July 2012.

NACCIMA President, Dr. Ademola Ajayi, said the intervention funds were faced with the problem of accessibility.

According to Ajayi, despite the Federal Government’s N100bn textile bailout fund, less than 25 per cent of textile manufacturers were operating above 50 per cent capacity utilisation.

Apart from inability of stakeholders to access the government’s intervention funds, there have been discrepancies in the administration of the funds.

While some of the funds have been diverted to other uses, parts of the funds can no longer be accounted for.

The Senate Committee on Public Accounts, last year, raised the alarm over a missing N44bn from the Federal Government’s Special Intervention Fund on Solid Minerals.

The committee discovered the missing funds during an interactive session it had with officials of the Federal Ministry of Finance, the Central Bank of Nigeria and the Office of the Accountant-General of the Federation.

The committee said despite the fact that the fund was created by the Federal Government as a special intervention fund to develop the non-oil sector of the nation’s economy, no project had been accomplished in the sector.

According to the Senator Ahmad Lawan-led committee, the records of the Federal Ministry of Finance and that of the Central Bank of Nigeria could not properly account for about N44bn, out of the total figure of N873bn, between 2002 and May 31, 2012.

The committee also found that part of the funds had been used to finance projects in other sectors.

Meanwhile, an anti-corruption group, Coalition for Against Corrupt Leaders, said Nigerians had yet to see the impact of the funds on their lives.

The Executive Chairman, CACOL, Mr. Debo Adeniran, said, “The funds are meant to settle the boys, the political elite. It is just a palliative to hoodwink people into believing that the government is helping them.

“The solution is not to dole out funds but to make sure jobs are generated and infrastructure is developed to encourage small and medium-scale industries. There should be micro-credit facilities for entrepreneurs to increase local content. Most intervention funds are a wrong step in the right direction. The government is just chasing shadows. The funds will not make people face the reality to be creative and productive.”

Another group, Socio-Economic Rights and Accountability Project, said it was improper for the government to approve intervention funds for private enterprises, citing the example of the aviation sector.

The Executive Director, SERAP, Mr. Adetokunbo Mumuni, said, “If the government allocates funds for public institutions, provided it is properly accounted for, it is acceptable; when such funds are for private businesses, it is not acceptable. Why use the public funds to intervene in private enterprises? It is unreasonable and unjustifiable.

“Spending on private businesses sounds fraudulent. Monies have been spent without proper account for them. The government can only give financial intervention, provided funds would be spent transparently and accountably.”