17 August 2011

Nigeria: Housing Fund - Staff Involved in Loss of N100 Billion--FMBN

Abuja — Management of the Federal Mortgage Bank of Nigeria (FMBN) has confirmed that all is not well with its financial operations as it disclosed that the bank lost over N100bn through dubious and unlawful practices by some of its employers.

Managing Director of the bank, Mr. Gimba Ya'U Kumo who spoke at the premises of the Economic and Financial Crimes Commission (EFCC) on Monday also disclosed that the total amount of money collected from 3.6million registered contributor for the National Housing Fund (NHF) as at 30th of June, 2011 stood at N72billion.

Kumo who addressed the chairman of EFCC, Farida Waziri during the signing of Memorandum of Understanding (MOU) for the provision of shelter for the anti-graft agency's staff, called on the Commission to probe the non-remittance of National Housing Fund to it by the Federal Government as stipulated in the NHF Act.

He said that the flagrant violation of the NHF Act by a number of employers was derailing the scheme quest for the provision of affordable mass housing to the people.

"The Executive Chairman of the EFCC, we would like to use this opportunity to bring into your attention that the biggest5 challenge of the NHF as a laudable scheme to provide affordable mass housing to low and medium income Nigerians is that flagrant violation of the NHF Act by a number of employers"

The FMBN boss exposed some ways whereby employers use to subverted the laid down rules, thereby defeating the aim of the fund and cited illegal directives from Labour Unions as an excuse to avoid monthly deductions of NHF contributions from workers' pay as required by Section 9(1) of the NHF Act no.3 of 1992, failure to remit workers' contributions to the FMBN after deductions as stipulated by section 9(2) of funds for other uses to the detriment of both the bank and the Nigerian workers.

The alleged dubious practices also include failure to provide remittance schedules showing details of individual contributions under which guise, unscrupulous employers employed to withhold part of the deductions.

He added that even though the management had developed NHF E-Collection platform to deal with the employers' sharp practices, the bank would need the assistant of the anti-graft agency in the enforcement of the provisions of the NHF Act.

"To supplement our efforts, we use this opportunity to solicit partnership with the EFCC in the enforcement of the provisions of the NHF Act by employers of labour in the public and private sectors. They are required by law to effect the deduction of 2.5 per cent from workers' monthly income and remit to FMBN within 30 days of such deductions.

"We look forward to a sustained intervention by the EFCC and other security and regulatory agencies to enhance 100 per cent across board."

While calling on the intervention of the commission to arrest the drift, he said that its investigations of some companies' accounts regarding deductions from workers' pay some time ago prompted the Nigerian Employers' Consultative Association (NECA) to issue a circular early in the year directing its member-organizations to resume compliance with the provisions of the Act.

It is pertinent to state that the NHF Act mandates employers in both the public and private sectors to effect the deduction of 2.5 per cent from worker' monthly income and remit same to the FMBN within 30 days of such deductions.

Apart from that, under the provision of the Act, banks are also required to invest 10 per cent of their loan portfolio to the Fund while insurance companies are also mandated to invest 40 per cent of life funds and 20 per cent of non-life funds into the fund.

Also, the sister anti-graft agency, the Independent Corrupt Practices and other related offences Commission (ICPC) had before now disclosed that it has carried out a system review of the activities of the FMBN leading to alleged discovery of sharp practices by some staff and even some Board Member even though the report from ICPC is silent on this area.

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