Nigeria: Senate Probes Trade Ministry, NEPZA Over N14.3 Billion Fraud

22 October 2019

The Senate has opened an investigation into an allegation of illegal transfer of N14.3billion from the 2017 budgetary allocation of the Nigerian Export Processing Zones Authority (NEPZA) to a private company, Nigeria Special Economic Zones Company.

The Chairman, Senate Committee on Trade and Investment, Rose Oko (Cross River North, PDP), said this Tuesday when the Minister of State for Trade and Investment, Maryam Katagum, appeared for her ministry's budget defence.

Ms Oko said the transaction was in breach of the 2017 Appropriation Act and demanded a full explanation from the minister on how the money left government coffers to a private company account without due process.

The same committee had in April (during the 8th Senate), directed the former Minister of Industry, Trade and Investment, Okechukwu Enelemah, and the acting Managing Director of NEPZA, to return N14.3 billion to the federal government.

The committee said the money was diverted from the 2017 budget of NEPZA. It asked the minister and the NEPZA boss to either refund the money immediately or be prepared for dire consequences.

"The money was "hurriedly" transferred between April 8 and 10, ignoring an earlier warning not to do so," the committee said.

In her remarks, Ms Oko said the committee was aware of the existing legislative query on the ministry and the NEPZA over the N14.3 billion, illegally transferred from the 2017 Appropriation Budget of NEPZA to Nigeria Special Economic Zones Company. "This is a breach of the 2017 Appropriation Act", she said.

She said the committee intends to "see the query and inquiry to a logical conclusion and seek explanation how that sum got moved from government coffers ostensibly to a private company without due process and without provision of goods and services."

Responding to the allegation, the Permanent Secretary of the Ministry of Trade and Investment, Edet Apkan, said the money was not eventually released to the company and that it is still in the custody of the Central Bank of Nigeria.

He also said the idea of opening an equity company was the creative idea of the former minister.

"He believed it was more proper to have a centralised equity company that could manage all Free Trade Zones in the country - where investors could contribute towards a particular purse so that money realised from there would now be applied to create and develop free trade zones.

"And it was also believed that NEPZA and oil and gas free trade zone should concentrate on regulatory aspects (of their mandates) and not getting themselves involved in operations. That was why it was the decision that an equity company was necessary to be created," he explained.

Mr Akpan explained that all the former minister did throughout that period, was consult very widely and he also got approval of the Federal Executive Council. He also said the minister also requested from the Budget Office the sum of N48 billion be appropriated for the purpose of that investment in 2017.

"Unfortunately, the amount that was released for that purpose was about N14 billion. And that N14billion was again 100 per cent controlled by NEPZA. It had nothing to do with the main ministry because the main ministry hadn't the power or authority or anything to do in respect of the amount that was appropriated under a particular agency of the ministry.

"So that was how it was done. But then, when the minister thought of implementing the programme, he had meetings with NEPZA for the purpose of requesting that NZESCO was set up and that he had gotten the directives of the Federal Executive Council that that money should now be applied and now he requested that NEPZA should then transfer that money to an account that was opened at the CBN. That was done.

"I think in the course of trying to implement that policy of the ministry, a kind of disagreement arose in terms of who were the subscribers to the company. I think one of those subscribers was the Ministry of Finance Incorporated and one Mr. Wadinga was choosen as the representative of the Ministry of Finance at that body.

"The concept, according to the Honourable Minister in selling it to the public, was that for it to be formally incorporated, it need not have much of government as shareholders - so it was proper that he made use of the private sector," Mr Akpan explained.

He further explained that the former chairman of the committee, Mohammed Sabo, made some observations that the execution of that project should be put on hold. He added that the money in question is with the CBN.

"So that was how NEPZA then wrote to CBN, that money should not be appropriated in favour of NZESCO. But from 2018, it came in as an item of expenditure in the budget and the sum of N9 billion was appropriated for that purpose.

"I cannot say whether any aspect of that was released to NEPZA or not, but they will be able to explain that. So as it is now, that money is in CBN. We did brief the two honourable ministers when they came on board and I think the minister has also consulted with the appropriate authorities on what the next line of action should be in terms of implementing that programme," he said.

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