Many Nigerians would not know where Sao Tome is on the world map, given that the twin island country is of little, if any, strategic importance to Nigeria.
That however did not stop former President Olusegun Obasanjo, in 2004, from doling out $5 million as loan to that nation. Mr. Obasanjo also paid out $40 million as loan to Ghana same year.
Such were the frivolity and impulsiveness that characterized government spending since the return to democracy in 1999.
Between 2004 and 2014, a catalogue of fuzzy loans was indiscriminately granted in off-budget spending to government agencies in what appeared an attack on the nation’s oil savings.
Extra-budgetary sums were dispensed in the name of loans to the foreign countries, the Independent National Electoral Commission (INEC), Inspector General of Police (IGP), the National Security Adviser (NSA), the Ministry of Defence and other agencies.
Minutes of the December 2014 meeting of the Federation Account Allocation Committee (FAAC) Post-Mortem Subcommittee obtained by PREMIUM TIMES show that these funds were discretionary, off-budget loans paid out of the Reserve Accounts especially the 0.5% Statutory Stabilization Fund.
According to the report, the loans granted by Mr. Obasanjo to Ghana and Sao Tome came from the Statutory Stabilization Fund Account.
Over N18 billion was also taken from the reserve account as loan to the Federal Government for its Pioneer Consumer Car Scheme for public servants in paramilitary agencies.
In August 2006, the then President Obasanjo granted N4.58 billion as the first loan while the second and third tranches of N2.8 billion and N10.76 billion were granted in May and December 2007 respectively under the President Umaru Yar’Adua administration.
From the Statutory Stabilization Fund Account, Mr. Obasanjo had pulled out N300 million for IGP to purchase vehicles. In June of 2006 N242.6 million was paid out. Between June and October, two other loans were granted for the same purpose to purchase apparently another set of vehicles.
The amounts were N33.9 million and N32.6 million respectively. Separate loans of N4.57 billion and N1.6 billion, dated February 14 and April 3, 2007 were tagged “Loan granted to Fund for 2006 Virement”.
Notwithstanding provisions already made in the budget, INEC, on two occasions, was granted loans to fund the 2011 and 2015 general elections. In May 2007, over N66.7 billion was given to INEC to fund the 2011 General Election. In December 2013, N3 billion was withdrawn from the Statutory Stabilization Fund Account and given as loan to INEC to speed up its readiness for 2015.
Given that the Statutory Stabilization Fund is a special fund that requires constitutional mandate for its appropriation, the indiscriminate manner in which the loans were approved for these agencies showed a serial disdain for due process.
In September 2010 and February 2011, about N80 billion was taken from the Excess Revenue Domestic and Non-Oil Excess Revenue Accounts as amount borrowed to pay States’ London Club Debt Buy-back. The money was taken in three installments. While the first N48.44 billion was withdrawn from the Non-Oil Excess Revenue Account in September 2010, two other withdrawals of N28.7 billion and N2.83 billion were made from the Excess Revenue Domestic Account respectively.
While some of the withdrawals might be explained as prudent in terms of meeting exigencies associated with economic crisis, the manner they were done were underscored as weak resource governance and mere financial gaieties.
On the part of former President Jonathan, series of loans approved by him were to defence and security. They had the most impact in depleting the nation’s oil reserve. For instance; a loan of N5.5 billion was given to the Office of National Security Adviser in December 2013, for an undisclosed purpose. In the same manner, a loan of N2.56 billion was given to Chief of Naval Staff Coast Guard in December 2013 for equally undisclosed purpose.
In what could be said to be an emerging pattern, a loan of N2.56 billion was given to Chief of Naval Staff Coast Guard in 2013. Again the purpose was not declared. Two outstanding loans to the Nigerian Army for training and kitting of recruits were approved at a cost of N2.6 billion and N1.56 billion respectively.
Other loans given to the military in 2013 included a N7.3 billion loan to fund Military Pension Scheme, N8.48 billion loan to Fund Military Pension Scheme, N2.36 billion loan to the Army as Operation Internal Security and N10.8 billion loan to Ministry of Defence Headquarters.
In 2014, over N2.4 billion was also withdrawn as loan to Nigerian Air Force Operation to meet financial requirements under what was tagged as ‘Air Operation’. Another N2.36 billion was granted as Loan to Nigerian Army Quick Response Group and forward operating Bases.
The establishment of the Excess Crude Account (ECA) in 2004 and the Sovereign Wealth Fund (SWF) in 2011 was essentially to save for the rainy day. These accounts were respectively populated with the excess dollar revenue that came in periods when oil prices became higher than budget benchmarks.
These excess funds would have come in handy for Nigeria as the world is hit by falling oil prices. At various times state governors insisted that these accounts be emptied and shared among the federating states.
Other loans granted between 2013 and 2014 included a N9.19 billion loan for subscription to Islamic Development Bank shares; N2.35 billion loan to the Department of Petroleum Resources as 4% Cost of Collection for month of September, 2014; N8.27 billion loan to the Federal Ministry of Power, another loan of N1 billion to the same Ministry of Power; N3.36 million to the Federal Ministry of Finance for verification of solid minerals and N350 million loan to Nigeria Mortgage Refinance Company Plc.
Yet, other loans were N1.99 billion purportedly released to Health Intervention Workplan/Budget on Ebola Virus Disease; N2.39 billion to Standard Alliance Assurance Ltd being 2013 Armed Forces Group Life Assurance Premium.
All the loans, which remained outstanding by October 31, 2015, violated Nigeria’s fiscal responsibility law and this has made the FAAC Post-mortem committee to recommend that the Office of Accountant General of the Federation (OAGF) examine the loans and grants to ascertain those that need to be written off.