Nigeria’s Upper legislative chamber says it is demanding an explanation from the Ministry of Aviation about an astounding N174bn ($1.07) debt it accumulated in the past three years with neither authorization nor oversight, but analysts said “the Senate is a part of the problem.”
The order was given on Monday by the Chairman of the Senate Committee on Aviation, Senator Hope Uzodimma, who said during an oversight visit that his committee had no knowledge of the debt story, and suggested that the debt reflected bizarre borrowing and management practices in the Ministry.
He also demanded the immediate stoppage of one of the unauthorized projects being implemented by the Ministry, stressing that he did not know where the funds were supposed to come from.
“This has to be stopped because there is no money for it,” he thundered, adding that the Ministry should not simply commit the government to spending if they are not sure of where the money is going to come from.
“My advice to this ministry, so that they will not embarrass the government, is to do your best to ensure that you don’t unnecessarily and without approval commit government,” he said, warning the Ministry that it will not enjoy the support of the Senate on the project because the Upper House “will not be part of an arrangement that will put us into disrepute.”
The massive debt at play is largely being owed to contractors in a variety of contracts awarded under the tenure of fired Minister Stella Oduah, and Senator Uzodimma told the supervising Minister for Aviation, Mr. Samuel Ortom the he wanted to hear how the Ministry plans to satisfy the debt.
“I have looked at the documents and seen the level of debt,” the stunned Senator said. “I wonder how this excessive debt will be offloaded by the Ministry.”
Replying, Ortom informed the Senator that neither he nor the Permanent Secretary of the Ministry, Mrs. Jemila Shua’ara, were in office when the debt was incurred, as they only assumed their offices recently.
“You can see that in BASA, we have only N10.6 billion in our purse and an exposure of N36 billion,” Senator Uzordinma said in reference to the Bilateral Air and Safety Agreement (BASA) contracts. “I know that this account is being handled by the National Assembly and the Presidency, and we couldn’t have given approval to any commitment more than how much we have in that account. So we need a proper reconciliation, because there is supposed to be an approval from the National Assembly before you can spend BASA money.”
The chairman also questioned the borrowing of $100 million by the Debt Management Office (DMO) and a Chinese loan of $500 million without approval by the National Assembly according to the law.
Ortom told the Senator that the loans for upgrading the Lagos, Abuja, Port Harcourt and Kano airports did not need to go through appropriation because it was part of a “counterpart funding” arrangement. The Senate was indisposed to the $18.3 million interest which the $100 million had already attracted.
The angry legislator underlined that prior approval was required in the first place before the Ministry could have embarked on the loan drive.
“We also need, under the borrowing plan, an approval from NASS, we didn’t see where National Assembly was allocated to be borrowed by DMO, we need the president’s approval to borrow that money and we need the business studies and how you intend to pay the interest.”
Demanding all the details of all the loans, Senator Uzodimma added: “On the terminals, the $500 million loan, we need to see the design, we don’t know the size of the airport; we don’t know where work has started on them.
“For the first time, we just heard [about] Phase 3 and so much money is being allocated to it, where are we going to get the money from. Because looking at our appropriation, we must make provision from the N63 billion appropriation.”
Mr. Ortom however insisted that he was not a part of the ministry when the contracts were awarded, he believed they all went through due process before they were awarded, and requested the solicited the support of the Senate so as not to stall some of the projects that are currently close to completion.
“We hope that the synergy between the executive and the Senate will give us the desired result, to take the industry to the next level,” he pleaded, noting that on the BASA approvals, the Ministry has already sent them to the committee.
The supervising Minister explained that both the $100 million DMO loan and the $500 million Chinese loan were on the basis of a “counterpart funding” agreement that is being handled by the Minister of Finance, Dr. Ngozi Okonjo Iweala, and that the Minister had told him she has the approvals.
On the Phase 3 projects, Ortom observed that out of concern for the huge indebtedness in the Ministry, he and the Permanent Secretary, who arrived at about the same time, have not awarded any contracts and do not intend to do so.
Confirming the size of the debt to be about N174 billion, he said, “What we have done is to reach out to the Ministry of Finance and the Budget Office, and we have set up and Inter-Ministerial Committee that will look at all the issues based on the interim report.”
Of the projects that have not yet begun, he said the Ministry would halt work on them for now because the funds are not there. “We have agreed within the ministry that the inter-ministerial committee will look at all these and suspend or prioritize those projects that are of necessity and channel the funds to the appropriate directions.”
Analysts said today that the vast numbers involved are a reminder of how ruthless Ministers and other officials manipulate their official portfolios in the drive to grow rich, while their assignments are ignored.
“Note that the Senate is not demanding that the former Minister, Stella Oduah, be dragged to its chambers to account for these contracts and debts,” one analyst said. “The Senate is not inviting the crafty Okonjo-Iweala to sing in public because it is convenient for members of the spoilt political class to ignore the essential issues. But wait until there is an air crash, and they will pretend to be interested in the issues of contractor that provided shoddy jobs perhaps because they were paying-off dubious officials of the Ministry of Aviation and of Finance!”
Sneered one newspaper columnist, “Perhaps members of the Senate Committee on Aviation were paid to look the other way while the accounts were being cooked. How can Chairman Uzordinma say his committee has been in the dark in the past three years? Tell me how!”