House of Representatives ad-hoc committee probing the activities of the government-owned Development Finance Institutions (DFIs) has frowned at the diversion of multi-billion naira loans approved for private companies.
Worried by the high rate of non-performing loans on the balance sheets of the DFIs, the Ad-hoc Committee on Tuesday unveiled plans to invite all the past managing directors/CEOs to give account of their stewardship.
The Ad hoc Committee via a letter with Ref. No. NASS/8HR/ADC/09 dated December 9, 2016, had directed Central Bank of Nigeria (CBN) and Bank of Industry to submit their audited accounts since 1999 to date.
“In the same manner, we would invite to a public hearing by way of publications in the Nigeria dailies the customers that accounted for the bad debts that have grounded the activities of the DFIs to tell Nigerians why they have refused to pay their loans,” Emeka Anohu, chairman ad-hoc committee probing the DFIs activities, threatened.
Anohu, who spoke at a press briefing held at the National Assembly complex, Abuja, explained that the ongoing investigation of activities of National Economic Reconstruction Fund (NERFUND) revealed that the agency had ceased to function due to its high non-performing loans (NPLs).
“NERFUND, which was set up in 1999 by the Act of Parliament, has ceased to carry out its mandate of providing funds for the MSMEs and large enterprises because of its high non-performing loans which rendered it comatose.
“The government has given an executive order for its operations to be wound down and merged with Bank of Industry. Our investigations have revealed that the agency’s was set up for a very laudable purpose if providing funds to MSMEs, which remains largely unachievable.
“The MSMEs still require cheap funding from the government, which can be better provided through agencies like BoI, NERFUND, BoA and likes. The failure of NERFUND like its other counterparts was due to poor management over the years, diversion of funds to cronies, poor business models that could not support its operations and paucity of funds,” Anohu noted.
Speaking exclusively with BusinessDay, Vivian Bellonwu-Okafor, head, Social Action, blamed the collapse of public owned companies on corruption, lack of transparency and poor oversight by the Legislature.
“So long as government businesses are still shrouded in secrecy and ran in such anti-democratic manner as has been hitherto and largely still the status quo, entities such as NERFUND will continue to collapse.
“While loan award processes are in transparent, loans have been awarded for personal aggrandizement and primordial considerations and in this way, many individuals and entities that have no business receiving these loans have been granted such to the detriment of countless well meaning individuals and business organisations who would not only have effectively serviced these loans but contributed to the growth and development of the economy especially at the middle and micro levels.
“Part of the major reasons why these sorry state of public owned establishments persist is also due to very poor oversight,” she said.
Recall that the aggrieved NERFUND workers had in May 2016, disrupted business activities at its headquarters of the agency over allegations of mismanagement and embezzlement of N700 million.
To this end, Mahmoud Isa-Dutse, permanent secretary of Federal Ministry of Finance via a circular dated June 15, 2016, directed all the staff to stay away from work to forestall further breakdown of law and order as a result of disputes between the Executive Management, Senior Management and other staff of the organisation.
However, the ministry through a statement dated June 28, 2016, signed by Salisu Na’Inna Dambatta, director (information) Federal Ministry of Finance, however directed all NERFUND staff to resume duty.
“The Minister of Finance, Mrs. Kemi Adeosun has directed all staff of the National Economic Reconstruction Fund (NERFUND), to immediately return to their duty posts as the crisis within the organisation has been resolved,” Dambatta said in a statement.
KEHINDE AKINTOLA, Abuja
