The House of Representatives is set to summon the Minister of Finance, Kemi Adeosun, Governor of Central Bank (CBN), Godwin Emefiele and the Managing Director of the Nigerian Deposit Insurance Corporation (NDIC), Umaru Ibrahim over the collapse of the National Economic Reconstruction Fund (NERFUND).
Chairman of the Ad hoc Committee on NERFUND, Ayodele Oladimeji said the invitation of the minister and the others became imperative with the discovery that government agencies saddled with the responsibility of disbursing NERFUND’s N17b to Small and Medium Enterprises (SMEs) became culpable in its collapse.
Speaking before the panel over the weekend, former acting Managing Director, Baba Maina Gimba revealed that for 11 years when he served as the FUND’s Chief Executive, the federal government released only N2b but his major responsibility was the recovery of the N17b disbursed before his appointment in 2002.
However, rather than disburse the N2b through the participating banks as prescribed by NERFUND establishment Act of the organisation, it was directly disbursed to beneficiaries through poverty alleviation organisations.
Over 1000 individuals benefited with some getting as low as N200, 000 across the country.
The ad hoc Committee wondered how NERFUND, established in 1989 with just an office located in Abuja would recover its loans from the illegal beneficiaries scattered around the country.
The Committee cited two beneficiaries, a former staff, and another, who was a relation of a former Finance Minister between 1999 and 2007, both got N100m each but refused to repay till date.
While the Committee asked Gimba the reason behind the jettisoning of the prescription of the law on the method of disbursement, he said the Fund was faced with difficulties getting banks to disburse the fund as most of the participating banks were distressed, while others had collapsed.
“It was difficult for NERFUND to get any bank to disburse the money, coupled with the fact that there was no governing board for the Fund throughout its life span that can give other directives, so we had to disburse through poverty alleviation agencies,” he recalled.
The former acting MD also countered saying the Act made no provision for the positions of Executive Director and Managing Director.
The Committee was also told that the then Federal Ministry of Finance Permanent Secretary, who doubled as the Fund’s chairman presided over the disbursement of the N2b, with the Executive Management team left with endorsement of the list from the Finance Ministry.
Raising some posers, the Committee queried, “Nigerians have to know why the law was set aside by those who should know. How would the Fund recover its direct loans, (which was against the law) from the beneficiaries scattered all over the country, knowing full well that it has no capacity to embark on such misadventure.”
“We must find all these out. The House is not averse to the closing down of the operations of NERFUND but we have to know why it collapsed so that we can learn from it. How are we sure that what led to the death of NERFUND is not happening to its successors even as we speak,” Oladimeji stressed.
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