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Phantom Auditor General’s Report and ‘N123billion Fraud’: In Defence of My Name.

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By Stephen Oronsaye.

My attention has been drawn to yet another attempt at character assassination against my person by means of false allegations in a report first published online in the Premium Times on September 15, 2014 and subsequently in some other Nigerian newspapers.

As on a previous occasion when I refused to join issues with the authors and publishers of similar false allegations and reports, I would ordinarily have chosen not to dignify the targeted hateful innuendoes in the misleading report entitled: “Auditor General’s Report Indicts Ex-Head of Service, Oronsaye, For N123 billion fraud” with any response, especially since the so-called audit report has been dismissed as a work of fiction. However, since my silence is capable of being misconstrued by the reading public, it has become necessary for me to set the records straight.

While it is not in my character to enumerate the successes I recorded in the different positions I have been privileged to hold, the records clearly attest to the fact that I did my best possible to reform the pension administration of the Service while I was Head of the Civil Service of the Federation between June 2009 and November 2010.

Therefore, it is quite curious that although “the audit report” was said to cover the period 2005 to 2010, the sponsors of the report only found it convenient to focus on the period in which I was in office and even in doing so, deliberately overlooked the period during which I and my team made efforts to address the problems associated with pension administration at the time.

The online report alleged that the “audit report” which the Office of the Auditor-General for the Federation has since disclaimed, found that the pension payroll was never subject to internal audit between June 2009 and December 2010; and that over N52 billion paid out as monthly pension was not presented for internal and federal audits for prepayment audit as required by Nigerian financial regulation (sic).

In actual fact, I worked closely with the Internal Auditor in the Office of the Head of the Civil Service of the Federation at the time. It was this Internal Auditor’s report that actually prompted the setting up of the Pension Reform Task Team at the time. This can be verified from the official records. As a Chartered Accountant and having served as Permanent Secretary prior to my appointment as Head of the Civil Service of the Federation, I am fully conversant with the imperatives of accountability and the implications of not applying the rules.

For the records, the major gap identified in the administration of civil service pensions when I came on board in 2009 was the lack of proper records. My team and I made far reaching efforts to address this shortcoming through the physical verification and biometric capture of civilian pensioners across the 36 States of the Federation and the Federal Capital Territory (FCT) who retired from the Service before July 1, 2007.

Through that exercise, the Office of the Head of the Civil Service of the Federation identified and eliminated no fewer than 70,000 (seventy thousand) fake/ghost pensioners from the pension payroll. To my credit and that of my team, and the relief of pensioners, 34,432 (thirty four thousand, four hundred and thirty two) pensioners who had hitherto never been paid their pension at the time, were enrolled and paid their pension as well as the arrears of their harmonized pension. In addition, under my watch, the Federal Government made a monthly saving of about N1 Billion.

Perhaps if the sponsors of the report were not so lazy, they would have dug out the letters I did to the then National Security Adviser (NSA) on December 10, 2009 (Ref: HCSF/061/S.1/III/250) and November 8, 2010 (Ref: HCSF/061/S.1/VI/53) drawing the attention of the NSA on both occasions and requesting for investigations into unclaimed pension benefits that were hitherto fraudulently paid into certain bank accounts.

In like manner, I wrote to the then EFCC Chairman in November 2010 vide letter reference HCSF/061/S.1/VI/54, forwarding four spiral-bound documents containing the names of different categories of supposed pensioners and the banks to which the funds were hitherto paid. The document was put together by the then Director, Pension Department in the Office of the Head of the Civil Service of the Federation.

In that letter, I drew the attention of the EFCC Chairman to the fact that “prior to the introduction of the integrated e-payment, pension benefits were paid to banks and all the payments were supposedly claimed by the bona fide beneficiaries. However, with the introduction of the integrated e-payment system, no one had come forward to claim the pensions that were hitherto paid to the banks for onward payment to the pensioners.” I therefore requested the EFCC to cause an investigation to be made into the matter with a view to resolving all the issues and prosecuting all those found culpable.

In another related matter, I had cause to write to the Central Bank of Nigeria (CBN) in August 2010 (Ref: HCSF/061/S.1/V/81), forwarding a 561-page record containing names and account numbers of 11,732 persons alleged to be fake pensioners but who were paid pension in their names for the month of May 2010, through banks stated. Again, I requested for an examination of the banks to ascertain how the funds were applied.

 

Contrary to claims that over N52 billion paid as monthly pension during my tenure remained largely unaccounted for, I actually ensured transparency in the administration of pension through the biometric measure mentioned above among others. The full report of the Pension Task Team, which was released after I had left office in 2010 would clarify this position.

It is also uncharitable for anyone to concoct a report suggesting that as Head of the Civil Service of the Federation, I oversaw an era of corruption in pension administration to the low level of receiving kick-backs totaling N1.03 billion from the Nigerian Union of Pensioners (NUP). It is on record that I repeatedly faulted the NUP for deducting check-off dues from its members, contrary to the provisions of the Constitution of the Federal Republic of Nigeria and in fact wrote to the Attorney-General of the Federation and Minister of Justice to reverse the unconstitutional trend at the time.

It is news to me that N700 million was paid to 223 contractors for store items. Throughout the 16 months during which I served as Head of the Civil Service of the Federation, I largely avoided involvement in procurement issues. The Tenders’ Board handled all issues of procurement and it was chaired by the Permanent Secretary. The only instance I got involved in a procurement was as a result of a direct intervention for the purpose of ensuring a smooth pension process and that particular procurement was less than N80 million.

In its effort to taint my image, the online report further alleged that the sum of N15 billion released by the Federal Government for the settlement of the death benefits of deceased civil servants in July 2010 could not be accounted for, adding that the money was moved to an illegal account in Union Bank and personally operated by our client. The report went on to claim that 58 Bank accounts were opened at my instance between 2009 and 2010 without the knowledge and approval of the Accountant-General of the Federation. To crown it all, it further alleged that “over N54 Billion was transferred to these illegal accounts and eventually withdrawn for undisclosed purposes”.

Again, for the records, the said N15 billion released by the Federal Government was NEVER touched during my tenure as Head of the Civil Service of the Federation because as at the time of my retirement in November 2010, the pension harmonization process had not been concluded.

In fact, the then CBN Deputy Governor (Operations), in response to the enquiry cited in paragraph 13 above, furnished the Office of the Head of the Civil Service with lists of pension accounts maintained with 15 Banks vide letters Ref: GOV/DGO/CON/CBN/01 dated August 25, 26 and 30, 2010 and September 1, 2010. The returns made by the Deposit Money Banks to the CBN at the time indicate that the Office of the Head of the Civil Service of the Federation did not operate up to 58 accounts all of which were opened prior to my assumption of office as Head of the Civil Service of the Federation.

For the records, contrary to the claims contained in the sinister report, the OHCSF during my tenure only operated 17 accounts out of the existing accounts in 12 different banks. These accounts were later consolidated into not more than seven. The assertion in the online report is therefore not tenable.

Furthermore, the OHCSF during my tenure established the electronic Pension Management Platform (EPMS) to check and facilitate transparent pension management. In addition, the office at the time carried out a nation-wide biometric enrolment of pensioners, which involved officials from the Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices and Other Related Offences Commission (ICPC), the Department of State Services and other relevant security agencies. It was this exercise that uncovered the thousands of fake pensioners on the payroll at the time.

Indeed it was during that period that cases of fraud in the administration of pension were uncovered and they were still being investigated as at the time I retired in November 2010. I therefore find it an epic distortion of facts to allege that my tenure was characterised by fraud when what I did was to address the challenge I met on ground.

It is rather telling that in obvious disregard of the facts, the online report was silent on what transpired during the Senate’s Public hearing on alleged fraud in the administration of civil service and police pensions in 2011, during which all those who gave evidence absolved me of any act of complicity.

While I bear no grudge against anyone seeking to probe my tenure as Head of the Civil Service of the Federation or indeed any other position I have held, I find it preposterous for any individual or group of persons to be so hell-bent on maliciously and falsely discrediting my genuine contributions to the development of the country.

It is not far-fetched in the circumstances to observe that the grouse of the sponsors of these false reports against me arose from their resentment to my sincere efforts at reforms that will bring about lasting change to a system that was bedeviled by the flaws I exposed. The Principal actors in the administration of civil service pensions between 2005 and 2010, the period covered by the alleged “audit report” are still alive! It would therefore have made for more balanced reporting if the Premium Times and other newspapers had made efforts to investigate the truth instead of being led blindly to attempt to tarnish a hard-earned reputation.

 

 

For the records, I am a Chartered Accountant with decades of audit experience, a former Permanent Secretary, State House and the Federal Ministry of Finance as well as the Head of the Civil Service of the Federation, and now the Chairman, Financial Action Task Force (FATF). Through my years of practice, I have been guided by my firm belief in due process and accountability.

By normal Federal auditing procedure, where an audit has been carried out, audit observations made are forwarded to the auditee/entity for a comment/response. Ideally, those in office are expected to comment on audit observations regarding an entity. However, if they are unable to comment/respond then the proper procedure is for the observations to be passed on to those that were in the office covered by the audit, provided the persons are alive. I can confirm that no one has reached out to me in that regard.

In the desperate bid to ridicule me, the author of the Premium Times report made a rather uninformed attempt at suggesting that my Chairmanship of the Presidential Committee on Financial Action Task Force (FATF) attracts pecuniary benefits. The records are clear and they confirm that no member receives stipends or sitting allowance. The membership of the Presidential Committee on FATF, which comprises relevant Government agencies, has remained the same since 2004, except in cases where the officers have changed desks.

In the light of the foregoing, I would advise Premium Times and the media houses that published their jaundiced report to desist from reckless and malicious distortion of facts and the making of unfounded allegations designed to tarnish my reputation. I am not unmindful of the consequences of these acts and will take whatever steps may be required in defence of my name.

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CBN’s renewed focus on diaspora remittances: Ki ni big deal? – Toni Kan

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My friend, Paul, is Jamaican. He has a strong Jamaican twang that sometimes leaves me wondering what he is saying.

Paul and I met at our local pub in London and bonded over our mutual love for crossword puzzles. When he was about 12, his mother left Jamaica for the US and Paul’s life changed as he became a “barrel baby”.

The term “barrel children” was coined by Dr. Claudette Crawford-Brown, a lecturer at the University of the West Indies and it refers to children who receive food and clothes and money from parents who have migrated abroad in search of greener pastures.

Psychologists have spoken of the negative effect this can have on “barrel children” who may harbour feelings of abandonment but economists focus on the impact on the Gross Domestic Product (GDP) and wider economy because diaspora remittances from economic migrants are a huge source of economic empowerment for the people and country they leave behind.

In Nigeria we know of children, parents, spouses and sundry family members who make weekly visits to pick up funds sent by loved ones via Western Union or Moneygram.

Diaspora remittances were in focus in the last week of October in Washington as Yemi Cardoso, Governor of the Central Bank of Nigeria made a series of disclosures and announcements on the sidelines of the IMF/World Bank meetings.According to TheCable, Yemi Cardoso announced that the CBN has set a remittance inflow target of $1bn a month.

A few things are worthy of consideration regarding the announcement and disclosure. The volume of remittances has been on the rise since Yemi Cardoso took over at the CBN and implemented a few initiatives. One of which was the granting of approval in principle (AIP) to 14 new and eligible international money transfer operators (IMTOs) to trade on the official foreign exchange (FX) window through the implementation of a willing buyer-willing seller model. This enabled timely access to naira liquidity for IMTOs thereby enhancing liquidity in Nigeria’s FX market.

diaspora remittance inflowIt has had a positive effect because in July the CBN reported that the country had recorded an all-time high of $553m. During the IMF/World Bank meetings the CBN governor announced that remittance inflows surged past $600m.

According to Cardoso, “When I was in Washington for the spring meetings, I called the different IMTOs and…we engaged with them extensively and understood what the problems were. I would say that when we started, the volumes that were going through the remittances were in the region of maybe about $200 million and as at the end of last month, we were almost $600 million.”

It is on the strength of this growth that Yemi Cardoso has set the seemingly high $1bn monthly diaspora remittance target. How realistic is that target and what will it mean for the Nigerian economy?

It is realistic because diaspora remittances have averaged $20bn annually over the past decade and as I noted in an earlier intervention, when the CBN is in the spotlight, discussions almost always resolve to the foreign exchange rate.

The managed float of the naira coupled with other measures introduced by the CBN are having some positive impact seen in the comparative stability of the naira relative to the green back, the checkmating of round tripping, removal of speculative trading and arbitrage and positive contraction in the gulf between the official and parallel market rates.

The CBN governor believes that with the naira competitive Nigerians in the diaspora are now eager and should be encouraged to invest. “Our currency has now become extremely competitive and cheap. So they see the opportunity of taking positions in assets and businesses back home.”

What the CBN governor is alluding to here is that since the dollar can now get more naira for those abroad, the time may be right to set up that water-making factory or agro-product processing plant because aside from oil and remittances and bonds, the country needs return of productive capacity to help buoy the value of the naira.

This case is being made with gusto by the CBN governor and his lieutenants as well as bankers and financial sector stakeholders who have joined the train.

The CBN governor was guest at an event on October 22 on the sidelines of the IMF and World Bank annual meetings in Washington DC. Titled ““Strengthening Ties with Nigerians Abroad” A Conversation with Yemi Cardoso, Governor, Central Bank of Nigeria” it afforded him an opportunity to share ongoing reforms at the apex bank and contextualize the need to change the perspective on remittances from a focus on consumption to investment.

That same message resonated at a forum which held a day earlier in Houston, Texas under the theme “Optimizing Remittances to Nigeria: A Vision for the Future”. The event “brought together members of the Nigerian diaspora, business leaders, investors, and top executives from Nigerian banks to explore strategic pathways for enhancing remittance flows, a vital component of Nigeria’s economic stability and growth.”

To boost remittance flows, enhance diaspora BVN enrolment and facilitate banking transactions in Nigeria for those in the diaspora, the Nigeria Inter-Bank Settlement System (NIBSS) took advantage of the forum to introduce the Non-Resident Bank Verification Number (NRBVN), a new digital platform which simplifies Know Your Customer (KYC) verification for Nigerians in the diaspora and foreign investors.

The message was simple; remittances can be a strategic tool for promoting diaspora-led investments if we pay close attention to the pivotal role the Nigerian diaspora already plays in national development and direct a shift in focus. As Philip Ikeazor, Deputy Governor, Financial System Stability, CBN told his audience “We are looking at remittances going beyond remittances for consumption, but remittances for investment.”

But will $1bn monthly diaspora inflows make much of an impact? The answer is easy. Increased remittance inflows will provide more foreign exchange liquidity which will have a positive impact not just on the dollar supply side but on the overall economy. So, the key is to move from $1bn monthly to more.

19.1%, of their GDP down from 21.57%And to explain this I will return to my Jamaican friend and his country. Jamaica’s foreign exchange earnings come primarily from Tourism, Trade and Remittances. In 2023, remittances accounted for recorded in 2022

5.65% of GDP indicating an increase from 4.26%Nigeria on the other hand earns its foreign exchange mostly from oil. Then we have receipts from the non-oil sector from trade in goods and services, agro products and solid minerals. Oil earnings have dwindled in recent times thanks to a cocktail of issues that do not need elaboration. In 2023, diaspora remittance inflows accounted for recorded in the preceding year.

My focus on Jamaica which has a population of about 3m people may look like the proverbial apples to oranges comparison so let us look at diaspora remittances from the perspective of bigger low- and middle-income countries (LMICs).

World Bank According to 2023 statistics from the “remittances to low-and middle-income countries (LMICs) grew an estimated 3.8% in 2023,” albeit lower than the previous year’s with a total value of “$669 billion.”

The same World Bank report also lists the top 5 remittance recipient countries in 2023 as India ($125 billion), Mexico ($67 billion), China ($50 billion), the Philippines ($40 billion), and Egypt ($24 billion). Nigeria came in at $20.52bn for 2023.

The fact that the announcement was made in America in Houston which boasts the largest Nigerian population in the US is significant because America remains the largest source of diaspora remittances and to put it in perspective; in 2022, of the 4.8 million Indian Americans in America, 3.1 million were immigrants meaning they had ties at home conversely Nigeria had a population of about 712,000 with about 392,811 of those born in Nigeria and with ties to home.

The point of these figures is to show the potential while underlining the fact that diaspora remittances can impact the economy positively when the right environment is created for those who have japa’d to cast their financial gaze home.

The second point is that while Cardoso has set a $1bn remittance inflow target per month there is the feeling that it is a modest target and that the figure would be exceeded if ongoing engagements continue and the measures put in place are sustained.

Migration and Development Brief 39To conclude let us look to a quote by DulipRatha, author of the report to help us understand why the renewed focus on remittances is a big deal.

“Remittances are one of the few sources of private external finance that are expected to continue to grow in the coming decade. They must be leveraged for private capital mobilization to support development finance, especially via diaspora bonds. Remittance flows to developing countries have surpassed the sum of foreign direct investment and official development assistance in recent years, and the gap is increasing.”

***Toni Kan is a PR expert and financial analyst.

 

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FG Terminates Julius Berger’s N740billion Road Contract, Cites Delays, Non-Compliance

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The President Bola Tinubu government has officially terminated the N740billion contract awarded to Julius Berger Nigeria Plc for the rehabilitation of the Abuja-Kaduna section of the Abuja-Kaduna-Zaria-Kano dual carriageway, citing delays and non-compliance with revised terms and scope.

The termination notice was issued by the Federal Ministry of Works in Abuja on November 4, 2024.

 

In a statement released by Mohammed Ahmed, Director of Press and Public Relations for the ministry, the government clarified that the decision stemmed from Julius Berger’s “stoppage of work and refusal to remobilize to site” despite directives to resume operations.

“The Federal Ministry of Works has issued a 14-day Notice of Termination to Messrs Julius Berger (Nig.) Plc for the rehabilitation of Abuja-Kaduna-Zaria-Kano dual carriageway in FCT, Kaduna, and Kano states, contract No.6350, Section I (Abuja-Kaduna),” the statement read.

Ahmed further explained that months of negotiations failed to produce results, leading to the ministry’s decision to end the contract.

 

This follows a series of management meetings within the ministry to address concerns over delays, cost reviews, and incomplete work on the critical northern highway.

The statement read, “The ministry has in the last 13 months been in constant talks with the company, in order to reach an amiable position on the said alignment but to no avail.

“Nigerians may wish to know that the Contract for the Rehabilitation of the Abuja-Kaduna-Zaria-Kano Dual carriageway, which was divided into three (3) Section was awarded to the company on 20th December, 2017and flagged off by the then Minister of Power, Works and Housing, Babatunde Fashola, at an initial sum of N155.748,178,425.50 billion on 18th June, 2018.

Ahmed said, “Sections II (Kaduna – Zaria) and III (Zaria – Kano) were partially completed and handed over during the twilight of the administration of former President Muhammadu Buhari.

“Since then it has been one variation and augmentation or the other and finally, the present minister of works directed the redesigning and re-scoping of the Section I of the contract.

“The alignment was divided into two with one phase redesigned to be on continuously reinforced concrete pavement, CRCP, while the remaining with asphaltic pavement.

“ Approval for Section I, Phase 1 for a length of 38 (thirty-eight) kilometres on the concrete pavement was given to Messrs Dangote Industries (Nig.) Ltd, while the remaining 127 (one hundred and twenty-seven) kilometres remained with the substantive contractor.

He said the Phase 1 was flagged off on October 17, 2024, with a 14-month completion period.

“Due to the stalemate of the contract and, most importantly, the desire of His Excellency, President Bola Ahmed Tinubu, as encapsulated in the Renewed Hope Agenda infrastructure initiative, to see to the completion of this laudable project, also to alleviate the sufferings of Nigerians plying the road, the ministry re-scoped it and got the approval of the Federal Executive Council, FEC.

 

Ahmed explained that the award for the re-scoping and downward review of the contract for the rehabilitation of Abuja-Kaduna-Zaria-Kano Dual Carriageway in FCT, Kaduna and Kano States, Contract No.6350, Section I (Abuja-Kaduna) in favour of Messrs Julius Berger (Nig.) Plc from the sum of N797,263,523,738.87 (seven hundred and ninety-seven billion, two hundred and sixty-three million, five hundred and twenty-three thousand, seven hundred and thirty-eight naira eighty-seven kobo) to N740,797,204,173.25 was granted by FEC on September 23, 2024, and conveyed to the company on October 3, 2024.

 

“As due to the socio-economic importance of the road as a vital artery connecting Abuja, the FCT to the north, the ministry conveyed the approval for a final offer on the Abuja-Kaduna dual carriageway to the company on October 23, 2024, stating that it should agree, in writing, to accept the reviewed contract sum of N740,797,204,173.25 within seven days or risk the termination of the said contract.

“It is a sad commentary on the company that rather than accepting the offer, they tinkered with the bills of quantities, as well as that of engineering measurements and evaluation via a letter to the ministry dated October 29, 2024. The company was summoned for a meeting with the Management of the Ministry, today (yesterday), November 4, 2024, but refused to show up, hence the termination of the contract based on effluxion of time and non- performance,” he added.

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Tinubu Orders Release Of Arrested #EndBadGovernance Minors

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President Bola Ahmed Tinubu has ordered the immediate release of all minors involved in #Endbadgovernance protest who were arrested and arraigned in court by Nigerian police.

Society Repoters reports that he also directed Ministry of Humanitarian Affairs and Poverty Reduction to ensure reunion of the minors with their families.

 

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