Development Report The Welfare of 47 Million Nigerians Hangs in the...

The Welfare of 47 Million Nigerians Hangs in the Balance Due to NDDC’s Mismanagement of 1.53 Trillion Naira

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At least 1.534 trillion naira has been received by the Niger Delta Development Commission (NDDC) since its inception in 2001. This amount was allocated to the NDDC for expenditures on projects to reverse the huge infrastructural deficit in the nine Niger Delta states as a result of decades of government’s neglect and environmental degradation by oil exploration companies. However, the development crises that impact the oil-rich region with an estimated population of 46.8 million people remain unresolved. Expectedly, concerns are growing about the utilisation of the funds accrued to the Commission over the years.

10-Year Revenue of 1.413 trillion naira from 2007-2016

Two reports by the Nigeria Extractive Industries Transparency Initiative (NEITI) covering a period of 10 years have revealed that the Commission received a total of 1.413 trillion naira. The Fiscal Allocation and Statutory Disbursement (FASD) documents reveal that the Commission received a sum of 593.96 billion naira from mineral and non-mineral sources from 2007 to 2011, and also received 819.81 billion naira between 2012 to 2016. These, ten years (2007-2016) summed up to 1,413.77 billion naira (or 1.413 trillion naira).

10-Year Expenditure of 3.03 trillion naira from 2007-2016

For expenditure in the same 10-year period, the reported value is 961.94 billion naira from 2007-2011, in addition to 932.632 billion naira and 6.107 billion dollars spent between 2012 to 2016. For the latter 5-year period, the 6.107 billion expenditure in US dollars was converted to Naira at a conservative average of N186/$1 for the 5-year period. This gave a Naira exchange value of 1,136 billion naira, which was added to the 932,632 billion naira reported, to arrive at the 2,068 billion naira for the period of 2012 to 2016. Hence, DATAPHYTE’s conservative estimate for the total expenditure for the ten years is computed to be 3,030.57 billion naira (or 3.03 trillion naira).

10-Year Expenditure surpasses Revenue in the same period (2007-2016)

Following this computation, we tried to calculate the difference between revenue and expenditure for the 10 year period, we got a negative difference of 1,616.80 billion naira (i.e N3030.57 billion minus N1413.77 billion). This is shown below:

Period Revenue (N’Bn) Expenditure (N’Bn) Source
2001 – 2004 121.05             ?? NDRMP
2007 – 2011 593.96 961.94 FASD
2012 – 2016 819.81 2,068.63 FASD
Total (2007 to 2016) 1,413.77 3,030.57
Total (2001 to 2016) less 2005-2006 1,534.823

It is also surprising to find out from the recently constituted interim management of the Commission that the pending NDDC Interim Payment Certificates are worth over 3 trillion naira. That is, “what the NDDC owes these phantom contractors”.

This suggests one of two things: that NDDC is deliberately running a deficit budget OR the Commission has not done full disclosure of its revenue to NEITI auditors and the undisclosed amount is over 3 trillion naira. The latter seems more plausible considering a PREMIUM TIMES report that Igo Weli, the General Manager of Shell Petroleum Development Company of Nigeria (SPDC) disclosed his company and its partners have remitted about $2 billion to the Niger Delta Development Commission (NDDC) in 16 years. If only SPDC remitted about $2 billion, there is a high potential, ten of billions of dollars have accrued to NDDC from the remittances of other big oil and gas companies institutions.

Revenue from Inception in 2001 to 2016 (less 2005 and 2006)

In accounting for the NDDC’s revenue from inception in 2001, there were six years of revenue (2001-2006) that were not captured in the 2007-2011 FASD report. However, DATAPHYTE found a revenue of 121.05 billion naira that the Commission received between 2001 – 2004. The data as reported in Chapter 6 of the Niger Delta Regional Development Master Plan (NDRMP) showed that NDDC received a total of $1billion ($1,000,768,000) between 2001 and 2004. At a moderate average exchange rate put at N120/$1 during the period, this amounts to 121.05 billion naira as accrued revenue between 2001 and 2004.

When this 121.05 billion naira revenue figure is added to the receipts (1.413 trillion naira) reported by NEITI for 2007 to 2016, the total from 2001 to 2016 totalled 1.534 trillion naira. It should be noted that the revenue received by NDDC between 2005 and 2006 is not included because the data could not be accessed at the time of this report.

Given this, we found that less or more of 1,495.75 billion naira of revenue is still unknown following the NEITI audit report.

Tales of Duplication, Ongoing and Uncompleted Projects

Since the Commission was established, a series of projects have been initiated within the region. These projects are development interventions in Education, health, provision of potable water, electrification, road infrastructures, environment and waste management, security, skill acquisition and youth development, and agricultural development programmes, among others.

With thousands of these projects rolled out every year across the nine states, various media reports have chronicled how tons of the projects are abandoned or never implemented. For instance, investigations published by PREMIUM TIMES and linked here exposed how contracted projects are fake, become dumpsitesor not foundEven a 3 billion naira worth of Shoreline Protection Contract project failed and 600 projects worth over 200 billion naira revoked

Below is a graphical illustration of its expenditure from 2012 to 2016 in NGN Millions.

Source:  FASD Summary Report 2012 – 2016

Also, according to the audit report of the Fiscal Allocation and Statutory Disbursement (FASD) of the Federal Government, the sum of 7.442 billion naira was grossly mismanaged within the five-year period.

A report from the NEITI revealed that the Niger Delta Development Commission (NDDC) has been inefficient in empowering the community through its projects and programs as projects worth over 1.24 billion naira (N1,248,911,325) were unutilized and gross mismanagement of funds in tune of 7.44 billion naira unaccounted for.

Key findings showed that a total of 22 projects were duplicated in the project schedule with a total contract sum of N1.18billion, mobilization payments of N370.70million, interim payment certificates (IPC) issued to the tune of N156.81million and mobilization recovered on IPC’s of N93.09 million.

Likewise, it was observed that substantial work has not been carried out in a significant number of projects even though mobilization has been paid.

“For instance based on the review from this audit, projects with a contract sum of 284.884 billion naira and mobilisation or advance payments of 63.558 billion naira was made but was not certified for work done on the established milestones or progression and therefore no interim payment certificate (IPC) had been issued.”

Inefficient Utilization and Mismanagement of Funds by NDDC

NEITI’s report also lamented how NGN1,248,911,325 being spent on projects without utilization which amounts to waste until these facilities are used and NGN7.442 billion being mismanaged. Despite the huge amount spent on various projects of which some have been completed and commissioned, they are however not been put into effective use to the benefit of the communities. Such projects include:

  • Construction of Nigerian Police Barracks (Special Protection Unit – Base 6 Block of flats, Block A)
  • Construction of admin block, commander’s residence, service block and Gatehouse with a contract sum of N249,910,500.
  • Construction of Nigerian Police Barracks (Special Protection Unit – Base 6) LOT 3:
  • Construction of Block of Flats/Residential Quarters (Block B) in Port Harcourt, Rivers State with a contact sum of N249,750,000.
  • Construction of mobile Police Barracks (Special Protection Unit – Base 6), LOT 6, – General External Works, Port Harcourt with a contact sum of N249,750,825.
  • Construction of Nigeria Police Barracks – Base 6 LOT 4: Construction of Block of flats/Residential Quarters (Block A) in Port Harcourt with a contact sum of N249,750,000
  • Construction of Nigeria Police Barracks – Base 6 LOT 2: Construction of Block of flats/Residential Quarters (Block A) in Port Harcourt with a contact sum of N249,750,000
  • The supply of whole-body X-ray scanner, Baggage and parcel scanner, including walkie talkies with Base station and mobile repeaters to Uesiri Security Services Ltd. A project meant to be for the whole community but done for a single company
  • It was also observed that there was a general allocation of NGN7.442 billion to the nine state-offices of the Commission for the completion of small-ticket projects which were neither identifiable nor scheduled for monitoring and proper management.

All these sum up to over NGN1,248,911,325 being spent on projects without utilization which amounts to a waste until these facilities are used and NGN7.442 billion being mismanaged.

Food for thought

The roving thought for us is why it is difficult to nip this incessant corruption in the bud and it is allowed to continue barely checked for sixteen years. More troubling for our democracy and economy is why government agencies saddled with the provision of intervention projects have little or no process of scrutiny.

We fear, then, and sound a warning about the North-East Development Commission that is being instituted with billions already earmarked for various intervention projects without proper data on different dimensions of the problem.

Closely related to this is the incapacitation of the Bureau of Public Procurement to properly scrutinize public contracting process across MDAs and to sanction projects being implemented all over the country.

Overall, the inadequacies of Federal government anti-corruption and accountability institutions beckons the National Assembly and States’ House of Assembly to reconsider what federalising these institutions means against independent structures at the state level.

 

Editor’s Note: This report has been updated to show the correct expenditure between 2007 and 2011 was N961.94 billion, not N459.24 billion as earlier reported

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