NEMA: Reps indict Osinbajo in N5.8bn North East, IDPs Intervention Fund [Full report]

The House of Representatives has accused Vice President Yemi Osinbajo
of illegally approving the release of the sum of N5, 865, 671, 939.26
in June 2017 from the Consolidated Revenue Fund Account to the
National Emergency Management Agency (NEMA).
This was contained in a report released on Thursday by the House
Committee on NEMA.

The report, whose recommendations were based on findings from a
thorough investigation by the Hon Ali Isa J.C House Committee on
Emergency and Disaster Preparedness, was adopted by the lawmakers.

The House noted that the authorisation of the release of the fund for
emergency food intervention of food security in the North East
contravenes Section 80(4) of the 1999 Constitution as amended states
that, "No money shall be withdrawn from the Consolidated Revenue Fund
or any other public fund of the federation, except in the manner
prescribed by the National Assembly".

Similarly, it also breached the provision that the National Assembly
must approve all issuance of Euro Bond from which the minister of
Finance and the Accountant General of the Federation directed the
Central Bank of Nigeria to pay from.

The funds were paid as follows for supply of food items: Dangote Rice
Ltd N936, 196, 800; Golden Agric Input Ltd N1, 384, 554, 236; BUA Rice
Ltd N1, 322, 273, 520; WACOT Ltd N453, 674, 296; WACOT Ltd N939, 946,
089; NEMA N829, 026, 456.

The lawmakers agreed that the authorization granted for the withdrawal
of such huge sum of money from the Consolidated Revenue Fund Account
was highly flawed and had infractions on Section 80(2) of the
Constitution and Section (2) of the Procurement Act, as well as
provisions of the Appropriation Act, did not follow due process as
taxes and interest accruable to the government were not deducted or
remitted to FIRS and no meeting held by the Federal Executive Council
to approve the contracts.

Furthermore, the funds were credited directly to the individual banks
of the companies and NEMA bank account, a violation of the approval
limit allowed by law. Out of the N5.8 billion, NEMA got N829, 026, 456
for logistics and claimed it spent N369.5 million on general
logistics, N189 million on branding and packaging, N248.6 million on
branding and packaging and N21.9 million on contingency.

They, therefore, called for the dismissal and prosecution of the
director general of NEMA, Engr Mustapha Maihaja over fraud, corruption
and embezzlement of N33 billion Emergency Intervention Fund, as well
as all the government officials involved in the approval, processing,
release and diversion of the fund; that the Central Bank of Nigeria,
being a banker to the federal government should not have been involved
in giving loans to private companies and as such, ahould be
investigated for the N2 billion loan said to have been given to four
named companies.

The Committee's investigation into Breach of Trust In NEMA covered the
following aspects:

(1) Release of N5, 865, 671, 389 and N3, 153, 000, 000. 00 emergency
food intervention of food security in the North East in 2017 (2)6, 779
metric tonnes of rice donated by the Chinese government to IDPs in the
North East (3)Payment of about N800 million demurrage on the donated
rice (4) over 10 billion naira, being 20 percent statutory ecological
funds released between January 2017 to February 2018 to NEMA
(5)Federal Government's N1, 600, 000, 000to 16 states in July 2017 for
Flood intervention(6) Over N1.6 billion released to NEMA for
evacuation of Nigerians stranded in Libya in 2017 and other ancilliary
issues; N33 billion naira was lost by the federal government due to
Maihaja's mismanagement and outright embezzlement of funds. The House,
therefore, asked President Muhammadu Buhari to relieve the director
general of NEMA of his duties and hand him over to relevant
authorities for prosecution.

They also called on the relevant agencies to conduct further
investigation on NEMA, Ministry of Agriculture and Ministry of Budget
and National Planning in order for them to account for the 6, 779
metric tonnes of rice donated by the Chinese government for the
benefit of IDPs in Nigeria but was never received by the beneficiaries
and prosecute all found wanting, recover the multiple transaction of
N800 million demurrage from the ministry of Budget and National
Planning, Ministry of Agriculture and NEMA and that the six staff of
NEMA who were suspended for their testimonies before the investigative
committee be reinstated.

On the issue of receipt and utilisation ofN1.6 billion for flood
victims in 16 states, the House Condemned the display of insensitivity
to the plight of flood victims showed by NEMA management in the
handling of the relief materials and called on ICPC and EFCC to
further investigate the matter and recover the sum of N700m from the
director general of NEMA, who is the accounting officer of the agency.

See full report as adopted by the House below:

REPORT OF INVESTIGATIVE HEARING ON THE VIOLATION OF PUBLIC TRUST IN
THE NATIONAL EMERGENCY MANAGEMENT AGENCY (NEMA) SUBMITTED BY THE HOUSE
COMMITTEE ON EMERGENCY AND DISASTER PREPAREDNESS. HR 52/2018

1.0 PREAMBLE

The House of Representatives in Plenary on Thursday, 15th February,
2018, mandated the Committee on Emergency and Disaster Preparedness to
investigate the alleged "Violation of Public Trust in National
Emergency Management Agency (NEMA)" and report back to it for further
legislative consideration.

In furtherance to the above Resolution contained in the Votes and
Proceedings of the House, dated 15th February, 2018, the Committee
adopted the following terms of reference to determine the propriety or
otherwise of the transactions undertaken and expenditures incurred in
the following areas of concern by management of NEMA.

(i) The release of N5,865,671,389.26 and N3,153,000,000.00 as
emergency intervention of Food Security to support the population
affected by insurgency in the North-East in June 2017 and other
releases for the North-East intervention;

(ii) The 6,779 metric tons of rice donated by Chinese government to
the internally displaced persons in the North-East;

(iii) Payment of about N800 Million Demurrage on the donated Rice by
the Chinese government;

(iiii) Over 10 Billion Naira being statutory 20% Ecological Funds
released between January 2017 to February 2018 to NEMA;

(v) The Federal Government of Nigeria Flood Intervention in the sum of
N1,600,000,000.00 to 16 States in July 2017;

(vi) The over N1.6 Billion released to NEMA for Evacuation of
Nigerians stranded in Libya in 2017; and

(vii) Other ancillary issues.

2.0 MODUS OPERANDI

The Committee took the following legislative measures in the course of
discharging this assignment:-

(i) The Committee held number of meetings to determine its modus operandi;

(ii) Letters were written to critical stakeholders to elicit their
views on the issue under investigation;

(iii) Committee placed adverts in both Print and Electronic Media
soliciting for memorandum and sensitizing the Public and stakeholders
to the Public Hearing to ensure overall success of the investigation;

(iiii) All submissions/documents received at the hearing were
objectively scrutinized and analysed for informed findings and
recommendations to the House for adoption.

3.0 INVESTIGATIVE PUBLIC HEARING

The Committee conducted investigative hearing on the matter. The
well-attended hearing was officially declared open on Wednesday, 21st
March, 2018, by His Excellency, the Honourable Speaker of the House of
Representatives, Rt. Hon. Yakubu Dogara who was represented by the
House Leader, Rt. Hon. Femi Gbajabiamila. The Committee conducted the
investigation over a period of three months in 11 Public Sitting with
various stakeholders.

Invited stakeholders who made presentations at the hearing were from:

(i) The National Emergency Management Agency (NEMA)

(ii) Office of the Accountant General of the Federation

(iii) Federal Ministry of Finance

(iiii) Central Bank of Nigeria

(v) Federal Ministry of Budget and National Planning

(vi) Federal Ministry of Agriculture

(vii) Economic and Financial Crimes Commission

(viii) Governing Council of NEMA

(ix) Contractors: –

– Dangote Rice Ltd

– BUA

– WACOT

– Golden Agric Input Ltd.

– Olam Nig. Ltd.

– 3 Brothers Nig. Ltd.

(x) Office of Head of Service of the Federation

(xi) The Nigeria Customs Service

(xii) Nigeria Port Authority

(xiii) MAESK Line Clearing and Forwarding Agents & Transporters

(xiiii) APMT & Maresk Line Clearing Agents & Transporter

(xv) SEMA (16 states affected by the flood and 5 out of the 6 states
of the North East).

(xvi) CAC

(xvii) PENCOM

(xviii) FIRS

(xix) ITF

(xx) NSITF

4.0 ANALYSIS OF THE SUBMISSIONS

5.0 OBSERVATIONS/FINDINGS

A. DONATION OF 6,779 METRIC TONS OF RICE BY CHINESE GOVERNMENT FOR
IDP'S IN THE NORTH EAST.

Committee appraised the submissions made by stakeholders involved in
the matter and observed as follows:

– That the Chinese government donated and shipped a total of 6,779
metric tons of rice, that is 271 trucks and approximately 162,696 bags
of rice into the country's seaport in June 2017 meant for distribution
to IDPs in the North-East as food assistance.

– That the government Agencies namely – Ministry of Budget and
National Planning, Ministry of Agriculture, Ministry of Finance and
NEMA were charged with different responsibilities of receiving,
clearing, storage, transportation and distribution of the consignments
to the IDP's in the North East.

– That more than one year after the goods were donated, there is
no evidence that the 6 States of the North East, who are the
beneficiaries have received the items.

– Evaluation of the correspondences by the Chinese government on the
free donation of the items and responses by the Federal government
Agencies confirmed that there was adequate information on the
donation, as an Memorandum of Understanding (MOU) was entered into by
all the parties indicating the role to be played by each Agency. But
the rice could not be evacuated over long period of time at the
seaport despite written letters by Chinese Government to Ministry of
Budget and National Planning after an import waiver had been obtained
from Ministry of Finance, informing the Nigerian authorities of the
consequences of the delay in clearing the items.

– The Federal Government paid about N800 Million as demurrage to APM
terminal and Maersk Line for the consignment due to delay arising from
inability and negligence on part of NEMA, Ministry of Agriculture,
Ministry of Finance and Ministry of Budget and National Planning to
secure the items as at when due.

– APM Terminal provided invoices on the demurrage showing payment
by Ministry of Agriculture but NEMA testified it made the payment.
NEMA could not however, provide before the Committee evidence of
payment to APM terminal but the payment reflected in their account
book.

– Ministry of Budget and National Planning was to provide the
funding for the clearing, transportation of the rice, handling and
logistic charges as agreed in the Memorandum of Understanding signed
by the Government Agencies.

– Ministry of Agriculture was responsible for providing silos for
the storage of the rice.

– The Ministry of Agriculture confirmed to the Committee that no
single bag of the consignments was delivered and received from NEMA as
at the time of this report.

– Global View Logistics Ltd and Baltic Air and Maritime Services
Ltd engaged to clear the rice were not registered contractors with
NEMA, the Companies were equally not registered with ITF, NSITF, and
PENCOM, as required by existing law, practice and Regulations.

– National Emergency Management Agency (NEMA) was saddled with the
responsibility of delivering the consignments to different designated
silos and to distribute all the 6779 metric tons of the Chinese rice
to the IDPs within the 6 States in the North-East in the following
proportion:
S/No States Percentage and Tons Equivalence in Trucks
1 Borno 35% = 2,372.7 M/Tons 79.09 Trucks
2 Yobe 20% = 1355.8 M/Tons 45.1 Trucks
3 Adamawa 15% = 1016.85 M/Tons 33.89 Trucks
4 Gombe 10% = 677.9 M/Tons 22.5 Trucks
5 Bauchi 5% = 339 M/Tons 11.3 Trucks
6 Taraba 5% = 399 M/Tons 11.3 Trucks
7 Kwali FCT 10% = 677.9 M/Tons 22.5 Trucks
TOTAL 225.5 Trucks

Ministry of Finance provided Certificate for Import tax waiver with
tax deduction on the consignments donated to Nigeria by Chinese
government

The 5 State governments in the North-East except Borno State who did
not appear before Committee, denied receiving any single bag of rice
from the consignment purported to have been delivered and distributed
to the IDPs by NEMA.

– Due to the testimony of the Director of Finance and Accounts (DFA)
and some staff of NEMA on payment of demurrage which the management
was not comfortable with, NEMA management hurriedly convened a
Governing Council meeting of NEMA for the first time in 3 years where
it took a decision to suspend the Director of Finance and 5 other
staff of the Agency without due process and in flagrant violation of
the principle of fair hearing as guaranteed under Section 36 of the
1999 Constitution as amended.

– The suspension took place on 2nd April, 2018 which was the date of
the inauguration of the Council Members by the Vice President. This
was done within the period of investigation by the Committee, and
intended to jeopardise and obstruct the work of the Committee.

B. RECEIPT AND UTILIZATION OF N1.6BILLION FOR FLOOD VICTIMS IN 16 STATES

FINDINGS:

– NEMA confirmed receiving the sum of N1.6 Billion released to it
by the Federal Government as Intervention Fund to purchase food items
and other relief materials for distribution to all the 16 States which
was affected by the flood disaster in June 2017. The States are:
Lagos, Oyo, Edo, Kwara, Ebonyi, Niger, Ekiti, Kebbi, Akwa Ibom,
Plateau, Sokoto, Bayelsa, Enugu, Ondo, Abia State and FCT

– The ratio of distribution of the fund for each State is N100,000,000.00.

– The Committee further confirmed that 11 of the States received
relief items worth less than N50,000,000.00 each while 5 States
received items worth N70,000,000.00 each from NEMA and only received
the items in March 2018 when the investigative hearing commenced.

– The relief materials released was an afterthought and not
intended to salvage the situation as the disbursement happened 9
months after the flood disaster. Thereby defeating the emergency
purpose for which it was meant.

– NEMA could only account for the disbursement of N900 Million to
the Sixteen States. The balance of N700 Million could not be
accounted for.

C. FUNDS RELEASED FOR EMERGENCY INTERVENTION OF FOOD SECURITY IN THE NORTH-EAST

FINDINGS:

– On the emergency intervention of food security to the North-East
to support the population ravaged by insurgency, a sum of
N5,865,671,939.26 was approved and released in June 2017 vide a memo
raised from the Office of the Acting President, directing the Hon.
Minister of Finance and the Accountant General of the Federation to so
act.

The details further specified a directive to the Governor of CBN from
the Ministry of Finance to pay the sum from theConsolidated Revenue
Fund Account which the AGF is to raise a mandate for.This is in
contravention of approval of NASS on the issuance of Euro Bond from
which the Hon. Minister authorized the payment. The Euro Bond is for
specified infrastructural projects and not for discretionary
intervention.

Furthermore, there is no specific appropriation by the National Assembly.

This contravenes Section 80 (4) of the 1999 constitution as amended:
which states:

"No money shall be withdrawn from the Consolidated Revenue Fund or any
other public fund of the Federation, except in the manner prescribed
by the National Assembly".

The money was paid to the following companies for supply of food items
to the North East:-

1. Dangote Rice Ltd. = N936,196,800.00

2. Golden Agric Input Ltd. = N1,384,554,236.26

3. BUA Rice Ltd. = N1,322,273,520.00

4. WACOT Ltd. = N453,674,296.00

5. WACOT Ltd = N939,946,089.00

6. NEMA = N829,026,456.00

= N5,865,671,389.26

– Committee noted the flaws and infractions on the authorization
granted and removal of such huge sum of money from the Consolidated
Revenue Fund Account of the Federation in violation of section 80(2)
of the Constitution, Section 16(2) of the Procurement Act and
provisions of the Appropriation Act as approval of the Legislature was
not sought nor obtained for such expenditure.

– Due process was not followed as taxes and interest accruable to
government were not deducted and remitted to the FIRS on the sums
released and paid into the accounts of the different corporate
entities shown above, this created colossal loss of revenue to the
Federal Government.

No meeting of the Federal Executive Council was held approving the
contracts to the named companies and the release and crediting of the
funds directly into the individual companies and NEMA bank account in
blatant violation of approval limit allowed by law.

– It was revealed in the Public Hearing testimonies that Dangote
Rice Ltd, WACOT Ltd, BUA Rice Ltd and Golden Agric Input Ltd had
earlier received N2billion each from CBN as loan to mop up grains
across the country.

– All the 6 States of the North East denied ever receiving this
emergency intervention for food security in the North East for which
about N5.8b was expended by the Federal Government.

– Out of about N5.8Billion. NEMA got N829,026,456 for logistics and
it claimed it spent it as follows, without satisfactory evidence:

(i) General Logistic N369.5 million

(ii) Branding and packaging N189.00 million

(iii) Others (Marketing, Security, tracking and media) N248.6 million

(iiii) Contingency N21.9 million

D. RELEASE OF N3,153,000,000.00 TO NEMA FOR FOOD INTERVENTION TO THE NORTH-EAST

FINDING:

– The Committee noted that NEMA released 2.4 Billion Naira to Olam
Nigeria Limited to supply 8,000 metric tons of rice, gave 3 Brother
Rice MillLimited the contract to supply 2,000 metric tons of rice at
N600,000,000 and N153,160,000 for logistics and transportation of the
items, all totaling N3,153,000,000.00.

– Committee observed that OlamNigeria Limited and 3 Brother Rice
MillLimited were contacted verbally by Ministry of Agriculture to go
to NEMA for the jobs without due process.

– The contract award letters issued toOlam Nigeria Limited and 3
Brothers Rice Ltd were all signed by the Ag. Director of Relief and
Rehabilitation and not by Director of Procurement in contravention of
Public Procurement Act.

– The same Ag. Director of Relief and Rehabilitation who was saddled
with the responsibilities of receiving the items and distributing
them, signed the award letters without the knowledge of the
Procurement Department. This is tantamount to breach of the
Procurement Act.

– Evidence before the Committee showed that the World Food Programme
(WFP) sought to import and supply 5000 metric tons of rice to the
North East, at the rate of N11,500 per bag which is cheaper than the
N15,000 per bag offered by local Nigerian millers. However, the
Committees findings indicate that the concerned Federal Government
agencies namely Federal Ministry of Agriculture and NEMA offered to
subsidise the purchase locally, at the same rate of N11,500 to World
Food Programme to discourage importation and encourage local
production.

– NEMA now claimed to have donated the 5000 metric tons of rice to WFP
instead of allowing WFP to purchase same and distribute to the North
East. There is no evidence that the WFP received the 5000 metric tons
as donation from NEMA, as the approval of N3.1billion was for NEMA to
purchase the rice and distribute same to the victims of insurgency in
the North East, as WFP did not provide the Committee with such
evidence after repeated requests.

– Both companies, Olam Nigeria Ltd and 3 Brothers Rice Mill Ltd, were
illegally contracted to carry out the supplies as their profiles
showed that they had no PENCOM, FIRS, ITF and NSITF Clearance
Certificates in compliance to Section 16 of the Public Procurement
Act.

– The data of 3 Brothers Rice Ltd sighted by the Committee did not
tally with registration name "Three Brothers Rice Mill Ltd" approved
by Corporate Affairs Commission which means NEMA gave contract to a
non-existent entity.

Therefore the contract awarded to both Olam and 3 Brothers were in
violation of the Procurement Act.

E. EVACUATION OF NIGERIANS FROM LIBYA

FINDINGS

– Committee confirmed that the sum of N1.6Billion was released to NEMA
for the evacuation of Nigerians stranded in Libya in year 2017.

– The Committee also discovered that contract awarded under this
exercise were inflated.

– In the course of the investigations, the Director-General of NEMA,
Eng. Mustapha Yunusa Maihaja, gives account of expenditure as the
N1.6Billion to include evacuations, security personnel logistics and
local transport.

F. UNACCOUNTED N17,889,050,401 RELEASED FROM ECOLOGICAL FUND TO NEMA

FINDINGS

– The Committee established that 20% of the Statutory Ecological funds
are released to the National Emergency Management Agency on monthly
basis. This is in compliance with Section 13(2B) of the NEMA Act.

– It was discovered that from January 2017 to May 2018 the total
amount released and or received by NEMA is to the tune of N17Billion.

– Furthermore, NEMA incurs expenditure from the fund without going
through statutory appropriation approval from the Legislative Arm of
Government.

– The Committee noted that the failure of the Governing Council of
NEMA to forward the details of the amount released to it to the
National Assembly for Appropriation, consideration by the Legislature
and passage is a gross violation of the provisions of the
Constitution.

– Due process was also not followed by NEMA on the contract sums as
the Director General exceeded his approval threshold for both capital
and recurrent expenditure. Withholding and Value Added Taxes accruable
to government for contracts executed were not remitted to FIRS; thus,
resulting to loss of revenue by Government in violation of Section 16
(1&2) of National Emergency Management Act CAP N34 LFN 2004.

6. RECOMMENDATIONS:

1. On the issue of donation of 6,779 metric tons of rice by Chinese
Government for IDP's in the North East, the Committee recommends as
follows:

(i.) that the House condemns in strong terms the negligence and
inefficiency of the Ministry of Budget and National Planning and
National Emergency Management Agency (NEMA) for the long delay in
collection of the donated rice from the Port Terminal.

(ii) that NEMA and the Federal Ministry of Agriculture, Ministry of
Budget and National Planning should account for the 6,779 Metric tons
of Rice donated to Nigeria Government for the benefit of IDP's in the
6 States of the North East by the Chinese Government but was never
received by the beneficiaries. The ICPC, EFCC and Nigeria Police Force
(Police) should conduct further investigation and prosecute where
necessary.

(iii) that the ICPC, EFCC and Police should ensure recovery of the
payment of about N800m demurrage from the concerned officers of the
Ministry of Budget and National Planning, Ministry of Agriculture and
NEMA. They should further investigate the conflicting testimonies of
the above agencies and determine whether there was multiple payment
transaction for the demurrage.

(iv) that the suspension of six staff of NEMA by its management is an
abuse of power, against the extant public service rules and a gross
violation of Section 36 of the 1999 Constitution as amended. It is
also a privileged communication under the Legislative Houses (Powers
and Privileges) Act, any person that obstructs a witness before a
legislative House is also guilty of contempt of parliament.

(v) It is therefore hereby recommended that the affected staff below
be immediately re-instated by NEMA and the appropriate authorities and
all their arrears of entitlements paid. They are:

1. Mr. Akinbola Hakeem – Director, Finance and Accounts

2. Alhassan Nuhu – Director Disaster & Risk Reduction

3. Mr. Emenike Umesi – Ag. Director, Special Duties

4. Mohammed Kanar – Deputy Director Welfare

5. Mr. Mamman Ibrahim – DD Captain of the Air Ambulance

6. Yunusa Deji Ganiyu – Asst. Chief Administrative Officer

2. On the issue of receipt and utilization of N1.6 billion for flood
victims in 16 states, the Committee recommends;

(i.) that the House condemns in its entirety the display of
insensitivity to the plight of flood victims showed by NEMA management
in the handling of the relief materials.

(ii) that the ICPC and EFCC should further investigate the matter
and recover the sum of N700m from the Director-General of NEMA, Engr.
Mustapha Yunusa Maihaja.
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