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INVESTIGATION: Akwa Ibom Governor, SSG in Multi Billion Naira Scandal

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This investigation is supported by the John D. and Catherine T. MacArthur Foundation and the International Centre for Investigative Reporting

Akwa Ibom state government spent N4.86 billion on cars in 2019.

 

INVESTIGATION: Akwa Ibom Governor, SSG in Multi Billion Naira Scandal
THE Akwa Ibom State government this year released the Account General’s annual report and audited financial statements for 2019. A careful analysis of the report reveals that the offices of the State Governor and the Secretary to the State Government approved several questionable and extra-budgetary expenses in 2019. These bizarre expenses spent on cars, aircraft maintenance, fuel, government special projects and governor’s hospitality exceed N10 billion.

N4.864 billion spent on cars

The report reveals that the office of the SSG purchased 15 new Toyota Prado Jeeps (TXL) for the sum of N4.864 billion, though the approved budget for that item was N738 million. So an extra N4.126 billion was posted for the purchase of these cars.

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The figures in the financial report, imply that the unit cost for one Toyota Prado Jeep (TXL) is more than N324 million. But a market price survey conducted in October 2020 by our reporters showed that the current unit price of the car is N34 million. Cheki cars, a reputable car company in Lagos, said 15 new Toyota Prado Jeep (TXL) would be sold for N510 million only, which is N228 million less than the original amount approved for the vehicles.

Even with a mark up of 20 per cent profit for the supplier of the vehicles, they should not have cost more than N612 million.

Through a Freedom of Information (FOI) request, our reporter sought information from the office of the Secretary to the State Government, Dr Emmanuel Ekuwem, on the purchase of the 15 number Toyota Prado Jeeps. Ekuwem did not respond to the request sent to his office on 24th September 2020 and the follow- up reminder sent to him two weeks later.

N5.04 billion spent on maintenance of state aircraft

A big recurrent expenditure item in the 2019 financial report under the SSG’s office is the maintenance of the state aircraft. The House of Assembly approved N2.5 billion for this item in 2019 but the SSG’s office spent N5.04 billion on the maintenance of one aircraft, a Bombardier Global 5000, which is used exclusively by the governor and the first family.

Akwa Ibom state government spent N4.86 billion on cars in 2019–2

 

According to Liberty Jet, a New York-based airline operator, the annual cost of flying and maintaining a Bombardier Global 5000 for 400 hours a year is approximately $2,272,015, N693.88 million, at the exchange rate of N305/$1 in 2019.

Also, an aviation cost evaluation company, Aircraft Cost Calculator, puts the cost of flying and maintaining a Bombardier Global 5000, at $2,525,902 (N770.4 million) at 450 hours per year.
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Expenses incurred by the state on the maintenance of the aircraft have outraged Akwa Ibom indigenes, Civil Society and Civil Liberties Organizations.

At one point, Senator Ita Enang, currently serving as Senior Special Assistant on Niger Delta Affairs to President Buhari, called on the state government to sell the aircraft and invest the money in education and agriculture.

Arc Ezekiel Nya-Etok, a respected politician and advocate of good governance, advised the state government to push the state aircraft into the fleet of Ibom Air, Akwa Ibom State-owned airline, for chartered services to help the state get economic value from it.

The state government keeps posting fees for maintenance and repairs of the state aircraft, even as information on the company maintaining the aircraft remained a top secret.

After spending a month scouting for leads on the company in-charge of the maintenance and repairs of the state aircraft, our reporters through a critical source outside the state got briefs that CAMOSA (Continued Airworthiness Maintenance Organization), an aviation consultant based in Centurion, Gauteng, South Africa, was in-charge of the maintenance of the aircraft.

Checks on the company at the Corporate Affairs Commission, CAC, and the Federal Inland Revenue Service, FIRS, show that CAMOSA was registered to do business in Nigeria in December 2019, with the name “CAMOSA Projects Limited”. The company’s address on the CAC and FIRS is Udo Udoma Avenue (House number withheld).

After a long search for the company’s address in Uyo, it was discovered that the company has been operating surreptitiously from a property allegedly owned by the Akwa Ibom State Commissioner for Special Duties and Aviation Development, Mr Okpolpum Etteh.

During a physical check at the address, there was no signboard or any other proof that the company occupies the flat, instead, another company linked to Etteh, had small signage on the door to the flat.

A critical source who spoke about the operations of the company, told our reporters, that CAMOSA Projects Limited only “squatted a while in the facility and used the address to formalize their registration but had moved out to a new office in Shelter Afrique.” Shelter Afrique is a high-brow, government-owned residential estate in Akwa Ibom State where top government functionaries live.

Investigations revealed that CAMOSA has been in charge of the maintenance of the Akwa Ibom state aircraft since Mr Udom Emmanuel came on board as governor in 2015, but the company got registered in Nigeria with the CAC on 4th December 2019 with registration number 1638800.

Our findings suggest that the aviation service company with unconfirmed links to Governor Emmanuel has not paid relevant tax to the state government as the company is not on the taxpayers’ database of the state.

The Akwa Ibom State government under Governor Emmanuel has been unrelenting in its clampdown on companies that evade taxes, with AKIRS recently sealing up some companies that defaulted in tax payment.

It was further gathered within the state civil service that the office of the governor now handles matters concerning aviation development.

“The Aviation Development arm of the Ministry of Special Duties and Aviation Development only exist in the name”, a senior civil servant in the Ministry who cannot be named in this report because civil service rules forbid a civil servant from speaking to journalists, said.

According to him, “Since the current state exco was inaugurated after the 2019 election, aviation matters have been taken away from the Ministry of Special Duties. Aviation development is handled under the office of the governor. That is why we now have the Managing Director and CEO of the Victor Attah International Airport, Mr Uwem Ekanem, serving as Senior Special Assistant (Aviation Development) to the governor.

“What the Ministry does is only supervisory. We supervise jobs in the aviation sector after they are awarded by the Governor but we do not have any hand in anything happening at the airport.”

The Commissioner for Special Duties and Aviation Development, Mr Okpolupum Etteh, avoided making comments on this when he was reached on phone.

He did not respond to phone calls and SMS sent to him. One of Etteh’s aide whom he directed to meet with these reporters said the Commissioner has seen the SMS and will speak to us over one of the weekends. However, he did not keep the appointment and did not respond to further phone calls.

Interestingly, expenses on the maintenance of the Akwa Ibom State aircraft in 2019 alone (N5.04 billion) are over three times more than the amount of 1.4 billion approved for the maintenance of 10 aircraft in the presidential fleet for the same year. Even the N2.5 billion originally approved by the state assembly for the maintenance of the aircraft more than doubles what was budgeted for maintaining the ten aircraft in the presidential fleet.

The amount the government claimed it spent is also more than 40 per cent of the cost of the aircraft. Chief Godswill Akpabio administration bought the state aircraft in June 2012 for the sum of 45 million dollars.

The SSG and his office also ignored requests seeking information and invoices on how N5.04 billion (N2.107 billion higher than the budgetary approval) was spent on the maintenance of the state aircraft, a Bombardier Global 5000 (N224BH) in 2019.

N2.7 billion spent on fuel and lubricants

Also, Akwa Ibom State Government House made huge discretionary spending on fuel and lubricants in 2019. More money was spent to run generators and fuel the governor’s and deputy governor’s cars as well as those of their family members and appointees than what was spent on capital projects for the education sector N2.10 billion in 2019.

In the budget, N1.3 billion was approved for “fuel and lubricants” for Government House; however, N2.70 billion was spent on these two items at the end of the fiscal year. The expenditure on fuel and lubricants was also 42 times the cost of what the state government spent on capital projects for the Ministry of Science and Technology in 2019, which was N49.25 million.

Our findings revealed that the Akwa Ibom State Government House fuel dump managed by Mr Udo Ekwere receives and uses five trucks of 45,000 litres of fuel (Premium Motor Spirit) every two months and 10 trucks of 45,000 litres of diesel (Automotive Gas Oil) for the same period.

Five trucks of PMS amount to 225,000 litres, meaning that 1,350,000 litres would be bought for the year. PMS was sold at N145 per litres in 2019. Thus, 1,350,000 litres would be bought at the cost of N195,750,000.

For diesel (Automotive Gas Oil), 10 trucks of 45,000 litres amount to N450,000 2,700,000 litres would be bought for the year. The average pump price for diesel in 2019 was N220 per litres. Thus, in a year, the projected cost of 2,700,000 litres of Automotive Gas Oil will be N594 million.

Hence the total cost of PMS and diesel utilised for one year should amount to N689,750,000.

N4.4 billion spent on govt special projects

Also, a Freedom of Information request seeking information from the Permanent Secretary, Office of the Governor, on the items called “government special development projects”, which his office spent N4.491 billion on in 2019 was rebuffed. The sum of N3.6 billion was approved in the 2019 budget for “government special development projects”. An extra N1.431 billion was spent on this item. This extra-expenditure alone was five times higher than the capital expenditure of the Ministry of Investment, Commerce and Industry for that year.

N13.2 billion spent on security services, N1.18 billion on hospitality and gifts

Again, the 2019 financial report shows that N1.18 billion was spent on the governor’s hospitality and traditional gifts. This amount was N382.4 million higher than the N800 million approved for that purpose.

The governor also spent N13.28 billion on security services, that is N1.28 billion higher than approved expenditure for that subhead.

The sum of N75 million was approved for medical/clinic equipment for Government House, but N153 million was actually spent. The variance in this item is higher than the capital expenditure of the Bureau of Rural Development and Cooperatives, which was N49.5 million.

The Government House spent N46.95 million on “tours and visits” but N20 million was approved. The variance in this item is higher than the capital expenditure of N25 Million for the State Environmental Protection and Waste Management Agency, called AKSEPWMA.

Fraud in Akwa Ibom State Pilgrims Welfare board

According to the 2019 annual financial report, the State’s Pilgrims Welfare Board spent N120 million on the production of “security encoded ID cards” for intending pilgrims. The approved budget for this item was N9 million.

The report also claimed that N25 million was spent on public orientation seminar/workshops and screening materials for intending pilgrims. N15 million was approved in the budget for this item. Our investigation revealed that the public orientation took place at Destiny International Mission, a Church belonging to the Chairman of the Pilgrims Welfare Board.

Our investigations also revealed that despite raising the expenditure on the security encoded identity cards for the intending pilgrims by N111 million, no ID card was produced for any of the 123 persons from the state who were taken to Jerusalem in 2019. Checks with the Board shows that state government sponsored 120 out of the 123 persons who went on pilgrimage that year.

Staff at the Pilgrims Welfare Board told these reporters in confidence that the agency did not produce identity cards for intending pilgrims. Some of the 2019 pilgrims from the state corroborated this.

For more than a month, the State Pilgrims Board ignored all efforts made to get its response on this issue. These reporters had visited the Board thrice to speak with the leadership of the Board. When the management of the Board was not seen, a letter requesting an audience with the Secretary of the Board was sent. The letter was not responded to.

The Akwa Ibom State Pilgrims Welfare is chaired by His Grace, Archbishop Cletus Bassey, the immediate past chairman of Christian Association of Nigeria, CAN, Akwa Ibom state chapter, and the champion of Akwa Ibom Christian Assembly.

Archbishop Bassey was not in Nigeria throughout the two months period this investigation lasted but when our reporters reached out to him via telephone, he directed them to the Secretary of the Board, Mrs Nsikak-Abasi Nnam-Okuo Orok.

When asked about the overpayments made on the security encoded identity cards, Mrs Orok said she is surprised to hear the claims made in the Accountant General’s report that money was spent on the production of security ID.

“I am surprised! I am just hearing that for the first time. For you to say that there was approval, I’m even surprised. We never even applied for the production of any ID. They wouldn’t have even given us approval of N120 million for an item that had N9 million approved for it in the budget. And, how will you apply for something that was N9 million and the Governor will give you N120 million?”

“I think something is wrong somewhere. We didn’t receive the said amount for public orientation. I didn’t have this information, I will reach out to the Accountant General (Pastor Uwem Andrew-Essien). Thank you for drawing my attention to this.”

House of Assembly unaware of the extra-budgetary expenditure

Meanwhile, the chairman of the state House of Assembly Committee on Appropriations and Finance, Mr Uduak Odudoh, whose committee has oversight powers on the Ministry of Finance, said the House was not aware that the Executive arm spent more on items in the budget than what was approved.

He said there was no supplementary budget for the 2019 fiscal year. “I am surprised to hear that! We have not given any approval besides the budget that was passed into law. Of course, you are aware that there was no supplementary budget in 2019”, he said.

Odudoh argued that it was not the responsibility of his committee alone to perform oversight on the government’s expenditure.

“We are 26 members in this House with chairmen of respective committees; so every committee has a responsibility to do oversight on-budget implementation. My committee often carries out an appraisal of the expenditures of the executive quarterly but we were limited in performing the appraisal for 2019 owing to the COVID-19 outbreak”, Odudoh added.

Also, the Chairman, House Committee on Public Accounts, Mrs Charity Idio, whose committee is mandated under section 125 (5) of the 1999 Constitution as amended to receive and consider the audited financial statement of the state, said her committee had received and considered the state’s audited report for 2019.

When asked if the State Auditor General’s the audited report had raised questions on why N4.864 billion was spent on the purchase of 15 Toyota Prado Jeeps TXL, after a short silence, she said, “I will not answer that.”

Commissioner for Finance responds

The Commissioner for Finance in the state, Mr Linus Nkan, insisted that there were no aberrations in the 2019 expenditure. He said the executive leveraged on the margin of increased cost in the budget office to spend more than what was approved on some budget items based on their importance as determined by the Governor.

“There is what we call budget margin. Budget margin is where we leveraged on for shortcomings. It is not always easy to anticipate everything that will be needed to be done immediately. So, provisions must be made for unforeseen circumstances or events.”

He said the Executive moved money from the sub-head (margin of increased cost in budget office) to where more money was needed to be spent. When asked to clarify the puzzling N 4.864B expenditure on the 15 Toyota Prado Jeeps the Commissioner said there could have been an “error somewhere.” He did not point out where the error occurred.

The argument canvassed by the Commissioner for Finance has been found to be misleading and incorrect.

Experts on public finance and fiscal governance who looked at the budget said the approved margin of increased cost in the budget office, (which was N6.3 billion but overspent by N2.99 billion) was for the budget office and not a sector-wide margin of increased cost which the commissioner for finance implied.

However, our investigations revealed that N16.317 billion was approved as the sector-wide margin of increased cost in the budget and this was for recurrent expenditure. The purchase of cars and other items which the over-expenditures were made on were not covered under this margin.

Meanwhile, A non-governmental organisation working on fiscal justice, Policy Alert, has said the state-wide margin of increased cost in the 2019 budget was outrageous and gave cover for financial profligacy by the executive.

Executive Director of Policy Alert, Mr Tijah Bolton-Akpan, said “over the years the margin provided in Akwa Ibom state budget is too wide and provides too much room for discretionary spending. A margin is what it is, a small leg-room for emergency and inflationary purpose. It is not in the best interest of the state that in 2019, N225.1 billion was budgeted for recurrent expenditure and a margin of N16.32 billion as a sector-wide vote, that is more than 7.2 per cent of the total recurrent. That is too wide for a margin.”

A Professor of Finance at the Federal University, Otuoke, Bayelsa State, Prof Emmanuel Bush said that executive has some powers to raise a requisition for virement when necessary.

“In a controlled setting like the public sector, you don’t just spend as it pleases you. You must get approvals. There is supposed to be checks and balances. You don’t just spend because you are in a position to spend.”

“When you have exigencies, you go back to where you got the approval and make these points known to them. You say this is what I wanted to buy which N1 million was approved, but over time, it is now N1.2 million. That you have the yam does not mean you should cut the yam at random. After the normal budgeting, you can come back to apply for some adjustments.”

“If you are a Governor or a Local Government Chairman, you don’t use your veto to spend more than that which is approved in a budget. Take, for instance, N100 was budgeted then you spend N120 and say you are taking from here to cover and later you explain. No! You must seek recourse and go back to the approval mechanism which is the legislature.”

“You cannot just put your hands in the coffers may be because the money is there from another source to spend. You need to get clearance and put to them that it is an extra-budgetary arrangement to cover for this extra circumstance”, Bush said.

Curiously, even with these huge extra-budgetary expenses in 2019, the Akwa Ibom State government was unable to pay gratuity and pension arrears forcing about 100 pensioners and next-of-kins of primary school teachers, some very aged and sick, to march on December 16th 2019, from Ibom plaza to the Government House in Uyo, protesting the non-payment of their entitlements. Payment of gratuities and pension arrears has remained a top-burner issue in the state since 2015.

Also, Governor Emmanuel administration is struggling to complete some road projects it started more than five years ago and others it inherited from the previous administration. Some of these road projects like the Uyo-Ikot Ekpene road, Ikot Oku Ikono-Etinan road, Etinan-ONNA road, and Etinan- Eket road, have been delayed unnecessarily despite their economic importance to the state.

Ironically, the state government complains of lack of funds to complete these and other crucial projects even as the Commissioner for Finance and the Accountant General of the state keep moving money secretly from budget subheads to items that have no direct impact on the masses and the state economy.

 

This investigation is supported by the John D. and Catherine T. MacArthur Foundation and the International Centre for Investigative Reporting.

 

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