23

Mar

ODUAHGATE: WHO WILL CAST THE FIRST STONE? 04112013

2013-11-04

ODUAHGATE: WHO WILL CAST THE FIRST STONE?
By Les Leba

The frenzy of opinions, allegations and counter allegations on the NCAA's ill-advised purchase of two armoured vehicles has been sustained in the media in the last few weeks.  The revelations may have foreshadowed erstwhile favourable public perception of the otherwise optically credible reconstruction of several airport terminals nationwide.  

The Minister of Aviation, Stella Oduah's earlier unfortunate statement that the recent Associated Airline plane crash was an act of God rather than a lapse in NCAA's oversight, inadvertently ignited a wave of angry public responses, which ultimately led to the clandestine revelation that the Minister had approved purchase of two armoured vehicles for protecting the integrity of airport perimeter fences!

The NCAA management later argued that the armoured vehicles were acquired because the Minister's life had been threatened because of her strident and alleged uncompromising attitude to positively reorganising the aviation subsector; on second thought, however,  the NCAA added that the vehicles would also be available for use and protection of visiting foreign dignitaries.  All other things being equal, these explanations  may have foreclosed further public criticism of the honourable Minister; unexpectedly, however,  the media subsequently carried reports that according to feedback from car dealers, the two vehicles were grossly overpriced; the National Assembly Committee on Aviation also intervened and declared that purchase of two armoured vehicles had earlier been queried and rejected in the 2013 budget presentation of the aviation ministry.

Besides, the legislators further noted that only N240m was approved for 25 cars in the NCAA's budget, but were surprised that the agency went on to purchase the two armoured vehicles in addition to so many other vehicles!

In her own defence, the aviation minister, Stella Oduah insists that the legislators declarations notwithstanding, the armoured vehicles were properly captured in NCCA's budget, while she also observed that the approved budget for vehicles purchase had not been exceeded by the agency, since the agency entered into a lease agreement with their bankers for the acquisition of the said security vehicles.

Conversely, however, the agency's bankers noted that it had no lease arrangement with the NCCA, and insisted that NCCA received a loan of N643m, repayable over three years, with cumulative interest burden of over N500m (about 25% p.a.)!  Nevertheless NCAA ultimately declared that even if the transaction was a loan, the agency still had not contravened the Public Procurement Act, which prescribes that all expenditures exceeding N100m must be subjected to due process.

The NCCA, therefore, argues that the N643m expenditure is accommodated within the agency's three years Medium Term Expenditure Framework (MTEF).  The critical questions, however, are, can the NCCA seek refuge under the MTEF to violate its approved budget of N240m for vehicle purchase?  Furthermore, does the agency have the right to borrow medium or long term outside its annual approved budget provisions?  Besides, if the sum of N643was borrowed for the purchase of vehicles, then, what happened to the N254m that was formally appropriated by the legislature?  Even if N100m out of this sum is applied to debt service for year 2013 for the vehicle loan, the agency will still have to account for its application of a balance of N154m.  Consequently, it may be necessary to also probe other bank loans, if any, besides the N643m borrowed from First Bank for vehicle purchase!

Worse still, there is no apparent sinking fund for the eventual repayment of NCAA's loan; for example, the N643m loan together with projected service charges of about N500m would come to a total of about N1.14bn, payable instalmentally at N400m per annum; an amount, which already curiously exceeds the 2013 approved budget of N254m for vehicle purchase this year!

The above hazy scenario is most probably replicated in the business of most government ministries, departments and agencies.  A thorough and transparent consolidation of all such outstanding MDA loans may produce a discomforting insight into the true level of our national debts, outside of the N7tn directly attributable to direct loans from government bills and bonds!

These government agencies have inadvertently also become the victims of Central Bank's excessively high monetary policy rate of 12%, as this oppressive benchmark rate in turn instigates the very high lending rates for both government agencies and the private sector!

In the light of the preceding discordant positions between the banks, the legislature, NCCA and the Minister of Aviation, we may need to take a second look at the sources and cost of funds, which the NCCA applied for reconstruction and renovation of several airports nationwide.  Do these expenditures fall within the approved budget or were they also sponsored with expensive domestic bank loans without due process?  Besides, how transparent and competitive was the process of contract awards for these airports, and how reasonable were the applicable cost of funds!  Furthermore, what provisions are in place for interest payment and ultimate liquidation of the capital sum borrowed?

Furthermore, in view of the disconnect between the Customs Service and the Finance Ministy, there is an urgent need to clarify how much duty was paid on the NCAA's armoured vehicles, or indeed confirm whether or not the armoured vehicles were inappropriately, surreptitiously covered by the same waiver granted to Lagos State government for the 2012 National Sports Festival, since the same automobile vendor was involved in both transactions.

In view of the loud public outcry on this matter, The judges and the jury may be quick to indict Stella Oduah and the NCCA, but it is likely that neither the expenditure of the Legislature nor the Executive would stand up to any transparent scrutiny of their operations and accounts!

Mr. President, for example, may be unable to justify the cost efficiency of the stable of 10 classic aircrafts in a country where over 70% live under abject poverty!

Consequently, therefore, if there is any validity to karma, then, it is clear that any stone thrown at Stella Oduah may ultimately return as a boomerang to both the judges and the jury, whose hands are also horridly stained.  

SAVE THE NAIRA, SAVE NIGERIANS!!