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How Senate report nailed NAPEP management


IN the past few months, the National Poverty Eradication Programme (NAPEP) has been in the news on account of the whereabouts of about N417 million, being the balance of funds yet to be remitted after the tricycles known as Keke NAPEP had been supplied to beneficiaries.


Central to the issue is an organization known as Keke Riders and Owners Association of Nigeria (KORAN), and an outfit known as Trimidan Nig Ltd, alleged to be assembling its own tricycles without a charter from government.

As a result of the unending controversies, allegations and counter-allegations of corrupt practices, the Senate, at its plenary session of February 18, 2009, debated the NAPEP. At the end of the debate, the legislative body mandated its Committee on National Planning, Economic Affairs and Poverty Alleviation to undertake an exhaustive investigation of NAPEP activities.

While the committee prepared to execute its mandate, other issues of national interest intervened, and the committee was necessarily distracted. Recently however, the committee concluded the assignment, and wrote its report, which is yet to be made public.

Sunday Vanguard however was able to get a copy of the report, sans its annexure, which indicted the NAPEP management on some alleged misdemeanors, and concluded that there is the need “to restructure NAPEP into a commission or agency through an Act of the National Assembly”.

Of particular importance is Section 6(12) of the report, in which the Senate Committee noted: “It was established that NAPEP was a creation by an executive fiat with no legal backing whatsoever to regulate its activities.”

The Senate Committee report was signed by Senator Zaynab Kure, committee chairman, and Alhaji Lawal Barau Bungudu, clerk of the committee. Other members of the committee who appended their signatures to the damning report are Senators Odion Ugbesia, Ahmad I. Lawan, Turaki Saminu, Suleiman Adokwe, and Munirudeen Muse. Others are Senators Iyabo Obasanjo-Bello, Abubakar T. Ayuba, Ayogu Eze, and Bode Olajumoke.

The signature of Senator Yisa Braimoh, a member of the committee, was not among. On the terms of reference, according to the report in Section 4.0, a comprehensive investigation into the activities of National Poverty Eradication Programme (NAPEP)” was  considered to be wide, therefore the committee  resolved to limit the scope to: scrutinize all the programmes embarked  upon by NAPEP in the fight against poverty between (2001- 2009);   look into how the funds  appropriated or  given to NAPEP  to  execute such programmes were  managed; and,  any other issue  the committee  finds relevant to the investigation.
Beyond N417 million

The Senate Committee report however looked beyond the issues of unsupplied tricycles and unremitted N417 million, which, for the moment, seem to be the focus of attention. In its finding and observations, in Section 6.0, the committee noted:

“Breach of memorandum of understanding (MoU) and operational guidelines by NAPEP and some micro finance banks: Every NAPEP programme has guidelines on how it is to be run.
“However, findings revealed these terms and conditions and operational guidelines were mostly observed in breach”.

– Abuse of office by NAPEP officials: It was discovered in some states that NAPEP officials used their influence to approve for themselves directly or through their cronies amounts which they used with no intention to repay.

– Diversion of funds: It is established that cases of funds approved for certain beneficiaries were diverted to different beneficiaries thus making it impossible for such funds to be recovered.

– Partial release of funds to beneficiaries: Our investigation revealed that there were number of instances whereby monies approved for certain projects were partially given to beneficiaries. In some cases, some state NAPEP officials released part of the approved monies to their contractors to undertake projects on behalf of beneficiaries, thereby surcharging the actual beneficiaries.

– Patronages: It is noted that in  most states, NAPEP  funds were used  for  politicking as the monies were given  out as succour to loyal party members with  no plans for recovery.  It was a clear case of politicised  micro-financing.

– Lack of proper ‘monitoring and evaluation by NAPEP: From the investigations, it is  established that despite the sum of N1.850bn provided between 2006 and 2008 on monitoring and evaluation,  this aspect of the programme was very weak and ineffective. Most of the anomalies identified in various states of the federation were as a result of the nonchallant attitude of the Monitoring Unit of NAPEP at the national and state levels.

– Misapplication of funds by benefitting cooperative societies: This refers to scenario where multi-purpose cooperative societies (MPCS) were given loans to undertake a particular business but used the money for other things outside earlier proposal submitted to NAPEP, thus endangering the repayment.

– Unfit micro finance institutions engaged in loan disbursement: In  many instances, incompetent, unqualified and even unregistered micro finance institutions (MFI) were engaged by NAPEP in the disbursement of funds to beneficiaries; in other cases, the micro finance institutions absconded with money. In another direction, some of the micro finance institutions became distressed with huge amount of NAPEP funds trapped.

– Faceless names and fake addresses: In this case, it is established that NAPEP in their submissions to the committee provided fake names and unverifiable addresses. These anomalies are most noticeable in the Capacity Acquisition Programme (CAP) and Mandatory Attachment Programme (MAP).

– NAPEP funds management: The committee established that relationships between NAPEP and two banks were skewed in favour of the banks. It is observed that the funds meant for Village Economic Development Solution (VEDS) and COPE programmes – N5bn and N2.265bn respectively were managed to the disadvantage of NAPEP and poor Nigerians.

The banks in collaboration with NAPEP officials left the fund  idle in various accounts with no interest paid by the banks. It is equally established, a situation where one of the banks charged commission on turnover (COT) on NAPEP (government) accounts against the directive of the Central Bank of Nigeria”.

On the tricycles, the Senate Committee report observed:: “The contract for the supply of Keke NAPEP was awarded in three phases:
Phase 1: Contract was awarded in 2001 for the supply of 2,000 units, at the contract sum of N700 million. All the units were supplied by the contractor, and NAPEP state coordinators were in the collection and distribution of units allocated to their states.

The sum of N86,074,440.54k was still outstanding as at December  31st  2009, with neither the beneficiaries nor the K-EKE NAPEP-on  ground to ·recover the sum. Equally, the sum of   N32,656, 605.47k  worth of spare parts was supplied by the contractor.

Phase II
This contract was for the supply of additional 2,000 units at the contract sum of N814, 685,000k. The units were supplied on scheduled. Collection and distribution were done by an  NGO engaged by NAPEP. The discounted amount was fully recovered because the NGO sold the Kekes at a higher rate in open market, there by denying the targeted beneficiaries from benefitting.
Phase III

The contract for the supply of additional 5,000 units of Keke was awarded in 2007 at the total contract sum of N2.4 billion.
The amount was paid up front to the contractor on the strength of a Union Bank performance guarantee issued to NAPEP by the contractor.

According to the contract agreement, the entire 5,000 units were to be supplied within 455 days”.
The committee observed that payment of the entire contract sum was made on the strength of the Federal Budget Monitoring and Price Intelligence Unit approval.

The collection and distribution of the assembled tricycles, the Senate Committee alleged, was surrounded by manipulations between NAPEP, the Initiatives for Peace Empowerment and Tolerance International (IPET) and KORAN in the following ways:

“The use of the phase by NAPEP” KORAN or any other grassroots’ based organisation”, when seeking for the approval of Mr. President for the distribution of the Kekes was deliberately chosen in order to engage IPET (an NGO) for the exercise even before it was registered with the Corporate Affairs Commission; in a paid advert in This Day newspaper of June 16th, 2008, NAPEP urged the general public interested in the Kekes to deal with IPET (which was not registered then) on the strength of which Kebbi State Government N35,792,302.50″, even though the contractor had successfully executed the first and second phases of the Keke contracts, the committee said the third phase was yet to be completed as at the time of the investigation due to the following reasons:

“Failure to evacuate the already assembled vehicle from the assembling plant in good time to give room for further assembling of vehicles cleared from the port; the unexpected port congestion caused by the collapsed crane (which lasted for four months), made it impossible for the clearing agent of the contractor to locate the remaining containers at the port; the inability of the contractor to fully pay the huge demurrage penalties on the uncleared containers caused the Nigerian Customs to slate them for auctioning; the unserious threat of litigation and termination of contract by NAPEP to the contractor caused unnecessary confusion and delays towards the completion of the contracts.

Most of the Kekes allocated to the states were diverted to open market and even displayed for sale in some cities at exorbitant prices of N390,000 to N410,000 per unit; it was established that NAPEP was a creation by executive fiat with no legal backing whatsoever to regulate its activities”.

NAPEP’s reaction
However, national co-ordinator of NAPEP, Dr Magnus Kpakol, in a media outing, said he actually empaneled a committee comprising staff of NAPEP, including the Secretary, to go to Lagos and conduct an investigation regarding the activities of KORAN”. Kpakol said it was through the investigation that it was discovered that that N417 million had not been paid by KORAN . They told me when they got there that the man said his money was tied up in Intercontinental Bank during the crisis that took place, and they were not giving him money, that NAPEP should give him two weeks”, the coordinator stated.

The Zaynab Kure-led committee then recommended as follows:
That where codified guidelines were circumvented, the erring officers should be sanctioned appropriately, while those that adhered to the guidelines be commended; that the erring officers should be sanctioned and the monies recovered; that benefitting cooperative societies should be made to pay back monies and appropriate sanctions be meted to defaulting societies; that the concerned staff should be identified and sanctioned appropriately for engaging unqualified and unregistered micro finance institutions; that reasons for withdrawing funds be identified and appropriate sanctions be meted to erring microfinance institutions and staff alike; all the NAPEP officials involved be sanctioned appropriately; that the Monitoring and Evaluation Unit of NAPEP be overhauled and given the necessary impetus to function; that for maximum benefits to the populace, politicising the programme be reduced to the barest minimum or stopped; that the management of NAPEP should be held responsible for all the lapses and the contractor should be made to deliver the remaining Keke-NAPEP immediately; that the banks concerned should be made to account for all the monies that accrued and their regulatory agencies be notified to sanction the banks appropriately, and that there is need to restructure NAPEP into a commission or agency through an Act of National Assembly.


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