February 21, 2017

Reps probe N22bn automative fund


CBN Headquarters

By Emman Ovuakporie & Johnbosco Agbakwuru

ABUJA—THE  House of Representatives Committee on Industry yesterday unveiled plans to investigate the disbursement of N22 billion that accrued to National Automotive Designated and Development Council, NADDC, from November 1994 to date.

Members of the committee at the 2017 budget defence of the agency, expressed displeasure over the utilisation of funds as well as the sum of N200 million spent on staff training; N30 million on National Youth Service Corps, NYSC, and SIWES in the 2016 fiscal year.

It was gathered from the document submitted to the committee by NADDC that about N22 billion was collected as levy between November 1994 and May 2007 and deposited in an account in Central Bank of Nigeria (CBN).

The Central Bank of Nigeria head office in Abuja.

The document stated:  “In May 2007, government stopped the levy collection. However it has been reinstated in this NADDC Act.

‘’Government utilised N7.555 billion of the fund as follows: N3.725 billion loaned to former NAFCON in 2000; N3.83 billion used for vehicle loan scheme for military and paramilitary organisations in 2006/7.

“However, in 2003, the President approved the transfer of the fund to Bank of Industry through a managed fund agreement, which led to the transfer of the fund to BoI in 2004.”

At the budget defence, Director General of NADDC, Aminu Jalal, disclosed the balance of N8.217 billion was domiciled with BoI as at March 2016, including the risk assets (loans).

Out of the total sum of N12.5 billion disbursed to 35 operators (undisclosed identity) in the automotive industry, he said about N6 billion had so far been repaid, while applications of 11 companies worth N7.3 billion were being processed.

According to him, from the total sum of N2.355 billion revenue that accrued to NADDC coffers in 2016, balance of N9.8 billion brought forward from 2015 was domiciled with the Accountant General of the Federation.

He said the council also sent them to training on practicals in automotive companies and supported them with training allowances, while others were trained in the councils office in Zaria.

On the 2017 budget, Jalal told the committee that the council proposed N1.701 billon as recurrent expenditure; N3.05 billion as capital expenditure and N187.87 million as overhead, while total revenue expectation was N5.49 billion.

He added that some of the machines ordered by the council had arrived at the ports and that application had been made to the Ministry of Finance for waiver, with no response at present.

The document further stated that  N10 billion will be set aside for Nigerian Vehicle Credit Purchase (finance scheme).

In his remarks, Chairman of the Committee, Abubakar Moriki, who expressed displeasure over the council’s inability to provide details of their expenditure, noted that  the automotive industry, which enjoyed the backward integration policy of Federal Government targeted at growing the automotive sector, should enjoyed free tariff or waiver from the Minister of Finance.

He, however, chided the council for failing to apply for waiver on time, stressing that the council should not wait until the goods arrived  the port in  to avoid payment of demurrage.

Moriki expressed concern that the outstanding N9.8 billion of 2016 Appropriation might be unspent before the end of the fiscal year as projects for which they were set aside were not ready.

To this end, the committee demanded for details of the beneficiaries of the fund, just as it stepped down further consideration of the budget.