By Darliignton Anule
On June 1, 2021, the Minister of Labour and Employment, Senator Chris Ngige inaugurated the new management of the Nigerian Social Insurance Trust Fund, NSITF, with Michael Akabogu who has a doctorate degree in Financial Mathematics as the Managing Director.
However, the question on the lips of those familiar with the ugly trajectory of the fund is whether the new team will be different from the predecessors.
That the agency has turned a byword for financial malfeasance re-echoed in a coincidence that Wednesday. While the Minister was performing the inauguration at the Banquet Hall of the Presidential Villa and warning the new team against corruption; the Senate, just two minutes away, was threatening a warrant of arrest on the NSITF management for not honouring its invitation. Senate claimed the agency has over 50 unanswered audit queries.
Empowered by the Employee Compensation Act of 2010, the NSITF collects contributions from public and private employers and pays compensation to workers over injuries or death in the course of work. It is a fund contributed by employers to purchase insurance package for their employees, and from which employers can also seek compensation for loss of man-hours. But the NSITF has been in the news for the wrong reasons since 2015 when the EFCC established that N62b was stolen from its account between 2012 and 2015. Therefore, retrieving the agency from mismanagement is about the biggest challenge Ngige has faced in administering labour for the benefit of the Nigerian workers.
From Ismail Agaka’s acting management of 2015 to Bayo Somefu who took over in 2017, the agency has underperformed in meeting the objectives for which it was set up to the extent that observers only hope the new management can arrest the national embarrassment the agency has become. Ngige harped that much in his address at the event. “It is important for me to draw the attention of the new management to the financial hemorrhage the NSITF has passed through in the last few years and the imperative of a new direction as contained in the directive of the President. The years of the Locust are now over. You can’t afford to take us back to Egypt. The era where N5b vanished in one day is gone for good and so also is the era of looting of N48 billion without a single voucher,” he warned.
A little flashback will reveal the metaphor of bondage in Ngige’s reference to Egypt . It is an allegory of the past twists of sleaze, the very reason the presidency has been unsparing of different actors who participated in running down the organisation. In 2015, the EFCC investigated the NSITF, discovered massive looting to the tune of N62b and charged the chairman and some members of the board, including some officials of the management to court. It was discovered that the agency breached all financial regulations to the extent that it has no audited report between 2013 and 2017. About N30 billion was carted away and in one instance, about N5 billion was established to have vanished without vouchers in one day! The internal audit mechanism broke down irretrievably, unable to check the massive fraud where non-Executive Directors transmuted into Executive Directors and Executive Chairman. The Administrative Panel of Inquiry led by K.C Awotu set up on February 15, 2017 to further probe the fund, made damming revelations and far reaching recommendations. It submitted its report on July 18, 2018.
We have blocked loopholes
Speaking on May 13, 2019, the day the new chairman of the board of the fund, Austin Isere and other board members were sworn in, the Minister gave insight into the implementation of the recommendations of the Awotu Panel. “We have blocked the loopholes exploited by the past board by strengthening the financial and audit points through strategic staff deployment. We stopped uncoordinated appointment of collection agents, indiscriminate investments as well as multiplicity of bank accounts. We have also strengthened the legal department, enthroned the Single Treasury Account (TSA) and liaised with the Bureau of Public Procurement (BPP) to vet new consultants for collection of contributions.”
The prospect was therefore bright as he further assured the public that the agency has been restructured and repositioned and stated that the outstanding would be handled by the new Board and Management. He even added a boast, “at least N5 Billion cannot now varnish in a day without audit trial or voucher.”
How the Bayo Somefun-led management dashed all expectations and ended up a victim of indictment by the Presidential Joint Board and Audit Investigation Panel set up in July 2020 after they were suspended on the directive of the President is sad.
The team was initially suspended on July 1, 2020 following “preliminarily prima facie infractions on the extant financial regulations and Procurement Act, and other acts of gross misconduct which include N3.4 billion lavished on non- existent staff training split into about 196 different consultancy contracts in order to evade the Ministerial Tenders Board and Federal Executive Council, FEC, approval,” according to a statement by the Ministry of Labour and Employment.
The statement further alleged “non- existent, unexecuted N2.3 billion contracts, documented and paid while N1.1 billion was awaiting payment without any job done, all totalling N3.4 billion.”
It added that 14 Zonal/ Regional offices in 14 states running into billions of naira was constructed without the knowledge of the board or Minister and that some of the projects were duplications even as the management defied ministerial directive to halt payment pending completion of procurement audit.
Led by Ibrahim Khaliel, a frontline labour leader, the Presidential Joint Board and Audit Investigation Panel inaugurated on July 16, 2020 had representatives from Central Bank, Auditor General of the Federation, Head of Civil Service of the Federation, National Productivity Centre as well as the Ministry of Labour. Though Ibrahim died a day to the submission of the report, it made in-depth recommendations which were approved by the President. The former Managing Director and some of the indicted management team shunned the panel and took the President and the Minister to court. That the BPE refused to send a representative to the panel was another ugly political twist which analysts interpret as an attempt to shield its members in the procurement unit of the agency whose hands are deep in the hemorrhaging of the fund.
Apart from removal from office and replacement by a new team , the Joint Board asked the dismissed Managing Director and three Executive Directors, Jasper Azutalm , Kemi Nelson and Tijani Sulaiman to refund a total sum of N181, 056,000. The board also terminated the appointment of nine other senior management staff and ordered a total overhaul of procurement department for corrupting the fund’s procurement process by “ admitting companies through the backdoors when bidding had ended, injecting extraneous companies and projects after advertisement and bidding have been concluded, contract splitting, initiation of procurement contract without budgetary allocation, conversion and switching of one fully bided project to another.”
It is on this background which Ngige described as ground zero that the Akabogu team has taken over with warning against a repeat of the past. “This new management should not indulge in the sins of the past and must adhere to the statutory conditions of service and remunerations for board members approved by the Minister as enshrined in the NSITF Act. Procurements must be done as contained in Procurement Act 2007 and Finance Act, financial regulation and the extant government circulars especially on Threshold of Procurement items.”
Whether the new team will break the jinx remains to be seen but it has one unique advantage which the two previous boards didn’t have. Both the Managing Director and three other executive directors were appointed in-house. They saw the Gordian knots tied and know there is no better way to untie it than cutting with a sharp sword. Besides, none is a politician usually expected to make returns to the constituency. But again, some argue the bane of the public service in Nigeria is the civil servants. Whether they succeed or not lies in the bowel of time but the Minister of Labour is no less optimistic as he was in 2019 as he exhorted them, “on your shoulders lies the burden of untying this organization from the tethers of stagnation. We must live down the past and lead a rewarding change in the fortunes of the NSITF in line with the directive of Mr. President and the establishing Employee Compensation Act of 2010.”
Anule, a labour activist lives in Abuja