A Review of the Nigerian Energy Industry

Mischief makers behind rumour of missing N500bn SURE-P funds – Kolade

Dr. Christopher Kolade25 November 2013, Abuja – The rumour that N500 billion SURE-P funds could not be accounted for started from the National Assembly during an audience with the members of the Subsidy Reinvestment and Empowerment Programme Committee and like a wild fire, it became the talk of the town with various bodies insisting that the SURE-P committee has a case to answer. However, Chairman of the committee, Dr. Christopher Kolade, in this interview with Festus Akanbi, Obinna Chima and Sandra Alumna explains the working of his committee, dismisses the allegation on the alleged missing funds and throws light into why he has decided to step aside from his position as the chairman of the all- important committee

How did your journey to the SURE-P job started?

I was a few days away from my 79th birthday when the President asked me to come and take charge of the SURE-P. So at the end of last year, I was 80 years old. I thank God that I’m strong, and in good health and my simple mind is still very active.

But there comes a time when you are at my age that you ask yourself is this what you should be doing now? Should you be spending your time at this moment fighting rumours and trying to explain the same information 25 times? So, around middle of this year, I went to the President and said to him, I want to leave, but if you remember my deputy chairman then, (General) Mamman Kontagora had just died.

So the President now agreed that he would appoint another deputy chairman and that I would work with this deputy chairman for a while so that the place is not suddenly empty.

The deputy chairman dies, the chairman goes, but that is what we have been working on and I have actually written a letter to the President to let him know that latest by the end of this month, I’m out of SURE-P. So, he has that letter, and I can give you a copy of the letter because in this country, we feed on rumours and both in my family and in my religion, they don’t like rumours.

The letter was dated September 25, 2013. So if you hear or if rumour begins to indicate that I’m leaving, know that members of my committee already know that I’m going. So, it’s not a secret.

Is your resignation subject to the President’s approval?

There is no approval. Remember I’m a private citizen, who agreed to come and do some work with government and believe me; this work is not being done for government but for Nigeria. It just happened that there is a government that invited me to come and do it.

Can we say you are quitting because of the rumours or age?

I have a wife, children and grand-children. At this stage of my life, what should I be doing with those people? Should I actually be flying to Abuja every week and running around inspecting roads and other projects, is that what I should be doing now? So I have made it clear in my letter to the President that next month I will be 81 and I think even if I’m not wise enough to think about it, I think I have people around me who are thinking with me and saying hey, are you sure this is the right thing to be doing now?

It’s almost two years since the SURE-P was created but a lot of Nigerians are still skeptical about your activities and some even doubt if SURE-P actually exists. Can you take us through the activities of your committee in the last two years?

First of all, let us talk about the origin of SURE-P. SURE-P was something that the Federal Government decided to create as an intervention mechanism. Intervention in the sense that the Federal Government already has the responsibility and the strategy for running the affairs of Nigeria, for running the economy of Nigeria, for running the social welfare and so on. That is the responsibility of government and they already have ministries and other agencies that do this but government decided that it was going to withdraw the subsidy on petroleum products. They had already done it on diesel and they had already done it on one or two other items. When it came to petrol, however, we know how sensitive this is, so when government announced that it was removing the entire subsidy on petrol, it led to some agitations.

Federal Government then decided that okay two things. One, we will not remove the entire subsidy and whatever money saved from the removal of partial subsidy, we will not just put it back into the treasury and spend it along with other money we have, we will create a special intervention mechanism, so that this money coming from the partial removal of petroleum subsidy will be applied to specific projects and in order that the public may know and believe what we are doing, we will appoint a special group to help us to manage those funds. That is the origin of SURE-P. So, that’s how my committee and I came into this thing.

What have we done in the last two years?

First of all, SURE-P was almost a sudden creation. It wasn’t something that had been planned for a year and then put in place. It was done very quickly, in response to the agitation. We ourselves did not take off immediately. In fact, the inauguration of the committee did not take place until mid-February 2012. But even when that was done, we had to set up systems on how we were going to do the work, so that took some time. Indeed, the first time that we touched any money, that we managed any funds at all was July 2012. So the first half year went with preparation, strategising and so on and so forth. But since then, we have followed the agenda given to us by the President. The Federal Government said we would use this fund to intervene in infrastructure, roads, and railways and so on. We will use this fund to intervene in what we call social safety nets-maternal and child health care, creation of employment, Graduate Internship Scheme and things like that and this is what we have been doing. As of today, there are, just to take one example, 300 young people in every state of the federation that have been given employment for one year and they are receiving N10,000 a month as stipends.

3000 in 36 places plus the Federal Capital Territory gives you 111,000 and if you multiply that by N10, 000, you will see how much we are spending every month. We have tried also to create something we called the Graduate Internship Scheme but the internship scheme depends on two groups of people. The graduates looking for jobs and the companies that will give them internship opportunities. So, even though we have registered more than a 100,000 graduates for this employment, the number we have actually been able to place is around 20,000 because the companies concerned have to be willing to take them. So, we have to negotiate with them because even though we pay them something, their own stipend was supposed to be N18,000 and I think it has gone up to N25,000, the companies also have to supplement it.

So, on the social safety net side, we have the Graduate Internship Scheme, and the Maternity and Child’s Healthcare. We are in many remote parts of Nigeria now, we have trained midwives, and more than 4000 of them have been trained to deliver maternal services to pregnant women and to people in childbirth. If you look on the infrastructure side, the duplication of the road between Kano and Maiduguri for instance, it’s something we have been working on, the opening up of the rail line from Lagos to Kano, which for many years, we couldn’t do the journey right through, you had to break it somewhere near Bida, because the connection was not done. That was opened up before the end of 2012. We are working on the Eastern rail line now and so on.

These are things that are already happening. Those who live in those areas are experiencing the benefits of these things. One thing I have to point out is that in the case of roads for instance, we are not doing new projects. Let’s take the East-West road in the Niger Delta, the contract for that road was given I think in 2005 or 2006. So, work has been going on little by little. But if you look at the pace of work before SURE-P came into being, you will discover that it was going so slowly. There was no way of knowing how long it would take. So government decided to fasttrack the action on that. That’s why the SURE-P intervention came into place and it is this SURE-P intervention that has quickened the work on that pace to a point now where out of four projects, two are nearing completion. So, this is what we have been doing.

Does the activity of SURE-P also cover states and local governments? Some have even argued that the handling of capital projects by SURE-P also means duplication of jobs as there are ministries that are responsible for some of the projects you are handling. What is your view on this?

I will tell you what the situation is. The Federal Government decided that eventually they would take some of the subsidy out. Whatever funds accrue to government from that withdrawal has to be shared between the Federal Government, the state governments and the local governments. This is what the constitution demands. So, the way this is done is that 41 per cent of the total fund goes to the Federal Government; 54 per cent is shared by state governments and local governments, while the remaining five per cent is allocated to something called Ecological Fund, which is the Federal Government business.

My committee is the one that manages that 41 per cent. The 54 per cent is allocated to the states and local governments, and according to the constitution, we cannot tell them what to do with that, they are autonomous in that respect, so they have to spend it the way they want to spend it. What has happened is whenever any state government or local government wants us to assist in what they are doing, whether it is just to share experience or to share ideas, we have done so with two or three states but they have total autonomy as to how they spend their own allocations and my committee cannot interfere in the way they do their things unless they ask us.

Don’t forget that this is an intervention mechanism. People must remember that the business of government is ongoing. In fact, the area that SURE-P intervenes in does not represent the totality of government activity. For instance, we are not doing anything on housing, we are not doing anything on maritime. Government activity is going on all the time but this SURE-P money is money that was not in the normal budget. So government has decided to use it to supplement what they are doing with the normal budget. So for instance, if you take any road construction in which we have now come to intervene, what we do is to say, according to the budget of the ministry of works, how far have you gone with this road already? Let’s say the totality is 200 kilometres and they tell us they have done 70 kilometres. The question we pose is how much will your budget do in the next 12 months and they tell us they can do another 25 kilometres, we then go from that point, we now apply our own funds to continue. We don’t change contractors because that means you are doing something new, the contractors are ready to do this work, but the pace of funding has been slow, so we say to the contractors that okay, we are now going to12 months give you more money, so although you have said you will do only 95, how far can you go if we are able to give you another N40 billion? And they say in the next 12 months we can do another 50 kilometres. We are concerned with only 50 kilometres. So it’s not a duplication, it is supplementary, that is why it is an intervention. We are not going to do what the ministry is already doing. We are not even going to do what the ministry already has a budget to do because our own budget is different. What we are going to do is to say, your budget will take you to this point, we will start from there and make sure we do additional road. That now means instead of ending at this point in 2013, we can get to a point further ahead.

How will you respond to the criticism of your committee for patronising foreign contractors at the expense of indigenous ones, which SURE-P is supposed to protect?

SURE-P is not new government. It is a device to make sure that those things that are already going on can now be accelerated in pace, we are not executing a new programme and that is why there is no legislation that sets up SURE-P. It’s a presidential committee; it’s a device for quickening the pace of certain things.

The contractors, as I said, are willing to work. One of the features of life in Nigeria is the profusion of abandoned projects. There are many abandoned projects around the country. The reason for abandonment is if the contractor has done the work up to this point and he hasn’t been paid for work done, he will leave the place and look for something else to do. What we are doing is if we tell the contractors that this year, our budget for this work is so and so, tell us how much you want to collect for the job. He tells us and we tell him, starts the work. When you get to stage one and you want to be paid, we will come and inspect and we will arrange to pay you for what you have done, so that he can continue, so the system is where the change is, the system is what makes the difference that, for instance, I can say to a contractor at the beginning of the year, once my own budget is passed, I can say how much money is coming, I know when it is coming and

I know where it is lodged, so it is not like the normal fund when you say we are looking for the money. I already know that the SURE-P account at the central bank is being credited every month with N15 billion. For instance, we are now just over mid-November, I know that the N15 billion for October will be deposited in that account at the end of November, so it’s always one month behind, so I know how much money we are going to spend. I can therefore promise the contractor on the basis of actuality. At this point, we are not guessing, all the contractor needs to do is to do the work and we will process his certificate, we first go and inspect the work, process his certificate and pay.

The next question- why is it that we have not been able to go and bring local contractors? If a particular contractor was given the contract for this road four years ago before SURE-P and he is already working on the road, and it is not as if he does not have the capacity to do the work, it is that he is not being paid on time, why should I go and bring a new contractor to come and continue with this road? We already have the capacity to do the work. So, if anybody is worried that we are using international contractors for work in Nigeria, that is basic government policy, not SURE-P policy. SURE-P is simply saying, if we want to complete this work, you are already doing it, we will see how faster you can go. One of the things we have to be careful about is that we must not let our sentiment becloud our judgment. Yes, I will like to see more Nigerian contractors doing work in Nigeria but I must also be very firm in making sure that I’m getting the best at the proper cost and particularly at proper time. And if I have to go and start recruiting Nigerian contractors, it will slow me down.

How many job opportunities have been provided through the Graduate Internship Scheme?

Although we have about 100,000 graduates who have applied to us so far based on the number of firms, which are supposed to offer them the opportunity, I think we are in the region of 3,000. It’s not a very good performance. In the graduate internship scheme, we have applications but I cannot say go and start working in a particular company until that company says it will offer him employment. That is why the slow performance is coming from.

Can you throw light into the controversy surrounding the N500 billion SURE-P funds allegedly missing?

Your question is on the rumour that N500 billion SURE-P fund is missing. I have called it a rumour because that is what it is. The person or the people who started this rumour said they were aware from NNPC sources that about N800billion should have accrued to SURE-P fund since the beginning and that when my committee appeared before them, all we were able to account for was about N300 billion. I’m hoping that through this interview, we can clarify this once and for all. They have already said that according to their own knowledge, NNPC has told them, or they have concluded from NNPC information that N800billion should now be in the SURE-P funds. If the people who have responsibility will carry out their responsibility I should not be talking about this because I’m not the one collecting all SURE-P funds. The totality of SURE-P funds is collected by Federal Government and allocated according to the constitution. That is why my committee can only speak about N300 billion and by the end of the year we will be talking about N360 billion but at the point of discussion, we can only talk about N300 billion. I explained to you earlier, we are responsible for only 41 per cent. So, the remaining 59 per cent for states, among others is where that N500billion go. Therefore, for anyone to say it is missing or unaccounted for, it’s all falsehood, the person is telling a lie because he already knows the truth. When you know the truth of something and you go out to tell a lie, you are either a mischief maker or you are simply irresponsible.

The second thing I want to say is that if people who have the responsibility lived up to their responsibility, we should not be having this kind of thing. The Federal Government already knows how this money is allocated. So the moment this person or these people said what they said, it was the Federal Government that was supposed to say straight away, no this is the list of the funds we collected from subsidy reinvestment, this is the amount we are using for the Federal Government, this other amount has been sent to states and local governments. Somebody in Federal Government would have made that statement. It should not be the chairman of SURE-P that should be making that statement because I am not responsible for the gathering of the totality of the funds. When I looked at newspapers yesterday (Tuesday), finally I saw that the Federal Government has made a statement. The truth of the matter is the person who began that rumour was trying to create negative excitement, was trying to create sensation that will heat up the environment and you have to ask yourself, what is the motive for doing that? Why will anybody wants to do that? But as I said, it is not even my responsibility to tackle that person because he has already said when I appeared before them with my committee, I accounted for N300 billion, so that N300 billion is not missing, we are using it. So, I should have just kept quiet, which was exactly what I did. But those who have the responsibility should have spoken. Let me make my final comment on this rumour and I have used some strong words here that the person who started the rumour is a liar. This is because my committee has appeared at the National Assembly about five times and this information I have given you today on the various percentages assigned to the different tiers of government, I have given out that information at every single time we appeared before the National Assembly. They have it not just by words of mouth; they have it in documents. So every person in the National Assembly knows about it and don’t forget that it is the National Assembly that will finally pass the budget for any year. So, the National Assembly knows how this money is being allocated. So, for any member of that assembly to say to Nigerians that N500 billion is missing, you have to ask yourself, what is this person after? What is he trying to achieve? And whatever he is trying to achieve, is it in the best interest of Nigerians.

How will you react to a similar controversy trailing the allegation that your committee spent N2.2 billion on SURE-P secretariat services and N75 million on touring project facilities?

I have a grouse against the media. First of all, if you look at our accounts, our budget; you will find the amount earmarked for secretariat services, in order words, for running our offices and staff, etc for 2012 was only N1billion. So if anybody is going to spend more than N1 billion on the secretariat and things like that, he has to go back to the National Assembly for virement of funds from other places to supplement the N1 billion. So, we did not have N2.2 billion. By the time we were talking about this, it was in August last year and what has happened; we put down our reports to the National Assembly that so far, to that point, we had spent N220 million on secretariat services. Somebody in National Assembly read that to mean N2.2 billion. When we went to National Assembly and they said how come you spent N2.2 billion for secretariat services, I said where is that? And they said we should look at our account. We said, no, read it properly, it’s

N220 million. Members of the media were there. When the publication started, it was that N2.2 billion they published. They did not attend to the correction that we made that it was N220 million. Until now, we are still talking about N2.2 billion. I don’t know what else my committee should do to correct this and therefore, I go back to what I said about the N500 billion allegedly missing. There are mischief makers here. There are people who are deliberately spreading wrong information because they want to create confusion.

What about the N75 million spent on tour of the projects?

Work is going on, on Kano-Maiduguri road, work is going on on East-west road, work is going on on Benin-Ore Shagamu road, work is going on on railways and so on and every time the contractor says I have done every three kilometres of the work and I want to get paid, three of my committee members must go physically to inspect this. They must go if it is for instance if the man says he has done 20 kilometres of road, with their consultants, they have to inspect every metre of that road because our responsibility is to make sure that we confirm that the work has actually been done.

So for instance, if it takes them two to three days to inspect this work, I have to pay for that. I have to pay them over night allowance; I have to pay for their transportation and so on and so forth.

People don’t understand that you have to spend money to do that and therefore if it come to N75 million in six months, maybe that is what it is but the important thing, however, is do not simply take the figures, everybody is invited to come and inspect our books and see how every single item has been accounted for. When I travel, for instance, from Lagos to Abuja because Abuja is where the office is but I live in Lagos, my travel has to be paid for by SURE-P, my accommodation has to be paid for by SURE-P, but this is all shown in the account. So people should not be so fixated on figures. I know that N75 million is a lot of money but we have a 21-member-committee who have to go and inspect the projects.

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