A Review of the Nigerian Energy Industry

Reps query NERC’s N2.7bn severance package for Board members

*Nigeria's National Assembly.
*Nigeria’s National Assembly.

Oscarline Onwuemenyi

06 November 2015, Sweetcrude, Abuja – The House of Representatives has expressed deep displeasure over the decision by the Board of Nigerian Electricity Regulatory Commission (NERC) to pay a whopping N2.7bn to its members as severance package, dismissing it as unacceptable practice.

The House, which resolved to probe the Commission and the Board members, directed its Committee on Power to engage the National Salaries, Incomes and Wages Commission and NERC, with a view to investigating the matter and report back to it within two weeks.

Hon. Mohammed Garba Gololo from Bauchi State had raised a motion on urgent national importance on the need to halt the planned payment of N2.7bn by the Board of NERC to its members.

The lawmaker disclosed that while the chairman of the Board was slated to take N400m as his severance package, the six commissioners would take home N380m each.

Gololo stressed that the approval of the severance package by the Board members to themselves conflicted with the recommendations of the National Salaries, Incomes and Wages Commission, as well as offends Section 42 (1) (a) and (b) of the Electric Power Sector Reform Act.

He noted that Section 80 (1) of the 1999 constitution (as amended) stipulated that all revenues or other monies received by the federation shall be paid into and from one consolidated account.

The legislator disclosed that the N2.7bn intended to cover, among other things, upfront salaries of two years for each member of the Board pursuant to Section 35 (2) of the Electric Power Sector Reform Act, which bars a member of the Board from working in the power sector for a period of two years after leaving office.

The lawmaker told the House that he was convinced that members of the Board were not entitled to the payment of upfront salaries of two years since Section 36 (2) of the act did not bar them in any way from working in non-power sectors during the period.

He said the plan by the Board to pay its outgoing members the severance package was “unlawful and unconstitutional as it is not authorised by the National Assembly in the 2015 Appropriation Act.”

The lawmaker puts that the budget of the Commission for the year at N42, 290, 077, which is for capital expenditure.

Gololo said he was convinced that the Commission had no recurrent expenditure in the 2015 budget. This, he said, implied that either it does not pay any salaries to its Board and staff or pays from funds that have not been paid into the Consolidated Revenue Fund in contravention of the constitution.

He therefore urged the House to probe the payment of such severance package, which he described as indefensible, lacking in transparency.

According to him, with the dwindling resources accruing to the nation, it is the duty of leaders of public institutions to manage public funds judiciously, adding that it is also within the constitutional powers of the National Assembly to authorise withdrawals from the public funds of the federation.

Others who contributed to the motion were full of fury as they condemned the arrangement. The contended that it was suicidal for a group of people to decide and allocate such large chunk of money to themselves, when the entire country was running out of funds to pay it’s civil servants.

Recall that the Trade Union Congress had, a few days ago, criticised the proposed payment of about N2.7 billion as severance allowance and gratuity to seven board members of NERC.

The Congress described the proposed payment as a reflection of the fact that the agency has lost touch with prevailing economic realities.

It further warned that paying that huge sum of money at a time the government is suffering from cash crunch would be a disservice to the people.

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