FAAC disowns Okonjo-Iweala; denies approving withdrawal of $2bn Excess Crude funds By Bassey Udo

Commissioners of Finance and Accountants General of the 36 states of the federation on Tuesday distanced themselves from claims by the former Minister of Finance, Ngozi Okonjo-Iweala, that they were part of the decision to withdraw and spend $2bn from Nigeria’s excess crude oil revenue account last December.

Edo State governor, Adams Oshiomhole, and his Kaduna State counterpart, Nasir El Rufai, had, after the National Economic Council (NEC) meeting in Abuja on Tuesday last week, accused Mrs. Okonjo-Iweala of unilaterally approving the withdrawal of about $2.1 bn from the $4.1 bn left in the Excess Crude Account (ECA) last November “without authorization”.

But in a swift reaction, the former Minister had vehemently rejected the accusation, describing allegations linking her to the allegations as “false, malicious and totally without foundation”.

Mrs. Okonjo-Iweala’s reaction, conveyed through a statement by her Media Adviser, Paul Nwabuikwu, said all expenditures from the ECA “were discussed at meetings of the Federation Accounts Allocation Committee (FAAC) attended by finance commissioners from the 36 states”.

“It is curious that in their desperation to use the esteemed National Economic Council for political and personal vendetta, the persons behind these allegations acted as if the constitutionally recognized FAAC, a potent expression of Nigeria’s fiscal federalism, does not exist,” she said.

But in a stern reaction on Tuesday in Abuja, members of the FAAC, under the aegis of the Forum of Commissioners of Finance, disowned the former minister, describing her claim as “misleading and far from the fact”.

“It has come to our notice the statement credited to the former Coordinating Minister of the Economy and Honorable Minister of Finance, Dr. Ngozi Okonjo-Iweala, that the Federation Account Allocation Committee (FAAC) approved the withdrawal from Excess Crude (Foreign) Account the sum of Two Billion U.S. Dollar ($2,000,000,000.00),” the commissioners said.

“This statement is far from the fact and is misleading,” the statement said.

The FAAC meeting for November 2014 ended in confusion when the then Minister of State for Finance, Bashir Yuguda, could not explain how the balance in the ECA had dropped from $4.1 bn at the end of October to $3.1 bn.

Prior to the October FAAC meeting, Mrs. Okonjo-Iweala had told reporters that the balance of the ECA stood at $4.11bn, while the country’s external reserves rose from $36.6bn in June to $39.48billion as at October 16.

Regardless, the then Chairman of the Forum of State Commissioners of Finance and former Ebonyi State Commissioner of Finance, Timothy Odaah, had denied knowledge of any decision to withdraw from the account, insisting that none of its members was aware of the withdrawal.

“No state knew how the $1 bn difference reported in the Excess Crude Account balance, between October and November, came about,” Mr. Odaah told reporters then. “The discrepancy has been noted for discussion at the next FAAC meeting. It calls to question how transparent the management of the excess crude revenues has been.”

Till the end of his tenure, Mr. Odaah, who later claimed reconciliation was ongoing with the Finance Minister, did not reveal his findings.

However, several months later, Mr. Oshiomhole stirred the controversy afresh last week with the allegation that the former minister was economical with the truth about the country’s finances.

Mr. Oshiomhole had lambasted Mrs. Okonjo-Iweala over her claims that Nigerians knew what the three tiers of government usually collect through the State Finance Commissioners who usually attend the monthly FAAC meetings.

The power to take money from the ECA, Mr. Oshiomhole argued, is vested in the NEC, an institution created by the constitution, and not State Finance Commissioners, who are not known by the constitution.

In disowning Mrs. Okonjo-Iweala, the Commissioners’ Forum pointed out that the law setting up FAAC, which predates the ECA, “cannot approve withdrawal and has not done so in the past.”

If anything, the Commissioners said, records of FAAC meetings show that members have always queried the activities on the ECA, and therefore did not decide any withdrawal.

Although the Commissioners said they observed the withdrawal of $2bn from the ECA in December 2014, the then Minister of State Finance and Chairman of FAAC, Mr. Yuguda, had explained during plenary that approval came from former President Goodluck Jonathan.

The withdrawals were to help pay subsidy claims to oil marketers, who had threatened to stop importing petroleum products.

“FAAC did not and could not have approved, nor took the decision to withdraw the sum of Two Billion U.S. Dollar ($2,000,000,000.00) from the Excess Crude Account,” the Commissioners said.

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Breaking The Stalemate of Corruption

Breaking The Stalemate Of Corruption  - Olu Ojedokun and Jamila Suleiman

Today because of the corruption that has engulfed our governance the largest people living in poverty are children. A significant number now live in the most backbreaking, gut-wrenching poverty any could imagine. However, if we accept fidelity to our 16-year-old freedom from military rule and democracy is the code of our civic religion then surely our code to our humanity should be faithful service to that unwritten commandment that says ‘We shall give our children better that we ourselves receive.’  However, the rampancy of corruption according to Joda, found everywhere, denies us access to that unwritten rule.

’Segun Osoba, the academic argued that whilst corruption is a global phenomenon only intelligible within its social context, as an anti-social behaviour it confers improper benefits contrary to legal and moral norms and undermines the authorities’ capacity to secure the welfare of citizens. His concern for Nigeria is that corruption has become the principal means of private accumulation and has come to shape political activity within the polity.

These corrupt tendencies in Nigeria are corroborated and are renowned in the international community. Within this context Nigeria had enacted several pieces of legislation seeking to criminalise accumulation that cannot be satisfactorily accounted for and not directly attributable to income. Thus, the independent and Corrupt practices (and other related matters) Commission Act 2000 (As Amended), (ICPC) the Economic and Financial Crimes Commission Act 2011 (As Amended) (EFCC) as well as the Penal and Criminal codes all seek to ensure that Nigerians keep within the Code of Conduct provisions encapsulated within the Constitution of the Federal Republic of Nigeria 1999, (As Amended).

In proffering explanations for enactment of the laws and in setting up of their respective commissions to prosecute suspects of corrupt practices, Hannatu Raji wrote that the impetus to create the ICPC rested on “…The resolve to fight and win the war against corruption in Nigeria…”

However, after the exit of the pioneer chairman (Ribadu) from the EFCC, the zeal to fight corruption appears to have gone from 100 to zero amid the negatives. The evidence rests in the fact showing many corruption trials have not gone beyond the plea stage, some for as long as six years after first arraignment in court.  Many ex-government office holders, who had been accused of corruption, are still free and not been subject to any sanctions. Some of them were elected into the National Assembly and are making laws for the country. The archives of the EFCC is littered with details of the cases abandoned or which remains in abeyance by the Economic and Financial Crimes Commission (EFCC), in the period stretching from 2008 till date.

Any criminal lawyer worth his/her salt knows that the ability and success of curbing corruption in Nigeria depends on the combination of a number of factors, namely, the exhaustiveness of legal provisions of statutes to meet the innovative tendencies developed for private accumulation at the expense of the public, the efficacy of the police and anti-corruption commissions to properly investigate and arraign suspects, the efficacy of judicial officers to properly prosecute as well as the willingness and ability of the executive to insist on the implementation of laws whilst desisting from tacit approval of corrupt practices.

From the scenario presented in the previous paragraphs, it is obvious that the attainment of the combination of these factors in Nigeria has failed. Investigation, prosecution and conviction have been rendered costly, problematic and almost always unachievable. It therefore appears that neither the penal system as it presently operates, nor the political will that subsist are sufficient to cope with and address the scale of crimes of corruption in Nigeria.

Another clue as to why the stalemate seems to have arisen, may be situated within the argument that Nigeria’s legal system places much emphasis on retributive rather than restorative justice and posits this has given rise to lack of remorse on the part of offenders who now demand proof of their culpability during trial rather than show remorse. We question why the sentencing and custodial option should be adopted and thereafter public funds are spent again to decongest the prisons. In reality Nigerian legal system proffers stiff penalties, which are in reality unenforceable, making a mockery of the whole system. We therefore advocate that the use of Restorative Justice options such as plea-bargaining, bail process and victim-offender mediation be considered. This revolves around the cognisance of the underlying issues involved in an offence, which ranges from sociological, psychological and economical.

It is in line with the scenario presented above that the adaptation and implementation of a Truth and Reconciliation Commission process with its legacy of downplaying the punitive aspects of the traditional criminal justice system and focusing on an alternative penal justice system is suggested. Adaptation and implementation of the model will encourage more admissions of involvement in private accumulation from public funds rather than face the option of long jail terms put at “not less than 15 years and not more than 25 years” by, for instance, the EFCC Act.

The value in adapting a TRC model emerges from the apparent success achieved as a tool in mediating conflicts around the world and particularly in South Africa. In Nigeria, these are conflicts where significant parts of the governing elite are implicated or where stalemates have ensued. Nigeria is in a combat situation as far as corruption is concerned and many of the penalties in place are in reality unenforceable.  That is why we in our academic contribution to knowledge, a few months ago authored a seminal paper ‘The Problematic Of Competing Or Reconcilable Paradigms in The Adaptation Of The Truth and Reconciliation Commission Model In Addressing Crimes Of Corruption In Nigeria’ in the Journal of Law and Criminal Justice, USA, arguing for the recognition of some sort of parallel of this war against corruption in Nigeria to those of other conflicted societies. 

Dr. Olu Ojedokun of Lead City University writes from Ibadan, whilst Ms. Jamila Suleiman of Modibbo Adama University of Technology, writes from Yola.