Taking extravagance to absurd lengths

Posted on Saturday, December 8th, 2012

•Jonathan •Labaran Maku

Photo : •Jonathan •Labaran Maku

While millions of Nigerians are hungry and jobless, President Goodluck Jonathan is proposing to build a N2.2 billion party hall in the palatial Aso Villa. Group Business Editor, ROTIMI DUROJAIYE, chronicles the financial impiety of the Federal Government and that profligacy has become its cardinal principle.

Permanent Secretary, State House, Aso-Rock Villa, Emmanuel Ogbile jolted the nation recently with his argument before the Senate Committee on Federal Character and Inter-Governmental Affairs when he said that the N1,305, 292, 050 allocated for the Presidency in the 2013 budget for refreshments, meals and other miscellaneous expenses was insufficient.

The revelation was the fallout of his defence of the 2013 Presidency budget proposal of N14.7 billion.

Ogbile was adamant in his laughable justification thus: “I have taken pains to explain that this money is not just enough to fund the residence of the President and the Vice President. The experience I have had is that this fund is grossly insufficient. It’s not enough. The Federal Executive Council (FEC) holds every Wednesday and we take care of them through this budget.”

The Presidency budget also has few horrendous proposals, including the N107, 412,768 for honorarium and sitting allowance. Then there is N37, 277, 825 for publicity and advertisement; N50, 308,546 for medical expenses; N32,910,730 for sporting activities; N4,589,793 for subscription to professional bodies; N144, 788,555 for National Youth Service Corps (NYSC), IT, LOCUM, houseman-ship and contract staff allowances. Overtime is also to cost N250, 455,589 just as animals feeding and supplements for the veterinary clinic will cost N30, 584,144.

Besides these reckless proposals, nothing typifies the frivolous, insensitive and completely inept leadership troubling Nigeria currently than the recent approval of a N2.2 billion banquet hall for Aso Villa by the FEC.

The FEC hinged its decision to award this contract mainly on its belief that smaller countries have better banquet halls near their seats of power.

The Federal Capital Territory Minister, Bala Muhammed, who briefed the press on the issue, added that the existing hall was inconveniencing and that the proposed 150-seater hall would have such facilities as “security, hall conveniences, technical room and press briefing room that are more and more enhanced so that national broadcast can be done from there.”

In terms of the relevance of contracts approved, the decision of the FEC to approve a N2.2 billion contract for the construction of a 150-seater Banquet Hall and other related works in the Presidential Villa has been one of the most criticised contracts awarded.

Nigerians react:

Many Nigerians did not only condemn this anti-people spending, they said this disgustingly lavish lifestyle must be curbed.

Civil rights groups and the Action Congress of Nigeria (ACN) criticised the Jonathan-led administration for borrowing N2.57 trillion in 18 months and proposing a N2.2 billion banquet hall project for Aso Rock.

They said the country’s rising debt profile and the hall project in the presidency had shown that the Jonathan administration was wasteful and selfish.

The Chairman of Coalition Against Corrupt Leaders, Debo Adeniran, particularly said the proposal for the hall was a demonstration of insensitivity by the government.

He stated: “The absurdity of the reasons given– that the present hall is two kilometres away from the Villa, and that it’s inferior to that of other similar countries – further demonstrate how frivolity governs the mindset of our leaders when taking serious decisions on our behalf.”

According to him, the exorbitant cost of the project demonstrates the way Nigerian leaders misplace priorities and engage in reckless spending.

He added: “We can just imagine how many businesses N2.2 billion can save, lives that can be saved and sustained, and infrastructure that can be provided or upgraded.”

The Executive Director of Anti-Corruption Network, Dino Melaye, said the debts and the banquet hall, demonstrated the unpreparedness of the government to promote a pro-people’s spending.

He then asked: “What is wrong with the present banquet hall? Can’t it be upgraded? If the President can be going to Transcorp Hilton, International Conference Centre and Yar’Adua Centre, what is the problem?

“The N2.2 billion capacity hall is anti-people; the National Assembly must not pass it. If they do, we will occupy them. That amount will provide pipe-borne water for over 100 communities.”

The President of the Campaign for Democracy, Dr. Joe Okei-Odumakin, also said the debt is a sign of a Presidency that is detached from the people.

Her words: “This is the height of insensitivity in a country where 72 per cent of citizens live in absolute poverty. The people are in fast and the emperor is feasting. A sign that these people have totally lost it. We no longer have selfless but selfish leaders. What a colossal waste?”

The ACN on its part described the government as reckless and extravagant, warning that it could plunge the country into bankruptcy if left unchecked.

In a statement on Tuesday by its National Publicity Secretary, Lai Mohammed, the party said the high debt was totally unacceptable.

It said it was shameful that a government that had not made a positive impact on Nigerians would engage in such wastage.

The party said the government had beaten its record of profligacy by its decision to build a N2.2 billion banquet hall.

The ACN said: “It is interesting that a Minister of the Federal Republic of Nigeria is comparing the country with ‘smaller countries’ when it comes to justifying a project that will only benefit a few elite.

“Does the Minister know that the citizens of the so-called smaller countries enjoy uninterrupted electricity supply? Does he know that the citizens of those countries don’t have to queue up endlessly for petrol and kerosene; that they don’t have to depend on Okada for transportation and that they have no road as terrible as Lagos-Ibadan Expressway?”

The party said the project could not be justified in a country where “many go to bed hungry most nights, where youth unemployment is at a high 46.5 per cent and where there are no projects that could make Nigeria to achieve the MDGs, less than three years to the target date.”

The ACN advised the administration to retrace its steps by spending the nation’s scarce resources only on projects that could benefit the masses, rather than a few elite.

Presidential AirFleet ad inifinitum:

Information obtained from government aviation agencies and airline operators also revealed that the Goodluck Jonathan-led administration spends an estimated N9.08 billion annually on the Presidential Air Fleet (PAF).

PAF has the third largest fleet of aircraft in the country. According to findings, the PAF contains a total of 10 aircraft, coming closely behind Aerocontractors Airlines, which has a total of 14 aircraft.

Arik Air, the largest commercial airline in the country, has a fleet of 23 aircraft.

Figures obtained from the Nigerian Airspace Management Agency (NAMA), Federal Airports Authority of Nigeria (FAAN), and the Nigerian Civil Aviation Authority (NCAA) revealed that N9.08 billion is spent to maintain the 10 presidential jets every year.

The PAF include two Falcon 7X jets, two Falcon 900 jets, Gulfstream 550, one Boeing 737 BBJ (Nigerian Air Force 001 or Eagle One), and Gulfstream IVSP.

Others are one Gulfstream V, Cessna Citation 2 aircraft and Hawker Siddley 125-800 jet.

According to a former Minister of Information, Professor, Dora Akunyili, each of the two Falcon 7X jets purchased in 2010 costs $51.1 million, while the Gulfstream 550 costs $53.3 million.

The factory price of other aircraft in the fleet could not be easily obtained online. However, airline CEOs put the average price of Falcon 900 at $35 million, Gulfstream IVSP as $40 million, Gulfstream V at $45 million; Boeing 737 BBJ at $58 million, Cessna Citation is $7 million and Hawker Siddley 125-800 at $15 million.

This brings a combined estimated value of Nigeria’s PAF to $390.5 million (N60.53 billion).

According to airline chief executives and industry experts, airlines spend between 15 and 20 per cent of the cost of an aircraft on its operation yearly. They say that averagely, a little less than one-fifth of the cost of the plane is spent every year on insurance, flight and cabin crew, maintenance, fuelling, catering and training.

Going by the fact that at least 15 per cent of this amount is spent annually on operating the PAF, it means about $58.57 million (N9.08 billion ) is spent annually on running the planes .

Nigeria happens to be one of few countries of the world with a large PAF.

Most major countries in Europe and Asia maintain mostly two aircraft in their Presidential Air Fleet, according to Wikipedia.

According to the website, Japan maintains only two Boeing 747-400 planes in its Presidential Air Fleet.

The two aircraft, mostly for the Prime Minister, the Emperor, Empress and other members of the Imperial Family, is operated by the Japan Air Self-Defence Force.

The aircraft were constructed at the Boeing factory at the same time as the United States’ Air Force One. Both Japanese aircraft were delivered in 1990.

Wikipedia also confirms that The Netherlands government operates only two aircraft, one Fokker 70 and one Gulfstream IV, as a means of transport for the Dutch Royal family and government officials, such as the Prime Minister and other Ministers.

They are used, also, to attend international conferences, and also for private trips by the Queen and the Prince of Orange.

For long haul trips, the Royal Dutch Airline is used. Often the upper deck of a Boeing 747 is used.

The Queen of England, Queen Elizabeth 11 and Prime Minister, David Cameron, often go on British Airways chartered flights for long trips. UK’s Cameron was recently criticised by the UK media for chartering a foreign plane instead of a British’s.

Countries like Ghana, Algeria and a host of others in Europe maintain only one aircraft in their PAF.

Contract awarding FEC:

As part of the endless spending spree, information obtained from the website of the Bureau of Public Procurement (BPP) shows that the Federal Government awarded contracts worth about N1.187 trillion between August 10, 2011 and November 28, 2012.

The figure represents the total value of over 140 contracts spread across various sectors of the economy. A breakdown of the contract showed that between August 10 and February 15, the Federal Government awarded contracts worth over N700 billion, while in the months from May 30 to November 28, it awarded contracts in excess of N400 billion.

As the government continues to award contracts, in its quest “to better” the lot of Nigerians, however, there has been skepticism as to whether the contracts would be executed and if executed, whether they would be effective, especially as a number of them have continued to generate controversy.

In June this year, Vice-President Namadi Sambo had himself said over 12,000 federal projects worth N7.8 trillion had been abandoned.

The Vice President had warned that the trend would no longer be tolerated on June 21 when he inaugurated the Committee on Guideline for the Management and Implementation of Federal Infrastructure Projects in Abuja.

Though he warned that, “In line with the transformation agenda, the Federal Government has decided that federal projects would no longer be done haphazardly or arbitrarily,” Nigerians have continued to complain of the trend.

In November 2012, the Federal Executive Council (FEC) approved no fewer than 25 contracts as the total number of contracts awarded between May and November rose to about 50. Contracts awarded in November were worth more than N200 billion.

Among them was a contract worth N54.4 billion for the provision of complementary engineering infrastructure facilities to the Federal Capital City.

The contract for the rehabilitation of railway track network – Eastern Line (Port Harcourt – Maiduguri), which is worth N67.3 billion was also among those awarded in November.

Also, in November contracts worth N4.3 billion were awarded for the design, manufacture, supply and commission of two sets of five-car diesel multiple units, each with a capacity of 540 passengers and additional six numbers of 68-seater passenger coaches.

Other contracts awarded in 2012 included a N2.7 billion contract for the construction of Nkporo-Abriba-Ohafia Road in Abia State to Messrs Dutum Construction (Nigeria) Limited. The contract, awarded on May 30 is expected to be completed 18 months from the date.

On June 13, 2012, the FEC approved a contract worth N90.6 million for a major overhaul and restoration of Plant Unit GT17 at Ughelli Power Plc.

Over a month later, on July 25 2012, it reviewed the contract sum for the rehabilitation of phase I of the ministry of Finance office, to N2, 263, 231,068, with the contract expected to be completed in 56 weeks.

Three months later, with many more contracts approved in the time, the FEC awarded a contract worth N1.49b for the completion of the construction of the Zik Mausoleum at Onitsha Anambra State.

A review of the contracts awarded by the Jonathan administration between May 30 and November 28 this year showed that at least five consultancy contracts, worth N1.36 billion were awarded.

These included the contract for the supervision consultancy services for reclamation work on the Abam-Nnuju-Igbiri-Oba-Ojimba-Okujagu-Ama Water front and back swamps, which was worth N383.3 million.

On August 8, a contract was awarded for transaction advisory services for Design, Build, Finance and Operate on the 2nd Niger Bridge, which links Anambra and Delta States. The contract was worth N325.6 million. On the same day, the FEC also awarded a contract worth N297.7 million for transport advisory services for Design, Build, Finance and Operate on Apakun – Murtala Mohammed International Airport Road.

Two more consultancy contracts were awarded on November 28. The first, which is for the provision of consultancy services for the improvement of power supply at Murtala Muhammad International Airport, Lagos, was worth N233.8 million, while the second – a contract for consultancy services (supervision) for the construction of inland River Port at Jamata, Lokoja – was worth N121.1 million.

For the same period – May to November, the FEC favoured short-term projects. Of the 47 awarded contracts reviewed for the period, 29 (62 per cent) were contracts with completion duration of between one and 12 months. Contracts to be completed between 13 and 20 months were nine, as were those with completion duration of 21 months and above.

The regular approval of contracts by the FEC has not been without criticism with many Nigerians accusing the executive of turning the weekly meeting into a platform for the award of contracts rather than an avenue for discussing serious national issues.

In March this year, the House of Representatives had also slammed the approval of contracts by the FEC, describing such actions as illegal.

At the time, the Chairman of the House Committee on Public Procurement, Mrs. Jumoke Okoya-Thomas, had reportedly said the FEC was usurping the powers of the National Council on Procurement as stipulated by law. In the months that followed, the FEC has gone on to approve contracts in excess of N700 billion and the debate has shifted from the legality of the contracts approved by the council to the relevance of the contracts and the council’s ability to ensure the approved contracts are executed properly if at all they are executed.

Disdain for due process:

On Tuesday last week, Speaker of the House, Aminu Tambuwal, lamented that up to 50 per cent of the nation’s revenue was spent by Federal Government agencies without appropriation by the National Assembly.

At a meeting between revenue generating agencies and the House Committee on Finance, he had said: “The Constitution and our laws on revenue generation and expenditure have been observed more in the breach,” adding, “for the avoidance of doubt, the Constitution has provided elaborate methods of revenue collection, revenue remittances and expenditure approvals.”

Aside from the contracts awarded, the FEC has increasingly resorted to reviewing and augmenting contracts awarded. For instance, between May and November this year, up to nine contracts were revised.

An example is the augmentation on November 7, 2011 of contract No 1793 for the completion of dualisation of the Ibadan-Ilorin Road section 1: Ibadan-Oyo Road in Oyo State to the tune of N20. 1 billion.

With over N1trillion of contracts awarded in the last 16 months, one of the major concerns for Civil Society Groups is the fact that the country has remained rooted at the bottom or close to the bottom in global statistics regarding the quality of life of the citizenry.

For instance, in November, out of 80 countries considered, Nigeria was ranked as the worst place for a baby to be born in 2013 by the Economist Intelligence Unit.

It also remains one of the few countries in the world that has yet to eradicate polio with over 70 per cent of the population living below the poverty line.

Also, in the United Nation’s Development Programme Index for 2011, Nigeria was ranked 156th out of 187 countries surveyed with the UNDP saying that though Nigeria had recorded consistent high economic growth rate, it had failed to produce improved opportunities and reduce poverty among its citizens.

Always excelling on corruption:

Only on Wednesday, the global corruption watchdog, Transparency International, ranked Nigeria as the 35th most corrupt nation in the world.

The Corruption Perception Index 2012 released on Wednesday revealed that Nigeria scored 27 out of a maximum 100 marks to clinch the 139th position out of the 176 countries surveyed for the report.

Nigeria, sharing the position with Azerbaijan, Kenya, Nepal and Pakistan, is said to have remained entrenched in corruption without making much progress to fight the menace.

While countries such as Togo, Mali, Niger and Benin fared better, experts decried Nigeria’s poor performance in stamping corruption out.

The CPI 2012 confirmed recent media reports that President Jonathan lied to the citizens when he claimed in his Independence Day broadcast on October 1 this year that Nigeria was rated second after the United States by TI. TI, of course, denied issuing such a report.

Reacting to the country’s new rating on the corruption scale, Minister of Information, Mr. Labaran Maku, on Wednesday said the President could not be blamed for the latest corruption ranking of the country.

He said such reports were based on the comments of Nigerians who were always eager to tell the world how bad the country is.

He regretted that such aggregate of people’s perceptions did not recognise the various efforts being put in place by the government to fight corruption.

“The President does not sit in court to imprison people. There are institutions set up to do such. We do not follow the line in this country. We believe that if a market is not working in a village or there is an accident, the President is responsible,” he said.

According to TI, the 2012 index ranks 176 countries/territories by their perceived levels of public sector corruption. The index draws on 13 surveys covering expert assessments and surveys of business people.

The body particularly criticised Jonathan for paying lip service to anti-graft war and not showing enough drive to fight corruption, especially corruption involving past and current actors in his administration.

The President had also been carpeted for his reluctance in promoting transparency by failing to publicly declare his assets.

Ranging from the monumental fuel subsidy scam to the massive corruption uncovered in pension administration as well as the scams at the Securities and Exchange Commission (SEC) and the Bureau of Public Enterprises (BPE), many Nigerians have already rated the Jonathan-led administration very low in the fight against corruption.

Government officials, including some of President Jonathan’s associates, have been named in the brazen theft of public funds. Sons of both a past and incumbent National Chairmen of the ruling Peoples Democratic Party (PDP) were indicted and are currently undergoing trial for robbing the country of several billions of naira under the fuel subsidy regime.

Back to the old days of reckless borrowing:

The International Monetary Fund (IMF) on November 1, 2012 cautioned Nigeria against reckless spending in view of the growing uncertainty in the global economic environment.

IMF Senior Resident Representative in Nigeria, Mr. Scott Rogers, gave the warning while presenting the World Economic Outlook in Abuja.

He urged the Federal Government to take advantage of the current growth to strengthen her fiscal position by saving for the future through appropriate polices, “as there is no assurance of early global economic recovery.”

Rogers said: “The global economic outlook remains uncertain. The global context has continued to witness slowing growth mostly marked in the advanced economies.

“The U.S. housing prices remain depressed and that nation’s week economy is impacting negatively on many other countries of the world because the U.S. is an export destination of many countries of the world. The U.S. economy is recovering but the recovery is still weak.

“If the world economy remains weak, it will continue to affect countries of the world, especially those with strong ties with the US and the Euro area which could actually go into recession.

“Stop spending what is meant to be saved. Make the oil price rule effective,” he said.

Under President Jonathan, the Federal Government has borrowed a total of N2.57 trillion.

Thus, the Federal Government’s debt profile rose from N4.18 trillion as of June 30, 2010 to N6.75 trillion as of June 30, 2012.

The Jonathan government has continuously demonstrated that the interest of the larger Nigerian citizens is not its priority and that profligacy is its cardinal principle.

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