IRE-PORl" ~O'N 'THE;OO'MP;RE-HE'NSIVE l'NV.E:STI'GATION l'NTO THE ,A'Cir-IVliTTES ,Of ~NA.nO·N.AL :P.

OVERn' iERA'DICATlON .iPROG·JiAlM'M:E i(NA'P.EP):

During its plenary on February, 18th 2009, the Senate extensively debated on a motion titled "The Dismal Performance. of National Poverty Eradication Programme (NAPEP),' and resolved that its Committee on 'National Planning, Economic Affairs and Poverty Alleviation do conduct a comprehensive .investigation into the activities of NAPEP"

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:1~'D Introduction:

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The Committee could not conclude the assiqnrnentearher than now due to the 'magnitude of the task and the exigencies of other legislative activities witnessed during the period .

Senator Zaynab A. Kure Senator ,Odion U,gbesi.a Senator Yisa Brairnoh

Senator Iyabo Obasanjo-Bello .Serrator Abubakar T .. Ayuba Senator Munirudeen A. 'Muse Senator Suleirnan Adokwe Senator Ayog u Eze

.Senator Ahmad T. Lawan Senator Bode Olajumoke Senator Ibrahim S. Turaki

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,3.0 ,:CommitteesAction:

-·Chairman

.- Vice Chairman - 'Member

- 'Memper

·-Member - Member

- Member

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-Member

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The Senate resolution was transmitted to the Committee vide. letter' of' referral dated 19th February 2009 soon after the referral, the Committee held severa! meetings during which the scope of the .assignment was defined 'and the methodology to carry it out was clearly outlined.

·4:0 Sco.pe .of 'the ,Ass'if) n ment:

"A comprehensive Invesncation into the activities of National Poverty Eradication Programme (NAPEP)" w.as considered to be wide, therefore the Committee resolved to limit the scope to:

Scrutinize all the programmes embarked upon .by NAPEP 'in the fight against poverty between (2001- 2009)

.Look into how the fund appropriated or given to NAPEP to ·execute such proqramrnes weremanaqed: and

Any other issue the Commlttee finds relevant to the mvestiqation.

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The Committee adopted these methods in .executinq the assignment:

I.. Called for memoranda from the 'General Public through print and electronic 'media outfits;

II. 'Requested "for information from Government Agencies such as'; Office of the Accountant General of the 'Federation/Office of the Auditor Genera! of the Federation, Office of Special Assistant to the President on MDGs, Corporate Affairs ·Commission (CAe), NAPEP Headquarters and State Office:and Commercial and Micro Finance Banks that have been dealing with NAPEP.

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iii. Fact findings visitation carried out in thirty .~ six (36) states of the .Federation including Fa during which some beneficiaries of NAPEP programmes, ·Micro Financial lnstitutions, NAPEP staff.. members of various Corporative Societies as well as other stake holders were met and interviewed by the Committee .

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The information received from these various quarters were .carefullv Studied, .and .analysed :by the .Cornrnittee .as 'much as possible to provide .a balanced, factual and verifiable position lor the senate to pass a valid judgement on -the performance of NAPEP.

6. O:Fi ndings! :-Observation-:

'6.1 BREACH OF MEMORANDUM OF UNDERSTANDING (MOU) and OPERATIONAL GUIDELINES BY NAPEP AND .sOME ·MICRO FINANCE BANKS:

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Every NAPEP programme has _guidelines on how it is to be run. However, -findings reveal -:that in "most cases, these terms and conditions-and operational guideli nes _ werefra udu iently circumvented. Please see -annexureL

'6.2 "ABUSE OF OFFICE BY 'NAPEP OFF1CIALS:

lt was discovered in some states that NAPEP officials used their influence to approve for themselves directly or through their cronies amounts which they used with no intention to repay back, Please seeannexure 2.

''-'\ 6.3 DIVERSION OF FUNDS:

It is established that cases of 'funds 'approved for certain beneficiaries were diverted to different :beneficiaries thus, makes it impossible for such 'funds to be -recovered. Please see annexure "3..

~l, 6.4 PARTIAL RELEASE OF FUNDS TO BENEFICIARIES:

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Our investigation reveals that there were number of instances whereby monies approved for certain projects were partially _given to beneficiaries. In some cases, some State NAPEP officials released part of the approved monies to their contractors to undertake projects on behalf of beneficiaries,

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thereby surchar9ing :the actual beneficiaries. Please _see :a-nnexu re 4 ..

:6.5 PATRONAGES:

It is noted that in most :States, NAPEP 'funds were used for politicking 'as the monies were given out as succour to loyal party members with no plans for recovery. It was a clear case of politicised micro-:financlng. Please .see annexure 5..

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LACK OF PROPER MONITORING AND EVALUAT10N BY NAPEP:

From the investi_gations, it is established that despite, the sum of one hillion eight hundred and 'fifty rnillion (Wl.B5Dbn) naira only provided between 2006 and 2008 on Mon-itoring and Evaluation, this aspect of the .programmes was very weak and ineffective. Most of the anomalies identified in various States of the federation were as .3 result of the nonchalant attitude of the 'Monitoring Unit of NAPEP -at the national and state levels" Please see annexure 6.

6.7 'MISAPPLICAT10N OF FUNDS BY BENEFITING COOPERATIVE SOCIETIES:

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This refers to scenario where multl-purpose cooperative societies (MPCS) were given loans to undertake a particular business but used the money for other things outside earlier proposal .submitted to NAPEP thus endangering the repayment. Please see .annexureZ.

6.8 UNFIT -MICRO -FINANCE INSTITUTIONS ENGAGED IN LOAN DISBU RSEMENT:

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In many instances, incompetent, unqualified and even unregistered micro finance institutions (MFI) were engaged by NAPEP in the disbursement of funds to beneficiaries; in other cases, the micro finance institutions absconded with some money. In another direction, some of the micro finance

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institutions became distressed with hu_ge :amount of NAPEP funds trapped. Please .see annexurea,

-6.9 -FACELESS NAMES AND -FAKE ADDRESSES:

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In this case, it is established that NAPEP in their submissions to the Cornmlttee provided 'fake names .and unverifiable addresses. These anomalies are most noticeable in the Capacity Acquisition Pro_gramme (CAP) and Mandatory Attachment Programme (MAP). Please .see annexure ,9.

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-6.10 NAPEP FUNDS MANAGEMENT:

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The Committee .established that relationships between -NAP_EP and Intercontinental Bank Pic and Oceanic International Bank Pic were skewed in favour of the banks. lt is observed that the funds meant for Vtllaqe Economic Development Solution (VEDS) and COPE pro_grammes - Five billion (WSbn) and two billion two hundred and sixtv-five million (N2.26Sbn) naira respectively were managed to the disadvantage of NAPEP and poor Nigerians. The banks in collaboration With NAPEP officials left the fund idle in various accounts with no interest paid by the banks. It is equally ,established, .a :situation where one of the banks charqed commission on turnover (COT) onNAPEP (_government) 'accounts against the directives of the Central Bank of Nigeria. Please see annexure :10.

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6.11 KE K _E NAPEP.:

The contract for the supply of KEKE NAPEP was awarded in Three Phases:

Phase :1

Contract was awarded in 2001 for the supply of 2000 units, at the contract sum -ofU700 'million. All the units were .supplied by the contractor, and NAPEP state coordinators were in the collection and distribution of units allocated to their states.

The sum of N86, 074;440.S4K was still outstanding as at December 31st 2009, with neither the beneficiaries nor the

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KEKE NAPEP on :ground to recover the :sum. Equallv. the sum of -#32, :.656,605A7k worth of spare parts supplied by the contractor.

Phase II

This contract was for the supply ofadditional2DOO units at the contract sum of -'#814,685, -aOOk. The units were supplied on scheduled . .collection and distribution were done by-anNGO enqaqed by NAPEP. The discounted amount was fully recovered because the NGO sold the KEKEs at a higher rate in open market, there by denying the targeted beneficiaries from benefiting .

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Phase III

The contract for the supply of additional SOOO units of Keke was awarded in 2007 at the total contract sum of cN2.4billion. The amount was pald off front to the contractor on the str.ength of a Union Bank .performance fJuarantee issued to NAPEP by the contractor. According to the contract agreement, the entire ~5000 units were to be supplied within 455_ days.

The Committee observed that payment of the entire contract sum was 'made on the strength of the Federal Budget Monitoring and Price Intelligence Unit approval. Please seeannexure :1.1 {a').

The collection .and distribution of the assembled tricycles was surrounded with lots of shoddy manipulations between NAPEP, the Initiatives for Peace Empowerment and "Tolerance International (lP.IT) and the Keke Owners Riders Association of Nigeria (KORAN) in the following way:

(1) The use of the phase by NAPEP" KORAN or any other .grassroots' based organisation", when seeking for the approval of Mr. President for the distribution of the Kekes was deliberately chosen in order to engage IPET (an NGD) for the exercise even before it was registered with the Corporate Affairs Cornrnission,

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(2) :In a paid-advert in This D.ay newspaper of June 16th, 200B; 'NAPEP ur_ged .the :general public interested in the Kekes to deal with IPET {which was 'not registered then) on the strength of which -Kebbi .State Government .paid thirty·.;live 'million seven hundred and 'ninety-two three hundred and two naira fifty kobo (N3S,792,302.50) only.

Even though the contractor had successfully executed the first and second phases of the Keke contracts, the third phase is yet to be compietedas at the time of our investigation due to the following reasons:

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1. Failure---Qf--NAPEP-=ap~iHteEl·--S-NGO to evacuate the already

assembled vehicle from the-assembling plant in good time to give room for furtherassemblin_g of vehicle cleared from the port.

2. The unexpected port congestion caused :by the collapsed crane (which lasted 'for four months), made it impossible 'for the clearin_g agent of the contractor to locate the rernalninq containers -at the port.

3. The inability of the contractor to fully pay the huge demurrage penalties on the uncleared containers caused the Nigerian customs to .slate them for auction.

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4. The unserious threat of litigation and termination of contract poised by NAPEP on the contractor caused unnecessary confusion and delays towards the completion of the contracts. Please see attached annexure 11 (b),

-Most of the Kekes allocated to the states were diverted to open market and even displayed for sale in some cities at exorbitant prices of-M390,OOO to#410rOOO per unit. Please see annexure 11 (c),

6.121t was established that NAPEP was a creation of an Executive Fiat with no legal backinq whatsoever to regulate its activities. Please see .annexure 1.2.

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7.l) ,Recommendations:

7.1 The ,Committee recommends that where codified guidelines were circumvented, the -erring officers should be sanctioned .approprlately, while those that adhered to these _guidelines be commended;

7.2 That the erring officers should be sanctioned and the monies recovered;

7."3 That benefiti ng cooperative societies should be made to pay back monies and appropriate sanctions be meted to defaulting societies;

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7. 8 That the concerned staff should be identified and -sanctioned appropriately lor engaging unqualified and unregistered micro finance institutions;

-That reasons for withdrawing funds be identified and appropriate sanctions be meted to erring micro 'finance institutions a nd staffa like;

,All the NAPEP officials involved be sanctioned appropriately:

Th-at the Monitoring and Evaluation Unit of NAPEP be overhauled and given the necessary 'impetus to function;

That for maximum :benefits to the populace, politicising the programme be reduced to the barest minimum or stopped;

7.9 That the management of NAPEP should be held responsible for .all the lapses and the contractor should be made to deliver the remaining Keke-NAPEP immediately;

7.10 That the banks concerned should be made to account for all the monies that accrued and their regulatory agencies be notified to sanction the banks appropriately.

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7.11 That there is need to restructure NAPEP into _a co-mmission or :agency through an Act of National Assembly.

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SenatorZ'aynabA. Kure

Chairman

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1. Senator Odion U,gbesia

2. Senator .. ll:,ttrri·ad 1. Lawari

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3. Senator Turaki I.Saminu

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4, Senator Suleiman A. Adok~.e

5. Senator Yisa Braimoh

6. Senator Munirudeen A. Muse

7. Senator Iyabo Obasanjo-Bello

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8. Senator Abubakar T.Ayuba

.9. Senator Ayo_gu Eze

10.senator Bode Olajumoke

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