N'ASSEMBLY MAY CUT MINISTRIES' BUDGET BY 50 PER CENT

EFCC arrests ex-Works Minister over alleged N50b graft

THERE were strong indications yesterday that the National Assembly might cut budget proposals by ministries and agencies by half as part of measures to ensure prudence in the management of the nation's finances.

Also, the Minister of Finance, Olusegun Aganga, has cautioned the legislature against increasing the oil benchmark proposed in the 2011 budget.

And, the Economic and Financial Crimes Commission (EFCC) yesterday arrested a former Minister of Works, Hassan Lawal, for allegedly defrauding government of over N50 billion while in office.

Head of Media and Publicity, Femi Babafemi, confirmed Lawal's arrest but did not give details.

However, an authoritative source within the commission told The Guardian that the former minister was picked up by the EFCC operatives during the early hours of yesterday.

He said Lawal was being investigated over alleged complicity in a massive fraud perpetrated in the ministry during his tenure in office.

The source said Lawal's arrest followed the establishment of a prima facie case of financial impropriety and fiscal misconduct against him.

'The commission's investigation revealed that he (Lawal) awarded contracts to unregistered companies running into over N50 billions in gross breach of the Due Process Act,' the source stated.

Aganga issued the caution during an interactive session between the joint committees of the Senate and the House of Representatives and the Ministry of Finance.

He said the price of oil in the international market, which is about $90 per barrel, might not continue that way and there was need to be on the side of caution in case of a change in the price.

'We have to exercise caution when we talk of oil price. We put the figure of $65 per barrel to be on the safe side. The oil market is volatile,' he cautioned.

Aganga also disclosed that all revenue-yielding agencies of government were currently being audited with a view to increasing the revenue profile of government.

The Senate Committee on Interior, chaired by Bariye Amange, during its budget defence session with the Ministry of Interior, raised the alarm that despite efforts by the National Assembly to reduce the cost of governance in the country, the budget proposals forwarded by some agencies were quite worrisome.

He expressed the determination of the National Assembly to reduce the figures.

The committee noted that some of the items included in the ministry's budget proposal were repeated and that the amounts proposed were unrealistic.

The committee observed that there were subheads tagged 'local travels and transport training,' 'local travel and transport others,' 'international travel and transport training,'' and 'international travel and transport, others,' with different amounts which were higher than those of 2010 by over 85 per cent.

It also queried the provision of N20 million in the proposed budget for budget monitoring, pointing out that the fund for monitoring had already been included in the cost of the projects.

The panel also noted that in some cases, the costs of the projects were increased by about 3,000 per cent above the figures quoted in the 2010 budget.

It observed that the performance of the 2010 budget was about 50 per cent in most ministries and suggested fixing appropriations for them at that benchmark this year.

The panel said: 'We are worried about the execution of the budget which is about 50 per cent. This is worse than the Obasanjo administration. Under Obasanjo, we used to have about 70 per cent performance but now, we have 50 per cent. If they can't convince us, it is better for the National Assembly to budget 50 per cent.

'The minister of finance was invited to the House of Representatives and he said there was no problem of funding and that the problem was with the ministries because they are not coming for funds.''

The panel added: 'We are emphatic that in a situation where you say you can only perform 50 per cent, let us give you 50 per cent of your budget''.

The committee also hinted that the overheads of ministries and parastatals might be slashed by 2.5 per cent.

'We are going to slash overheads by 25 per cent. It is not 25 per cent of the budget brought to us in 2011 but in 2010. Our collective resolve is that we will downsize overheads.'

But Minister of Interior, Emmanuel Ihenacho, appealed to the lawmakers not to reduce the overheads because 'that will affect the performances of the agencies.'

The minister also informed the committee that the ministry owed arrears of salary because some promoted workers were yet to be paid their new salaries and allowances.

The Guardian learnt yesterday that EFCC operatives are on the trail of some of the former minister's associates allegedly linked with the fraud. As at the time of filing this report, Lawal was still with the EFCC. It was unclear whether he would be released on administrative bail or held in custody.

Lawal's trouble may not be unconnected with a call for his probe over alleged contract scam made by a team of Independent Engineers on March 20, 2010. Under the aegis of Independent Engineers for the Ministry of Works and Urban Development, they had last year called for the review of contracts awarded by Lawal.

'We (engineers) want a comprehensive review of some contracts awarded by Hassan Lawal as they did not follow due process', an engineer who pleaded anonymity had stated.

Specifically, they alleged that Lawal was fond of diverting funds meant for Federal Government appropriated road projects to non-appropriated road projects.

Since the publication of a full-page report on page five of a Kaduna-based newspaper of March 9, 2010 entitled: 'Works Ministry contract scandal,' there has been disquiet in the top echelon of the ministry.

Sources close to the management of the ministry disclosed that fresh allegations of non-advertisement of some road projects, especially the contract awarded in 2009 to the tune of N17 billion, was also said to be giving the former minister and his top aides sleepless nights over the way and manner the 'secret' was purportedly leaked to the public.

The N17 billion project allegedly awarded without advertisement and design drawings by any engineer is a section of Benin-Sagamu highway, which was awarded to a top construction company in the country that had since late 2009 started work.

On this allegation, the ministry is reportedly using the same contractor handling the Kano-Maiduguri road project on the Nasarawa State project.