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Business News

2019 Budget: Ministry of Trade and Investment’s alleged N42bn fraud exposed

The Senate Committee on Trade and Investment reportedly uncovered N42 billion fund allegedly allocated to a private company.

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2019 Budget: Ministry of Trade and Investment N42 billion fraud exposed

The parliamentary debates on the N8.08 trillion 2019 budget proposal have already begun, even as the Senate Appropriation Committee was recently given two weeks ultimatum for the submission of its final report to the National Assembly.

In the wake of this development, the Senate Committee on Trade and Investment, yesterday, reportedly uncovered N42 billion fund allegedly allocated to a private company in the 2019 budget of the ministry.

What transpired?

The Minister of Trade and Investment, Dr Okechukwu Enelamah, appeared before the Senate Committee to defend the Ministry’s 2019 budget. In the course of his presentation, the Senate Committee’s Chairman, Senator Sabo Mohammed (APC Jigawa North West), called the attention of the Minister to the sum of N42 billion allocated to the Nigeria Special Economic Zone Company. According to him, the company is fictitious.

Following the Minister’s presentation, Senator Sabo once again referred to item 2 on page 7 of the proposed budget, which contained N42.091 billion allocation to the Nigeria Special Economic Zone; a company that reportedly does not exist. This resulted in the lawmakers’ subsequent rejection of the proposed N15.633 billion 2019 budget presented by the Ministry.

The minister’s attempted Boycott

The Minister of Trade and Investment attempted to justify the inclusion of the N42 billion alleged fraud, stating that the company was established through a Presidential initiative and was given approval during a Cabinet meeting in May 2018.

“One of the areas that this government has focused on is infrastructure. The second area is industrialisation and the two have something in common.”

“If the government tries to do it alone, it would be extremely tasking. So the President directed that we should bring other partners that can combine with whatever monies we have to build world class infrastructure which led to the establishment of the company in partnership with other investors.”

Again, the minister was asked to expatiate on the ownership of the supposed fake company. He responded that the company is jointly owned by both the Federal Government of Nigeria and other shareholders which he refused to disclose.

Senate Committee on Trade and Investment said the Minister lied

However, the Senate Committee Chairman objected to the claim made by the embattled Minister. He reportedly presented a document obtained from the Corporate Affairs Commission (CAC) which contained information about the company’s ownership.

According to the CAC document presented by the Chairman, the actual company’s name is Nigeria Sez Investment Company Limited as against Nigeria Special Economic Zone Company as listed in the proposed budget presented.

More about “Nigeria Sez Investment Company Limited”

The CAC document, as read by Senator Sabo, also shed more light on the ownership of the said company:

“Ownership of the company, as clearly stated in the document obtained from CAC on the 26th of last month, designated as Directors Dr. Bakari Wadinga, Mr. Olufemi Edun and Ms Oluwadara Owoyemi.

“The document clearly states that the company is a private company and that liability of the members are limited by share which is also shown, gives Federal Government 25% and 75% to the private individuals.”

This is a financial ambush, the Senate Committee declared 

The Minister to persuade/convince the Committee’s Chairman and its members that the initiative was driven by the Government, but all to no avail. The Committee stood its ground by describing the process as a misnomer and financial ambush on the nation’s commonwealth.

The Committee, thereby, gave directives to the Minister to forward all the details on how the company got into the 2019 appropriation list. He is also to present information about the company’s supposed management staff, list of staff strength, and account statement.

More on the budget proposal by the Ministry of Industry, Trade and Investment 

According to the breakdown of Nigeria’s 2019 budget as obtained by Niarametrics, the N42 billion is under the Special Economic Zone Projects.

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Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

1 Comment

1 Comment

  1. Temitope

    April 2, 2019 at 2:29 pm

    What a great work. Thanks to senate committee on trade and investment for a great work and findings done to fish out another padded money into 2019 budget.
    God will continue to fish out those sabotaging our common national wealth.

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Consumer Goods

Sell-off of shares by investors extend Flourmillers loss on NSE to N25 billion

Nigerian Flour millers on NSE suffer a decline as wary investors offload shares.

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Bloody February: Sell off of shares by investors extend Flourmillers loss on NSE to N25 billion

The sell-off of shares on the Nigerian Stock Exchange has triggered an N24.9 billion loss in the market capitalization of Flour Millers since the beginning of February, as wary investors offload.

It is important to note that the Nigerian Equity Market has been on the downward trend since the beginning of February, as wary investors sell off stakes in companies as the yields in the money market become attractive.

The results of this move led to a decline in the shares of companies listed on the Nigerian Stock Exchange, including a decline in the shares of Flour millers listed on the bourse.

A review of the performance of the stocks of these Flour millers on NSE revealed that the market capitalization of FLOUR MILLS, HONYFLOUR, and Northern Nigeria Flour Mills from the open of trade on February 1 till the close of trading activities on February 24 has declined from N154 billion to N129 billion.

How they have all performed

FlourMills has declined from N142.3 billion to N118.3 billion. However, the market cap of Honeywell Flour Mills has also declined, albeit marginally from N10.31 billion to N9.91 billion, while that of NNFM has declined from N1.72 billion to N1.25 billion. When added up, the three millers have lost N24.85 billion in market capitalization.

However, Flour Mills, the largest miller on NSE lost the most with N23.98 billion, as a percentage of market capitalization. Flour Mills is down by 16.85%.

Market activity

At the end of trading activities on the floor of the Nigerian Stock Exchange, the shares of Flour Mills declined by 6.9% to close at N28.85 per share, as investors sell off 5,029,161 ordinary shares of the company worth N143,009,264.10.

Shares of Honeywell at the close of trading activities today declined by 1.6%, while shares of Northern Nigeria Flour Mills remained unchanged at N7.02 per share.

The Consumer good index to which the Flour millers belong has fallen by 6.1% year since the beginning of February, compared to the Nigerian Stock Exchange All Share Index -5.17%.

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Business News

FG says Finance Bill 2020 will check inflation

The Finance Minister has stated that the reduction of import duties on vehicles will subsequently reduce transport fares and food prices.

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Power: Mambilla Power Project not prioritised by Ministry of Power for 2021 Budget - Finance Minister

The Federal Government has said that the Finance Bill 2020 was designed to reduce import duties on some commodities, including vehicles, thereby checking inflation.

This is as the Bill was part of measures to make transportation affordable, thereby reducing the cost of foodstuff across the country.

According to a report from the News Agency of Nigeria (NAN), this disclosure was made by the Minister of Finance, Budget and National Planning, Zainab Ahmed, while answering questions from State House correspondents in Abuja on Wednesday.

Ahmed explained that her Ministry advocated and got approval for a reduction in the import duties charged on vehicles precisely to check inflation trends.

READ: FG to withdraw $150 million from sovereign wealth fund, to borrow $6.9 billion

What the Minister for Finance is saying

The Minister expressed concerns over the inflation rate in the country, saying inflation was high at 16.7% and still inching up gradually over the last couple of months.

Ahmed said, “When you look at the components that constitute inflation in our country, the largest contributor is food inflation and … if you decouple it, the largest contributor to food inflation is the cost of transport.

“We now look at how do we reduce the cost of transport because we can’t give every Nigerian money to pay for their transportation fares. We figured that one of the good ways to do it is to increase the acquisition of mass transit vehicles and to reduce the acquisition cost of vehicles and tractors that are used for productive purposes like agriculture.”

READ: Nigeria to receive first tranche of World Bank’s $3 billion loan soon

She expressed optimism that the reduction of the import duties on vehicles, when fully operational, would boost mass transit activities and subsequently reduce transport fares and food prices.

She said, “So the reason why we reduce those duties is to reduce the cost of transportation.

”So, once this implementation takes full effect, we are hoping that we’ll be able to see more tractors coming into the country, more mass transit buses coming to the country, reducing the cost of transportation as a result, and also having an impact on food prices.

What you should know

  • It can be recalled that as part of its bid to introduce tax incentives in the face of the economic downturn caused by the coronavirus pandemic, the Federal Government in November 2020, through the signed Finance Bill 2020, proposed the slash of import duties for tractors, buses and other motor vehicles from 35% to 10% and 0% to further help cushion the socio-economic conditions in the country.
  • The Minister for Finance, Budget and National Planning had explained that the need to reduce food inflation figures through one of the causative factors of high production cost, which is transportation, inspired the bill.

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