Senate Committee Frowns on Lopsided Contract Payment

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Shehu-Sani

The Senate Committee on Local and Foreign Debts has frowned on what it described as lopsided payment to local contractors.

The Chairman of the committee, Senator Shehu Sani, made the remark when the Ministry of Finance and Debt Management Office appeared before the committee for their budget defence.

Sani expressed concern that the debt repayment to a contractor from a particular region of the economy was more than all others put together.

He further noted that there were complaints that some local contractors who executed projects recently were allegedly being considered for payment, while some who were owed for about 10 years were not considered.

He requested explanation from the Ministry of Finance on the criteria used in carrying out such payment.

“Budget defence is an integral part of the budgetary process and works by powers conferred by the constitution.

“It is to enable the committee to evaluate the performance of the previous year and peruse proposal of the current year,” the lawmaker said.

He asked the ministry to “submit documents on amount paid to contractors and comprehensive evidence and list of payment from 2016 to date and other payments made for the committee to study”.

Responding, the Minister of Finance, Mrs Zainab Ahmed, said in the 2018 Appropriation Act, a provision of N15 billion was made under the local debt and the ministry was able to pay about N5.4 billion to date and a total of 15 ministries, department and agencies(MDAs) had benefitted from it.

The minister, who was represented by the Permanent Secretary (Special Duties) of the ministry, Mohammed Dikwa, said the ministry was working hard to pay off local contractors.

“We have a balance of N8.4 billion, although the budget is still running. The balance is with us but we have not disbursed because we have to verify before paying.

“This repayment plan is dedicated to contractors who have N10 million and below and the total money expected to be disbursed for this category of contractors is about N34 billion.

“We have tried to work so as to reduce local contractor debts to boost economy and provide employment. We are determined to ensure all debt payments are verifiable and justifiable,” the minister said.

On her part, the Director-General of the Debt Management Office (DMO), Patience Oniha, said what was approved for the DMO in 2018 was N739.25 million.

Oniha said out of that, N453.76 was for recurrent expenditure, which formed the bulk of the appropriation.

“In terms of allocation for personnel, it is N391.05. For overhead, what was provided was N110.83 million and we received allocation of N64 million, which is about 58 per cent of what was provided for.

“A bulk of that has been spent. There is only a balance of N76,000 left that was mopped up. Capital expenditure N174.6 million and as at today no amount has been released,” Oniha said.

The director pointed out that the 2019 budget proposal was N697.31 million, which was a decrease from the 2018 appropriation.

She said the stimate for 2018 debt service was N2.8 trillion, adding that domestic debt informed about 70 per cent of the debt stock.

Meanwhile, the debt stock as at September 2018 was about N22.43 trillion for both domestic and foreign, she said.

On welfare of staff of the office, she said: “The DMO is one of those agencies that provide critical services and their welfare is in critical condition.

“The DMO, established in 2000, is benchmarked with Bureau of Public Enterprise(BPE) and BPE got increment in 2017 but our salary has not been increased.

“The Salaries and Wages Commission wrote to say they could not increase because the federal government says it has to conclude work on the minimum wage.”

She urged the Senate to intervene in the matter, which she said was long over due. (NAN)