- Surprisingly, the observed inefficiencies in government departments that previously supervised the nation’s debts which eventually led to the creation of the present day Debt Management Office, DMO, have since crept into the organisation with allegations of sundry financial improprieties flying all over the place
Debt Management Office, DMO established in 2000 to centrally coordinate the management of Nigeria’s debt, which was hitherto being done by a myriad of establishments, is fast becoming the country’s centre of scandals.
According to its website, DMO’s creation was aimed at achieving the following advantages:
“Good debt management practices that make positive impact on economic growth and national development, particularly in reducing debt stock and cost of public debt servicing in a manner that saves resources for investment in poverty reduction programmes;
“Prudently raising financing to fund government deficits at affordable costs and manageable risks in the medium- and long-term;
“Achieving positive impact on overall macro-economic management, including monetary and fiscal policies;
“Consciously avoiding debt crisis and achieving an orderly growth and development of the national economy;
“Improving the nation’s borrowing capacity and its ability to manage debt efficiently in promoting economic growth and national development;
“Projecting and promoting a good image of Nigeria as a disciplined and organised nation, capable of managing its assets and liabilities; and
“Providing opportunity for professionalism and good practice in nation-building, among several others.”
However, investigations on the above claims have proved otherwise as stated below:
Surprisingly, the observed inefficiencies in government departments that previously supervised the nation’s debts which eventually led to the creation of the present day Debt Management Office, DMO, have since crept into the organisation with allegations of sundry financial improprieties flying all over the place.
Although he has repeatedly denied the allegations, the man at the centre of the scandals and Director General of the Office, Abraham Nwankwo, has had his leadership accused of finance-related misconducts times without number.
According to a media publication that trended for a long while with no effective response from DMO, the Nwankwo-led leadership succeeded in converting some of the federal government bonds to personal cash now domiciled in private pockets.
Investigations carried out by an online news medium, revealed that Nwankwo lives a very discreet life, as a cover-up.
The agency which has vice president Yemi Osinbajo as its Board Chairman raised a bond of $2 billion two years ago but ironically spent over $200 million or 10 percent of the bond secured to pay faceless consultants, rather than use its own staff. It was gathered that whenever the organisation goes to the International Capital Market, ICM, to raise bonds, it would pay a lawyer hired outside the agency, about $700,000 as consultancy fees for the exercise.
Poor staff relations
The report also stated that in the entire agency, the Nwankwo-led management forbids any kind of workers’ union. It cited the case of a particular staff, Mantakari Loveth, who was allegedly made redundant by the DG and later sacked. She later dragged the agency to the National Industrial Court.
The DMO reportedly paid an external lawyer an eye-popping sum of N6 million to handle the case even before it began.
“One of the top management staff noted that it will take years for the new Board of Directors Chairman, Yemi Osinbajo who is the Vice President to find out about the corruption going on, as it has become a norm within the system, with secrecy as its watchword,” the media report stated.
In his reaction, the DG denied the report. His statement reads in part:
“These are entirely not correct for the following reasons:
Proceeds of all borrowings are received directly into the Federal Government of Nigeria, FGN’s Account at the Central Bank of Nigeria, CBN.
Thereafter, the proceeds are transferred by the CBN to the Consolidated Revenue Fund, which is an account managed by the Office of the Accountant General of the Federation on behalf of the Federal Government in line with statutory regulations.
The DMO did not issue any bond for USD2 billion. Therefore, the allegation that USD200 million was paid to consultants whether faceless or not, does not arise.
“The recent Eurobond issued by Nigeria was for USD1 billion and it was issued in July 2013. The Transaction Parties for the Eurobond and their fees were approved by the Bureau for Public Procurement, BPP, and the Federal Executive Council, FEC, in line with the Public Procurement Act (PPA), 2007. For the avoidance of doubt, it is not the responsibility of the DMO to decide the amount to be paid to the Transaction Parties. You may kindly wish to refer to the PPA for an understanding of how Transaction
Parties are appointed and their fees determined.
“For International Capital Market Transactions, the use of International Legal Advisers are a requirement for the purpose of documentation and compliance with regulations of the international markets amongst other reasons. The Legal Advisers are legal firms that are duly authorised and possess the requisite licenses and approvals to operate in the international markets. It is, therefore, not possible or permissible by the legislation and regulations of the international markets to use any lawyer within the DMO for this purpose.
“All Transaction Parties, including Legal Advisers for all of the DMO’s borrowing in the International Capital Market are appointed in line with the provisions of the Public Procurement Act, (PPA) 2007. For this purpose, the Parties and their fees are approved by the BPP and the FEC after a Competitive Bidding process in line with the PPA. They are therefore, not appointed by the DMO.
“Payment to all Transaction Parties of which Legal Advisers (“Lawyers”) are one, are made by the CBN directly to the account designated by the Transaction Parties in their Invoices. Therefore, the accusation that a payment of USD700, 000 consultant fees was made into the Director-General’s account is entirely false. Indeed it is not feasible to pay fees due to Transaction Parties to another account since such payments are made by the CBN in compliance with the approvals of the BPP and FEC,” said the DG.
In our determined efforts to further confirm the allegations, we made calls to both the DG, Dr. Abraham Nwankwo and DMO’s spokesperson, S. K. Abubakar to react to the allegations. However, they neither picked their calls nor responded to text messages. Nigerian Pilot recalls that Nwankwo had earlier debunked the allegations in some published reports describing them as frivolous.
However, a media aide to the DG reacted thus to Nigerian Pilot’s text message just before the close of production last night: “Thank you for reaching out to the DG. I appreciate your effort from the depth of my heart. I’m sure in your office you have a legal department and lawyers working there. But the moment a case affecting your organization goes to court the in-house lawyers don’t represent you.
“There is no issue about bonds. If you know how a bond market works, you will understand. DMO does not have account with any commercial bank. CBN is the issuing and receiving bank on behalf of the federal government especially when there is deficit in appropriation. That is when DMO comes in.”