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INVESTIGATION: How Akwa Ibom State Government Spent N10 billion on Ghost Project

INVESTIGATION: How Akwa Ibom State Government Spent N10 billion on Ghost Project


By Ekemini Simon

The audited financial statements of Akwa Ibom State in 2015, 2016, 2018 and 2019 have revealed questionable spending under the Governor’s Office, the annual reports of the state’s accountant-general have shown.

A thorough analysis of the reports for the period showed that an item under the budget for the Governor’s Office tagged “Government Special Development Project” has been a conduit pipe for siphoning public funds by corrupt officials.

Although public funds have been voted and retired through this subhead, there is no known project on ground that show evidence and value for the billions of naira reported to have been spent.

Billions spent yet nothing on ground

In 2015, ₦2.708b was spent on this unknown project. In 2016, ₦1.842b was allegedly spent on the same item. Although this newspaper could not access the financial statement for 2017 fiscal year, findings showed that ₦3 billion was budgeted for the item. In 2018, the ₦3b which was the approved budget was spent. In 2019, there was 100 per cent project implementation, as the entire ₦3.06 billion appropriated for the project was expended. With the exclusion of the financial statement for 2017, the project gulped the sum of ₦10.61 billion in four years (2015, 2016, 2018, and 2019).

Efforts to know how much was expended on the project in 2017 through a Freedom of Information (FOIA) application to the Office of the Governor, Commissioner for Finance, and Accountant General were unsuccessful as they all did not respond. However, a source in the Government House who cannot be name due to safety concerns said the exact amount appropriated in 2017 for the project was retired at the end of the fiscal year. However, if the state government spent N3b on the item in 2017, it implies that between 2015 and 2019, ₦13.61 billion was expended on the project.

Akwa Ibom State Government fails to present evidence of project spending

Surprisingly, the Office of the Governor, Accountant General and finance ministry could not give explanation and provide evidence on how the money for the project was spent. The FOI request to them, which was greeted with silence, specifically requested for detailed information and documents on titles and locations of project called, “government special development project”, the list of bidders for the project, the name of the contractors and approval letters for the contracts.

Documents showed that these offices are culpable.  The project was captured in the state’s Appropriation Act under the governor’s office budget with the Accountant General disbursing the required funds under the supervision of the finance ministry. The Accountant General is responsible for safe keeping books of account, and ensures internal control procedures are maintained in order to safeguard the assets, detect and prevent fraud and other irregularities. A follow-up reminder sent to these offices at the expiration of seven working days provided for in the FOI Act got neither a response nor an acknowledgement from the MDAs till date thus raising suspicion that the opaque project is an outlet for poaching public funds.

The failure of the governor’s office, Accountant General and finance ministry to respond to the request follows an obvious trajectory –an awful trend common to most state government institutions in Akwa Ibom State. In particular, the governor’s office and finance ministry is notorious for ignoring FOI requests.

This trend made the Nigeria Union of Journalists (NUJ), Akwa Ibom State Council, issue a communiqué on September 30, 2020 calling on the state government to stop disregarding FOI requests. The communiqué noted: “Congress notes the consistent refusal of MDAs in Akwa Ibom State to provide certain information requested by journalists, thereby flouting the provisions of the Freedom of Information Act, and called on the MDAs to do the needful to avoid a resort to legal action to get the required information”.

Meanwhile, sources within government who craved for anonymity disclosed that the funds for the project have over the years been diverted. The source claims that the state government has chosen to use hazy description for this item in order to bleed state funds without raising suspicions.

More so, checks into state government executed project booklets show that there is no project executed in the state under that nomenclature. This newspaper went further to find out the reason why the spurious item found its way into the budget. When the Mail Newspaper contacted the Head of Budget Office, Mr. Otu Asuquo, whose office is tasked with preparing, coordinating, monitoring and facilitating the execution of the state’s budget policies, he declined comment.

 “This Office is under the Ministry of Finance. As a civil servant, I can’t speak on the matter. Please, channel all your questions to the Ministry of Finance,” he said.

Project funds used for emergencies- Commissioner for Economic Development

The Commissioner for Economic Development and Ibom Deep Seaport, Mr. Akan Okon, agreed that his ministry takes charge in deciding on capital projects that would make up proposed budgets when inputs are received from various Ministries, Departments and Agencies (MDAs). 

He noted that the item tagged “Government Special Development Project” is coined and designed to take care of emergencies in the state. “The item is for things that were never planned. There must be a buffer somewhere”, he said.

Explaining further, Okon said: “As the name implies, it is special. In each fiscal year, things come up. For instance, who would have known that we will have this level of crisis that we are having? How would Government have known to budget for it? So, things like this falls under it. Unforeseen events have to be taken care of. Like when policemen were killed and police station burnt down, the governor had to intervene. 

“There are certain projects which have to be in the Governor’s Office. Even in the Presidency, there is Government Special Development Project. It is not restricted to Akwa Ibom State alone.”

The commissioner argued that N3.060b spent in 2019 for the item is a paltry sum.

“N3 billion is not much for Government Special Development Project. A whole governor’s office!  Do you know what is involved in the Office of the Governor? Do you know the responsibility of the Governor? There are a lot of things the Governor does. If you are not there, you will be suspicious. 

“Take for instance, like last year, when Covid-19 struck, we needed to address it. It wasn’t planned for. If there was no provision for special project, what do you think we could have done?”

The argument canvassed by the Commissioner for Economic Development and Ibom Deep Seaport was been found to be misleading and incorrect. Experts on public finance and fiscal governance who appraised the item insist that the item is strange to principle of budgeting and cannot be said to represent provisions for exigencies.

A professor of finance at the Federal University, Otuoke, Bayelsa State, Prof Emmanuel Bush, said budgeting in public sector is guided by the mnemonic; R-PEACE. He explained that R is for Regularity, P-Publicity, E-Exclusiveness, A-Adequacy, C-Comprehensiveness, and E-Estimates.

Bush, offering explanation in context of the project noted that exclusiveness implies that items in the budget are not supposed to be ambiguous or confusing rather items have to be specific. “If you look at R-PEACE, is an opaque item allowed? Clearly no! You have to be specific. Someone cannot say I’m budgeting for something that is not in existence. You have to specify in the budget what you mean by special. The area of coverage must be clear.” 

He pointed out that instead of using cryptic item on the pretext of addressing emergencies, the law allows the government to make specific provision for emergencies in the budget. He also noted that budgeting in Nigeria is problematic because those who engage in budgeting do not have the requisite skills.

“A lot have corruption in mind from the onset. The special development project expenditure can be likened to collecting money to buy a car and without showing me the car you bought, you said you spent the money on emergency transport fare. 

“Meanwhile, when you collected money you did not specify the type of car you want to buy. That means we believe that you could, even at worse, buy an old beetle car. And now, you are not showing evidence of even a car tyre. That’s fraudulent. That’s misappropriation. That’s a criminal offense. How can you use money on something that was not budgeted? That’s misapplication of fund. We have misappropriation and misapplication of fund. Both are impeachable offenses,” he said.

Besides Bush’s explanation, the state has institutional provision for addressing emergencies through the State Emergency Management Agency (SEMA) which is domiciled in the Office of the Deputy Governor.

Further checks into the budgets and financial statements of the state revealed that there are numerous budgetary provisions and spending in the deputy governor’s office still on emergencies.  For instance, some of the multi-million naira items provided for emergencies in the deputy governor’s office in 2019 are purchase of equipment for emergency; security arrangement to crisis areas in the three senatorial districts; provision of cash/relief materials/ medication to victims of emergency cases in Eket senatorial district; research study on boundary crisis and emergency/disaster issues; post crisis management; intervention to pre-crisis situations; and disaster emergency warning signal dissemination among others.

Furthermore, Mr. Okon’s claim that the funds for Government Special Development Project are also used to take care of security personnel who may be affected in times of troubles is rather puzzling. Checks into the audited financial statement of the state for 2015, 2016, 2018 and 2019, showed that expenditure for security personnel among other security logistics were captured under “State Security Services Expenses” domiciled in Governor’s Office. For these four fiscal years, the sum of N43.42 billion was expended.

Again, Okon’s argument that the office of the President has budgetary provision for Government Special Development Project has been found to be faulty. A careful analysis of the 2015 through 2019 budget of the office of the President did not show provision for an item under the said appellation.

In addition, the commissioner’s defense that funds for Government Special Development Project was used to address the exigency of Covid-19 has been found to be erroneous. The world was yet to be plunged by Covid-19 during the fiscal years under the consideration of this investigation. Even then, in 2020, State House of Assembly reviewed the budget to accommodate inconveniences caused by Covid-19. Checks into the revised 2020 approved budget showed that about N3 billion was budgeted for capital expenditures on Covid-19 response under the Ministry of Health alone.

No-Go-Area for audit

Section 125 (2) of the 1999 Constitution as amended gives the Auditor-General of the State the responsibility to conduct preliminary oversight after government expenditures are presented by the Accountant General. The section states that: “The public accounts of a State and of all offices and courts of the State shall be audited by the Auditor-General for the State who shall submit his reports to the House of Assembly of the State concerned…”

Consequent upon this provision, this newspaper through FOIA request to the office of the Auditor-General specifically asked for detailed audit report of the project called government special development project with supporting documents on titles and locations of project, observations and recommendations with supporting documents on the cost of the project, observations and recommendations with supporting documents on the list of bidders for the project, and observations and recommendations with supporting documents on the name of the contractors and approval letters for the contracts. 

The Deputy Director (Audit), Mr. Isaiah Ntekim, responded to the request and asked that it be channeled to the MDA that has direct responsibility to the information requested.

“The responsibility of the State Auditor- General under section 125 of the 1999 Constitution as amended to date does not accommodate the above request. It is suggested that you kindly direct your request for information to any MDA that has direct responsibility as to the information required by you”. 

The excuse for not acceding to the request has been found to be evasive since the office in its yearly reports notes its observations and recommendations on MDAs found wanting in public transactions. Even so, when an institution refuses to give access to information applied for, the FOI Act 2011 gives the Auditor-General’s Office the obligation to state whether the information requested for exists. This was not done.

The Act in Section 7(3) states: ” Where the government or public institution refuses to give access to a record or information applied for under this Act, or part thereof, the institution shall be required to indicate under subsection (1) of this Section whether the information or records exists”.

Besides, if it determined that the information sought is domiciled with another ministry, the Act also gives the Auditor General the responsibility to transfer the request to the concerned ministry, not the journalist.

Section 5 (1) reads ” Where a public institution receives an application for access to
                   information, and the institution is of the view that  another public  institution has greater interest in the information, the institution to which the application is made may within 3 days but not later than 7 days after the application is received, transfer the application, and if   necessary, the information, to the other public institution, in which        case, the institution transferring the application shall give written  notice of the transfer to the applicant, which notice shall contain a  statement in forming the applicant that such decision to transfer the  application can be reviewed by the Court.” When the Deputy Director (Audit) was contacted and reminded that his office had breached the provision of the Act, he insisted that they stand by their response. “We stand by our response. The Auditor-General’s report is in the public domain, please access it”, he said. When he was informed that the newspaper has gone through the reports but has not seen an audit query on Government Special Development Project, he declined comment and said the office stands by their response to the FOIA request.

Analysis of the Auditor-General’s report from 2015 to 2019 revealed that there was no query on the item despite the fact that many other MDAs were fingered in doubtful expenditure, irregular expenditure, insufficiently vouched expenditure, salary over-payment among other irregularities.  A source at the Auditor-General’s office who cannot be named in this report for safety reasons disclosed that there is a conspiracy against the Auditor-General’s office which has made exposing fraud in Governor’s Office a no- go- area for them.

The source said: “This administration already feels the Auditor-General, Mr. Monday Akpan, has strong affinity with the immediate ex-Governor, Godswill Akpabio, which is why the office is underfunded so as to dampen its effectiveness in auditing.

“If some irregularities in the Governor’s Office are exposed, it may affirm the fears of this administration. Moreover, how do you expect us to carry out our audit effectively when we are not properly trained and funded?”

The information provided by the source is partly public knowledge. For instance, in Part V of the 2019 published Auditor-General’s report, the office complains of poor staff strength, accommodation problem, and lack of training for staff.

Part of the demand states: “The Government should, as a matter of urgency, approve the employment of more junior staff to enable the office function effectively. The State Auditor-General’s office is still confronted with accommodation problem. The office space of this rented building continues to be congested and inadequate for effective performance of work. Many officers do not have offices to work in, thus impacting negatively on staff morale and productivity.

“There is need for training and retraining of staff to keep itself abreast with the current changes in the Accounting Profession. It is hoped that His Excellency will approve the release of funds for this purpose in subsequent year.”

Analysis of the financial statements of the state shows that funding of the Auditor-General’s office nosedived under Governor Udom Emmanuel’s administration. For instance, in 2015 which was the year Governor Akpabio and Governor Emmanuel respectively served as Governor, the office received N920m as capital expenditure out of N1.9b budgeted.

It was a reverse when Governor Emmanuel took over fully in 2016. The Financial statement for the fiscal year shows that funding for capital expenditure dropped in the office of the Auditor-General to N35m out of N1.2b budgeted. In 2018, the office received N50m while in 2019 it received N50m.

 House of Assembly withholds oversight  

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When the Chairman, House Committee on Intergovernmental Affairs, Mr. Ifiok Udoh, was contacted by TheMail Newspaper to give an explanation on the level of knowledge and oversight carried out on the said project, he declined to comment. 

“Sorry, no comment”, was his response to the question posed. 

Meanwhile, the Chairman of the State House of Assembly Committee on Appropriations and Finance, Mr. Uduak Odudoh, whose committee has oversight powers on the Ministry of Finance, argued that it was not the responsibility of his committee alone to perform oversight on government’s expenditure. 

“My duty is primarily to work for budget passage. After that, various chairmen of committees would carry out oversight with MDAs that relate to their committee. However, I also work during quarterly appraisal.

“If you have any project you have doubt about, when we resume, the clerk will issue a letter, we will invite them and they will shed light on the project and we will go for an assessment.”

When contacted, the Chairman, Committee on Appropriations and Finance during the 6th Assembly (June 2015 through June 2019), Mr. Usoro Akpanusoh said he could not remember whether his committee undertook implementation appraisal on the said project. He, however, added that legislators cannot carry out their oversight responsibility on all projects due to paucity of funds and lack of cooperation by relevant ministries.

Yet, he argued that once the audited financial statement is submitted to the House of Assembly, oversight responsibility of the committee moves to the public account committee.

But the Chairman of the Public Account Committee, Mrs. Charity Ido, disagrees. She noted that oversight on the project is not the responsibility of her committee since the Auditor-General did not query it in his report to the committee.

“In 2019, there was no issue on the said item. When the Auditor-General note issues worth addressing, that is when it comes to my office for oversight. I only act on the report of the Auditor-General and not Accountant General’s report and Audited Financial Statements of the State.”

Regardless, sources within the State House of Assembly confirmed that most members of the House are aware that the project among other spurious items in the Office of the Governor and Secretary to the State Government are avenues to siphon public funds.

One lawmaker said: “There are consultants who assess the budget and Accountant General’s report. They see those things. When there was an opportunity and some lawmakers raised questions, just like in the case of the constituency project that came to fore last year, the governor said the funds were used to fund the party. And we are party men too. So, we are held by the balls. Although we know funding the party is only a front, we can’t argue with him. We can absolutely do nothing.

“If you push further and appear to be too wise, you will be blacklisted and you will be punished politically. Your constituents at home will tell you they did not send you to go and fight the governor. So, we simply keep shut and watch.”

Citizens must not ignore this nebulous spending- CSO

Meanwhile, Policy Alert, a Civil Society Organisation (CSO) working on fiscal justice, said that yearly spending on “Government Special Development Project” must not be ignored by citizens of state.

The Executive Director of Policy Alert, Mr Tijah Bolton-Akpan, said the amount of money that has been voted and spent year in year out on this project are huge sums that should cater for a lot of alternative socio-economic development priorities of the state like health, education, entrepreneurship among others.

Bolton-Akpan challenged the Akwa Ibom State government to stop using ambiguous name in its budget if it has nothing to hide.

“To hear that this item is for emergencies is worrisome. Emergencies have names. They are not anonymous. There are clear budget lines for emergencies in the budget. Such response doesn’t reflect thoroughness. It is important that government needs to take its citizens seriously. Sometimes the responses you get from state actors show they assume that citizens are clueless. But that’s very far from the reality,” he said.

Bolton-Akpan queried the role of the Auditor-General of the State whom he said his reports over the years have not been comprehensive in addressing questionable spending of the executive. 

He said where there are questionable budget items, it is the place of the House of Assembly to correct matters through their oversight role. Bolton-Akpan added, “Do we have any report from the House of Assembly that can tell exactly what these Government Special Development Projects are? We don’t have them. That means the House of Assembly has been wanting in its oversight role. 

“The successive report of Public Account Committee has remained watery to say the least. They don’t address effectively the queries raised in the Auditor-General’s report and even the gaps in the report.

“The House of Assembly has the power to summon anyone to give explanation on questionable issues and they also have the powers to demand for public documents. It is smack of indolence for a legislator not to take the extra trouble of getting documents to aid the report that is before its Committee.”

Curiously, even with the huge acclaimed expenditures on “Government Special Development Project” the state continues to struggle with alarming unemployment.

Recent data published by the National Bureau of Statistics (NBS) shows that Akwa Ibom is among the top 5 states plagued by high unemployment rate in Nigeria. In the second quarter and fourth quarter of 2020, Akwa Ibom State recorded 45.2% and 51.00% unemployment rate respectively.

Calls for the state government to disburse interest free loans or business grants to promising youths-led businesses has remained a top-burner issue in the state. Ironically, the state government complains of lack of funds to carry out the initiative among other crucial projects even as the Office of the Governor keeps retiring money unjustifiably through a nebulous budget subhead without direct impact on the masses and the state’s economy. 

* This investigation is supported by the John D. and Catherine T. MacArthur Foundation and the International Centre for Investigative Reporting

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