The House of Representatives Thursday halted the planned movement of $35 million out of the Growth and Employment (GEM) Project fund to a parallel SME Investment Fund.
The approval for the planned movement of the amount was slated for Thursday, November 3. But the House said it should be stopped immediately.
The House, while adopting a motion by Mark Terseer Gbillah (APC, Benue), ordered the immediate stoppage of any process towards the consideration or approval of a new restructuring proposal for the creation of the SME Investment Fund.
The lawmakers urged the ministries of finance, industry, trade and investment, the GEM Project coordinator and the World Bank to maintain status quo ante on the project.
They also mandated the committees on finance, commerce and aids, loans and debt management to investigate the circumstances surrounding the implementation of the project, the number of beneficiaries so far, extent of involvement of consultants as well as inflow received and disbursements made.
The committees have four weeks to report back for further legislative action.
The lawmakers said the resolution became necessary in view of the barrage of allegations and infractions said to be perpetrated by the coordinator of the GEM Project.
The House said the GEM Project, which was conceptualized by the Federal Government and domiciled in the Federal Ministry of Industry, Trade and Investment was aimed at creating jobs and increasing non-oil growth through the empowerment of 4000 Small and Medium Enterprises (SMEs) across the country.
The implementation of the project was predicated on funding from the World Bank and the United Kingdom (UK) Department of International Development (DFID), with the latter providing a grant of £90m, while the World Bank would provide a concessionary loan of $160m domiciled in the project account at the Central Bank of Nigeria (CBN) under the supervision of Finance Minister, Kemi Adeosun.
Based on the Federal Government’s borrowing plan from the World Bank approved by the National Assembly in 2013, the project would run from June, 2013 to September, 2018.
However, the House said barely three months into the appointment of the project coordinator and with just about one year to the end of the project, the coordinator initiated the restructuring of the entire project and requested the release of an outstanding of $35m from the Federal Ministry of Finance for the creation of a parallel SME Investment Fund.
The new fund, to be managed by an independent private firm, which is to be registered with the Corporate Affairs Commission (CAC), is to dispense between $250,000 to $2m each to only 23 unidentified companies without government oversight or involvement, the House said.
The project currently has only 800 beneficiaries out of the 4000 initially proposed, the House said.
The House alleged that the project coordinator is "one of the two employees of African Capital Alliance, a private equity firm owned by the current Minister of Industry, Trade and Investment and who was engaged by the minister on this project and is being paid up to $4.9m a month instead of a capable civil servant in the ministry.
Despite lack of approval for virement from the legislature or recourse to the project steering committee, the lawmakers said, "the project coordinator has gone ahead to advertise for a fund manager and concluded plans with the World Bank and the Ministry of Finance" to proceed with the plan and its approval today, November 3.
This, the lawmakers noted, was in "disregard to due process and the Department of State Security’s advice to the Minister of Finance after investigating petitions against the GEM Project Coordinator to halt any disbursement of funds under this questionable restructuring plan where the country enriches a few individuals to the detriment of millions of Nigerians who would have benefited from the initial scope of the project."
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