A SURE Channel for Corruption

The implementation of the Subsidy Reinvestment and Empowerment Programme must first be purged of corruption before it can benefit the people, writes Ojo M. Maduekwe
 

There are reports that the idea by the federal government of rechanneling funds accruable from the partial removal of subsidy on petrol appears to have been lost in the implementation of projects under the Subsidy Reinvestment and Empowerment Programme (SURE-P).
While the plan remains laudable, the implementation, since 2012 when the Presidential Committee on SURE-P was initiated, is said to be fraudulent. The SURE-P was instituted to address the issue of corruption that be-devilled the petroleum subsidy regime. But, in many instances, the same corruption has been alleged to be frustrating the idea from succeeding.

Recently, the Centre for Social Justice (CSJ), released a report on SURE-P’s operation. According to CSJ, SURE-P, which was hurriedly designed to assuage the anger of Nigerians over the increase in the pump price of petrol, has fallen short of Nigerians expectation since its establishment.

Before the federal government increased the pump price from N65 to N97 per litre, subsidising petrol costs the government an estimated $8 billion a year. Government’s argument for the removal of subsidy was based on the plan to re-invest the said sum into beneficial, people-focused projects and also to get investors to build local refineries that’ll aid Nigeria becoming self-sufficient in the production of its domestic petroleum need.

For this purpose, the SURE-P has a fund domiciled at the Central Bank of Nigeria (CBN), and which is calculated through a template designed by the Ministry of Finance and Petroleum Products Pricing Regulatory Agency (PPPRA) and subscribed to by all stakeholders. In running the fund, SURE-P receives N15 billion monthly. This amount is the federal government’s 41 per cent derived from the partial subsidy removal, which the SURE-P Committee has been mandated to manage on behalf of government.

In sharing the SURE-P funds, the federal government gets 41 per cent, states and local governments get 54 per cent, while the remaining 5 per cent is reserved for Ecological Funds. The core activities of SURE-P are divided into two broad categories, namely; the Social Safety Nets and Infrastructure Development Programmes.

The money that is budgeted for the SURE-P programme to be administered by the committee is derived from the N32 which is the difference between the old pump price of N65 and the new pump price of N97. It is from this that the monthly allocation of a flat rate of N15 billion, which was last year criticised by the Senate House Committee on SURE-P, is gotten from.

As it stands, according to chairman of the SURE-P Committee, Lieutenant General Martin-Luther Agwai, SURE-P at the federal level has realised about N435 billion beginning from 2012 to August 2014. He said it when the committee held a press conference in Lagos. SURE-P’s 2012 budget was controversial. While the Ministry of Finance insisted that N180 billion was budgeted for the year, the SURE-P Committee said it received the sum of N164.9 billion.

Also, the Ministry of Finance said the sum of N93.5 billion was carried over to the following year from the 2012 budget but according to the CSJ report, “The SURE-P Committee said that it received the sum of N164.9b in 2012, implying a shortfall of N15.1b. If the sum of N72.44b was spent in 2012, the implication is that what should have been carried over to 2013 from the original sum of N180b would be N107.6b.” In summary, there is money missing, which the Ministry of Finance needs to clarify.”

Addressing Nigerians on the government’s decision regarding the removal of the subsidy on petrol, President Jonathan, in 2012, had said it was “either we deregulate and survive economically, or we continue with a subsidy regime that will continue to undermine our economy and potential for growth, and face serious consequences.”

The second point made by the president was that a deregulated economy was capable of transforming the country’s economy in a manner that would make for ensuring “transparency” and competitiveness in the oil industry. Ironically, the implementation of the SURE-P funds, most especially at the states and local government areas, has been lacking in transparency. The aim of initiating the scheme seems to have been defeated.

CSJ in its report said that, “While the SURE-P funds at the federal level can be said to have made appreciable impact and are visible, the implementation of the programme and utilisation of funds at the state and local government levels are not separately budgeted and accounted for. The funds simply go into the normal funds of the state and through the regular appropriation and expenditure process. This creates doubts about the propriety of the expenditures and what exactly it is spent on.”

In sharing the SURE-P funds, the federal government gets 41 per cent, states and local governments get 54 per cent, while the remaining five per cent is reserved for Ecological Funds. It should be recalled that last year, when N500 billion was alleged to have been missing from the SURE-P fund, the Minister of Finance, Dr. Ngozi Okonjo-Iweala, explained that the said amount was shared to the states and local governments.

There have been complains about missing SURE-P funds in some states. For instance, sometimes in June last year, the Kaduna State House of Assembly, accused the state government of dubious transactions in the implementation of the programme, alleging that N560 million belonging to the state SURE-P for 2012 was missing.

In its report, CSJ said that during field study of the programme, one major challenge it faced, when interviewing contractors, community leaders, project implementation personnel in MDAs and other relevant stakeholders, was the difficulty in accessing official information. “The custodians of the needed information still had the mindset of the Official Secrets Act.”

The CSJ report further reveals that the situation was worse in the states than at the federal level. “States were too secretive to provide any reasonable information. Essentially, FGN is miles ahead of states in the matter of releasing information on public finance management or on any other subject. The fact that states did not set a separate mechanism for the management of SURE-P funds made it impossible to track their expenditure.”

At the end of the report, some of the recommendations advanced by the CSJ for the SURE-P to succeed and not become a drainpipe are as follows: “All SURE-P funds should be released and cash backed as and when due to ensure continued and timely completion of projects. Carrying over of funds from year to year when there are outstanding claims by contractors and dearth of funds are delaying implementation of projects and are not in the public interest.

Also, it was recommended that, “The management of SURE-P through SICs should be separated and insulated from politics; technocrats with the right qualifications and orientation should be assigned to manage the funds and activities; states should consider replicating the federal example of specifically managing SURE-P funds differently from other state funds. They should also consider ring-fencing SURE-P funds to avoid its being mismanaged or mixed up with other projects. This will facilitate accounting for the funds and showcasing achievements.

“There should be an interface between FGN and state governments on activities to be funded with SURE-P funds. FGN should not be replicating activities and services that are already being provided by states and local governments. This is not only an unnecessary duplication but a waste of limited funds.

“All the Social Safety Net activities of SURE-P that involve individuals and communities getting benefits should benefit from enhanced transparency and accountability. Names, addresses and phone numbers of beneficiaries should be available on a public electronic portal. The exact location of projects should also be available on the portal.

“There should be quarterly report of activities, expenditures and achievements on an ongoing basis; SURE-P can benefit from enhanced transparency and accountability through regular public and media engagement with facts and figures of activities and achievements.”

As the federal government and all the SURE-P stakeholders seek to make the needed adjustments, there is the need not to politicise the programme. Currently, the composition of the committee has been skewed one side and favours supporters of the PDP. SURE-P has become a way to “settle the boys.” This bias, it appears, has affected the technical and professional composition of the Committees make up, especially at the state level; and at the end, the quality and success of the programme.