#130BN 2022 SUKUK FUNDS: FMWH REACTS TO ALLEGATION. ..... Says Its A Blatant Misrepresentation And A Calculated Attempt To Smear The Name Of The Ministry

"At No Time Has The Funds For Payment For Any Project Been Domiciled In The Ministry." Engr. Folorunso Esan.

Following a petition to the Economic and Financial Crimes Commission, EFCC regarding allegations by road contractors of the non-payment of approved funds allocated to them by the federal government, the Federal Ministry of Works and Housing Development has come out to debunk the claims, describing the allegations as a blatant misrepresentation of facts and a calculated attempt to smear the name of the Ministry. 

The Federal Ministry of Works and Housing Development, in a statement signed by Engineer Folorunso Esan, the Director Overseeing the Office of the Permanent Secretary, stressed that, "It is pertinent to mention that the Ministry adopted the Sukuk model of project financing since 2017 and at no time has the funds for payment for any project been domiciled in the Ministry.

In what he described as a blatant misrepresentation of facts, pointed out that "SUKUK Funds are domiciled in the Central Bank of Nigeria (CBN) and are only released to the Ministry for payment after the necessary processes and approvals are obtained."

Below is the full text of the statement:

FOR THE RECORDS. RE: ALLEGATION ON:

*“N130BN 2022 SUKUK FUND: ROAD CONTRACTORS PETITION EFCC OVER NON-PAYMENT OF APPROVED FUNDS ALLOCATED TO THEM BY MINISTRY OF WORKS STAFF”_*

The attention of the Federal Ministry of Works & Housing has been drawn to the above allegation carried by Opera News an online publication which was sourced from The Street Journal of May, 16th 2023 wrongly accusing staff of the Federal Ministry of Works and Housing of refusing to disburse funds allocated for projects in the 2022 Sukuk Fund to Contracts. The writer further states that the funds have been placed into accounts to generate interest “for the sole purpose of creaming off accrued interest….’

2. This is a blatant misrepresentation of facts and a calculated attempt to smear the name of the Ministry. It is pertinent to mention that the Ministry adopted the Sukuk model of project financing since 2017 and at no time has the funds for payment for any project been domiciled in the Ministry. SUKUK Funds are domiciled in the Central Bank of Nigeria (CBN) and are only released to the Ministry for payment after the necessary processes and approvals are obtained. According to the operational guidelines for Sukuk projects, payments are made to contractors within twenty-four hours of the funds hitting the accounts of the Federal Ministry of Works and Housing. It is therefore, unfounded to imagine that any portion of the 2022 SUKUK Fund is warehoused in any bank with the expectation of yielding interest for any pecuniary benefits to officials of the Federal Ministry of Works and Housing.

3. You may wish to note that the Debt Management Office (DMO) approved the 2022 Sovereign SUKUK Funding of N110.00 billion for execution of sixty-three (63No.) projects across the country. The symbolic presentation to the Ministry of the cheque of N110.00 billion was performed on 6th February, 2023 in the Main Auditorium of the Federal Ministry of Finance, Abuja.

4. Prior to the presentation of the 2022 SUKUK cheque, the Ministry was executing the 2021 SUKUK Funding in the sum of N210.565 billion for the construction of seventy-one (71No.) projects in the Federal Ministry of Works & Housing and N10.435 billion for execution of five (5No.) highway projects by the Federal Ministry of Niger Delta Affairs which were transferred to the Works and Housing Ministry. The disbursement for payment of executed works in the 2021 SUKUK Funding in the total sum of N220.00 billion was completed in April, 2023. It is important to note that the disbursement of the 2022 Sukuk could not be run concurrently with that of the 2021 Sukuk as a matter of principle.

5. Upon completion of the payments from the 2021 SUKUK Funding, the Ministry commenced the collation and submission of Milestones to be achieved by Contractors under the 2022 Funding. The provision of Milestones by the Contractors, evaluation and approval by the Ministry and final no objection by the DMO is a necessary condition for the disbursement of Sukuk Funds. These processes take time and must be completed before any disbursement can be carried out. 

6. On completion of this process early May 2023 and in line with the commitment of the Ministry for payment of works executed according to the approved Milestones, the first (1st) Tranche Drawdown from the 2022 in the sum of N19.605 billion was forwarded to DMO. This will undergo a process of verification by consultants engaged by the Debt Management Office before payments can be approved and the CBN, through the Office of the Accountant General of the Federation, requested to release the funds for payment to the contractors. Subsequent Tranches would be forwarded to the DMO as the Contractors execute works in line with the approved Milestones and the works are verified, certified approved accordingly until the N130bn is fully accessed.

7. It is important to advise the general public to always cross-check their facts before going to the media in order to avoid unsubstantiated allegations and avoidable waste of tax-payers money for energies that should be channelled into more productive ventures.  

*ENGR. FOLORUNSO ESAN

DIRECTOR, OVERSEEING THE OFFICE OF THE PERMANENT SECRETARY.

FMWH*