Petition over N130bn Sukuk Fund Contracts: Ministry Denies Creaming Money to Generate Interest

By Seun Adams

The Federal Ministry of Works and Housing has said that its attention has been drawn to an allegation carried by 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 Director, Overseeing the Office of the Permanent Secretary, FMWH, Engr. Folorunso Esan, while debunking the allegation in a statement made available to the media, said the writer stated that the funds have been placed into accounts to generate interest “for the sole purpose of creaming off accrued interest….’

Esan, said: “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.

“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.

“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.

“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.”

According to him, 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 he added will further 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.

“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 channeled into more productive ventures.” 

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