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Delta Steel Company: Dashed hope of a nation

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Sick workers, comatose firm, helpless stakeholders

Two years after the Federal Government handed over the Delta Steel Company (DSC) to Premium Steel and Mines Company Limited – a consortium of private investors – to revive the company and start production of steel for local and export purposes, the multibillion-naira outfit is yet to take off. YEKEEN AKINWALE, who visited the company situated at Owvian, Aladja town, Delta State, finds out that the company is still grappling with crises which look intractable

 

“Warri no dey carry last, na wetin we dey always talk, but for this Delta Steel Company matter, we don carry last,” quips Justice Iyasere, who looks towards the massive structure of the steel company with disappointment clearly etched on his face.

Although Iyasere, a community leader and local government chairman aspirant in Udu Local Government, is not one to give in to pessimism, he admits that it will take more actions than precepts to get the company running again – especially in the face of unending crises ranging from war by ex-workers, to huge debts to suppliers and threats from other interest groups.

Years of politicking, mismanagement and lack of interest by the Federal Government, he says, led to the collapse of what was once the pride of Delta State. If it were alive and running, Nigeria’s reliance on imported steel and aluminium products ought to have significantly reduced.

Its sales to Premium Steel and Mines Limited under the Federal Government’s privatisation programme, besides being opaque, is already a subject of litigation – communities hosting the company in Udu have instituted a law suit against Federal Government and Premium Steel and Mines Limited, to contest the sale.

At the moment, Nigeria spends N887 billion (about $4.5 billion) annually to import 25 million tons of steel and aluminium products. This is not going to end soon except steel plants such as DSC start producing steel locally.

In 1980, when the plant was established and inaugurated under the leadership of Fred Aghogho Brume, pioneer general manager, it was designed to produce one million tons of liquid steel per year. It never attained this maximum production output. Its best performance was in 1983, when it produced 500,000 tons. Since then, the plant has been aground.

“In 1985, the highest steel production a day was 23 heats in the whole of Africa and that year, Delta Steel was producing 21,” says Sam Agberhiere, one of its pioneer staff.

“If government is actually serious about steel making, by now we should have been one of the leading countries in the business. But the reverse is the case.”

From conception, DSC was designed to place Nigeria in the comity of manufacturing countries, particularly giving it an edge in the automobile sector. The Foundry Section, which earlier manufactured brake discs, drums and other parts for Peugeot Automobile Nigeria (PAN), Kaduna, has long been shut down.

“PAN in Kaduna was making order in 2002, 2003 and 2004. From here we made brake drums, engine blocks and other accessories in good quality,” says a former staff of the company who did not want to be named because of a running battle with the new management over unpaid entitlements.

The Phase II of the plant, designed to manufacture flat sheets for production of car bodies such as bonnets, car doors, roofs and booths, never took off. The natives who donated the land to government for the company to build the Phase II have reclaimed it.

“In one word, I’d say what killed DSCL is politics. They played politics with the plant. That’s why we have found ourselves where we are today. Warri don carry last here,” Iyasere adds.

Robinson Akpodovhan, retired manager, Shipping and Logistics at the plant, would also not spare government of blame. He says government did not effectively monitor the company.

“You cannot rule out the hands of government from the failure of the company,” he says. “Ajaokuta is over 40 years now and still grappling with construction, and it is also owned by the government.”

Truly, a desolate edifice of the company sandwiched by bush says much about its years of misfortune. Before now, the company supplied billets to Jos Steel Rolling Mill, Katsina Rolling and Oshogbo Rolling Mill. All three rolling mills are also dead.

 

Haunted by ex-workers, heavy debts, unseen forces…the face of a deserted plant

With a gun-wielding soldier and other private security guards manning the gate, a visitor without prior appointment will not have his way in. “Gaining access to the plant is not an easy task; you have to come back in two weeks’ time,” a security guard tells this journalist.

An insider says the new management of the company is haunted by aggrieved former workers who have vowed never to allow operation in the plant except their entitlements are paid. So, the main gate is under tight security against any unforeseen invasion by former workers. But its former owners, Global Infrastructure Holding Limited, is also laying claim to the company and indeed pressing to take it over.

 

Save for a few employees working on an excavation across the main gate of the company, there is actually no movement of heavy duty trucks that could suggest any activity going on in the company. No deafening sounds of iron casting coming from the plant or the razzmatazz that characterises a steel company.
It wears an old look, all the welcome signposts along the dual carriageway erected by the new management notwithstanding. Keen visitors get the impression of a company not working right from the corridor of the same highway.
The road was constructed purposely to connect the steel plant to the Warri Port, in order to enhance easy evacuation of finished iron products. But the road is not only deserted; it is dilapidated.
A trailer park a few kilometres away from the main entrance of the company that once served as the assembly point for heavy-duty trucks taking finished products is long gone; it has been taken over by bushes; no ancillary business along the road is visible. Business life of the area apparently died with the steel plant.
“As an A-Level student of Federal Government Warri, we were taken to DSCL on excursion; the noise there was deafening – noise of steel production and presence of heavy-duty trucks waiting to evacuate iron products such as iron rods, billets and other products were sights to behold,” recounts Onwuka John, a resident of Owvian.
“In those days, oil workers were resigning. I saw them join the steel sector. Many resigned from Shell to join Delta Steel because everything about the company was too attractive for anyone not to eye its workforce; housing estate, schools, football team and even hospital were owned by the company.
“No company impacted the lives of the Deltans like the steel company, but all that is history now,” he adds.
“It was operating three shifts and you need to see staff buses conveying workers from Steel Town for their shifts to the company. But now, the plant is just like a ghost town.”
The units within – harbour, Direct Reduction (DR) plant and the pellet plant, Lime Plant, Rolling Mill, Electric Air Furnace, and the Continuous Caster – are littered with wreckage and waste, while other auxiliary units of the plant such as the foundry, electrical and mechanical maintenance workshops and water supply system, have all been overtaken by elephant grasses.
Creating an impression of work in progress, however, are a few workers here and there strapping their safety helmets and putting on some dusty factory boots. But there is arguably no steel processing going on in the company.
Waiting for the promised facelift by the new owners, Premium Steel and Mines Limited, the brownish rusty bodies of the equipment and the broken-down or abandoned machines all over the place are relics of a dead giant.
In March 2017, a group of investors from the United States of America and Morocco were reported to have visited the plant, proposing a N600 billion investment to help revamp it – an indication that the new owners too might be in need of financial muscle to run the plant, like their predecessor, Global Infrastructure, which failed to turn it around.
But Victor German, general manager, Government and Community Affairs at the company, denies any such proposal from any investor. He says the Indian investors have both financial and technical abilities to operate the company.
This claim is already being contested. Ebhaleme Pius, a former employee of the company who worked there when it was sold to Global Infrastructure Holding Limited, says the management of Premium Steel and Mines, under the leadership of Prasanta Mishra, lacks not only the technical knowhow and financial muscle to run it successfully but also has no record of steel making.
“Those are not steel makers,” says Pius. “That’s why they are yet to manufacture a pin for the past two years. They cannot manufacture anything there because they don’t have experience in steel making.”
When its new owners took over in 2015, they promised to revive the comatose steel plant with N370 billion. Back then, with an established elaborate plan for the company’s revival with N70 billion in new investments in the first phase and N300 billion in the further phases, it looked like the company was going to have a new lease of life.
German admits that Delta Steel Company, as it is still called by the locals despite change of ownership and nomenclature, is still haunted by many known fears from disenchanted former workers who have vowed never to allow new investors take over the company until the N3.2 billion due to them is paid.
The workers are insisting that all industrial issues be settled, especially backlog of salaries and allowances, before the company can operate. German also confirms that the plant has been bogged down by demands of the former workers. “We met some rigid situations,” he says.
The basic reason the company has not resumed operations, according to him, is the delay in bringing the former workers on board.
“These former workers are waiting, but these issues of liabilities are also there. We have about 100 of them working with us now,” he says.“What we have been doing is trying to meet the demands of the former workers; those who worked with Global Infrastructure. You don’t just come and start work. They are asking for the payment of debts owed the workers.”
According to German, who is also a gas engineer, the management of the company is almost done with the resuscitation of its rolling mill, after which other sectors such as Steel Melting Shop (SMS) would be revamped. But there are arguably no signs that the mill will start work anytime soon.
“We are resuscitating the rolling mill, we are going to buy billets or get them from outside the country,” he adds.
Pius says the steel plant management will not succeed by revamping the rolling mill first because “Delta Steel Company is an integrated plant”.
“You can’t revive the rolling mill that ought to come last in the line of production first. It must be the last stage after they might have revived units like SMS and others. They can’t operate that plant; it is not a rolling mill.”
He alleges that the Indian investors have different plans for the plant. “They want to convert the building to a rice depot or a hotel,” he says. “You know they are Vaswani Brothers and we know their history in this country. They converted Volkswagen to rice depot.”
The payment of some debts by the Asset Management Corporation of Nigeria (AMCON) in April what was needed for the management of Premium Steel to gain access to the plant and commence its resuscitation.
“We started that April this year and we have gone far. We are almost through with the rolling mill. One hundred and sixty workers are going to be employed for the rolling mills when it is operational,” says despite all these commitments, the management of the company still has a lot of bridges to cross. A case before a Federal High Court, Warri Judicial Division, by Udu community, might be a major huddle to cross.
The host community says the details of the transaction between PSML and Bureau of Public Enterprise (BPE), which gave the company to the new investors, was not made open.
“We do not know the extent of purchase; we do not know what AMCON sold and what they didn’t,” says Sam Odibo (Otota), Prime Minister of Udu Kingdom.
The communities claim they are stakeholders, having been allotted 22 million ordinary shares in the company, representing 10 per cent of its total shares at its privatisation.
Part of their complaint, according to Odibe, is that the Federal Government has continued to shut them out in the privatisation process while dealing with the assets of Delta Steel.
“When BPE concessioned the company some years back, the community did not even know that they had some percentage to be paid because the Indian company, Global, ran the place solo,” he says.
“We say no; we want to know what they sold to you because AMCON sold what was used to borrow money from the bank. Did they reserve anything for the community or is it that they sold everything in spite of huge expanse of land the Federal Government took from us in the name of national interest. But we believe that the Federal Government would not be stupid to sell everything off.”
Before heading for court, the host communities said their efforts to get both the BPE and the AGF to account for the privatisation process were shrugged off. Now, they want the court to declare that they are entitled to 22,000,000 ordinary shares, representing 10 per cent of the total shares of Delta Steel Company, and that both the BPE and the AGF have no right, power or authority whatsoever to sell or transfer to Premium Steel either directly or through any of the agents of the Federal Government, more than 80 per cent of the shares of Delta Steel.
The court, they argue, should also declare any purported sale and/or transfer of more than 80 per cent of the shares of Delta Steel to Premium Steel by the Federal Government, null and void.
“AMCON is done on the matter; they are not talking to us, same way nobody talked to us in the previous deal that allowed those Indians to run the place aground,” says Odibe.

•Akinwale is a snr investigative reporter, ICIR, Abuja

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Exposed! Nigeria’s Deputy Speaker in N1.1bn water contract scam (II)

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In conclusion of this two-part story, MOJEED ALABI reports the details of the contract scandal involving the Deputy Speaker of the House of Representatives, Hon. Lasun Yusuff, who secures contract award from the same government he serves

 

Whereabouts of Nur & Company Nigeria Limited unknown
                                                      
Unlike the Sabbyn Nigeria Limited, it was easier for the camel to pass through the eye of a needle than for our reporter locating the whereabouts of Nur and Company Nigeria Limited. For a company that handled two out of the three projects at combined sum of N1.1 billion, it has neither website nor social media account. At the projects’ sites, the company fails to put up any signpost indicating details of the contracts, the contractors, among other necessary information, as required by law.
                                                      
New Telegraph reporters arrested
On Thursday, February 1, 2018, when our correspondent visited Plot 8, Impressive Close, off Dosumu Street, Agidingbi, Ikeja, Lagos, which Nur and Company Limited quoted as its office in its documents with the contract awarding agency, the guards on duty at the house said there was no company with such name within the compound.
While our reporter, accompanied by his colleague, Mr. Stanley Ihedigbo, was attempting to gain graphic evidence, the security men accused him of taking photographs of the house without authorisation, and got him arrested by policemen.
The owner of the building, who was later identified as Mrs. Dupe Dare, and from whose company – Impressive Chemicals – the street’s name was derived, immediately ordered that the reporters be taken to the Alausa Police Station, where they were subjected to embarrassing scrutiny.
The visibly angry Dare had told the police that she suspected the reporters were members of an unnamed syndicate, which she claimed, had fraudulently used her property to secure loan from two banks without her consent.
In her narrative at the station, Dare said sometimes in 2015, agents of Skye Bank Plc., security men and court bailiffs, had besieged the property, chasing out all her tenants and employees on the allegation that the house was used to obtain a N660 million loan in 2012 without repayment.
“I was shocked to my marrow because I never banked with Skye Bank, and had never taken any loan. For more than six months, we were in court, with my lawyer, Mr. Femi Falana, in charge of the matter,” she said.
Amid sobs, she further narrated her ordeal to both the Divisional Police Officer in charge of the station, Superintendent of Police Bakfur Kyes, and the Divisional Crime Officer, Deputy Superintendent of Police Johnson Domchak.
“I was told the fraudster had taken contracts from government in 2012 and needed money to execute them. So, that year, the bank claimed the individual had approached it, using fake version of my property document to secure the loan. The pressure was so much on my family that my mum could not bear it as she died same year.”
She said after about seven months of court processes, and following presentation of the property’s original documents, the court ruled in her favour, and the premises were reopened to her in 2016.
                                                          
Another bank lays claim to the property
The embattled property owner, who refused to reveal the identity of the individual or company illegally using her property to secure loan, added that in 2017, another financial institution, again emerged with another court judgement to gain possession of the property.
The troubled Dare said: “And this time it was Heritage Bank Plc. The bank claimed that before it acquired the defunct Enterprise Bank Plc., the suspect had taken a loan of about N70 million from the defunct bank, which he or she failed to service.
“Up till this moment, I cannot fathom why my property should remain the target of such fraudsters, and the way these people came to take photograph of my house, I learnt, was also how those fraudsters kept using the pictures of my property to secure loan. In fact, we are still in court over this.”
Based on this narration, Dare urged the police to charge the reporters to court to unravel the “real reason” for visiting her property.
However, after many hours of interrogations and cross-examinations, the police granted the reporters bail with the newspaper’s Crime Editor, Mrs. Juliana Francis, standing as surety, with instruction that they must return to the station on Monday, February 5, for further interactions, which they surely did.
 
Banks respond to enquiries
When contacted, the concerned financial institutions, which confirmed the development, however, failed to disclose the details of the transactions, claiming it was a confidential matter between the banks and the customers.
In a text message to our correspondent, the spokesperson for the Heritage Bank, Mr. Fela Ibidapo, had written: “Many thanks for your earlier text. Unfortunately, you would agree with me that the information sought is confidential between the bank and the customer, particularly as per pre-signed contract.
“Thus I ask that you permit me to decline any comment in this regard. Nonetheless, please let me know if I can assist in any other way.”
However, when our correspondent reached out to the Head of Information Unit of Skye Bank Plc, Mr. Nduneche Ezurike, he was directed to meet his colleague, Mr. Rasheed Bolarinwa, who, many weeks after messages had been exchanged, could not give definite response.
                                                                  
Nur & Company Nigeria Limited Officer declines comment
Sometimes in February, the Ogun-Osun River Basin Development Authority made available to New Telegraph mobile telephone number of a representative of the company, who the newspaper later identified as Mr. Ebenezer Famgbebe, an engineer.
When called on the phone, the engineer, upon the introduction of our correspondent by name, had mistaken him for another member of the House of Representatives from Osun State, Prof. Mojeed Alabi. He immediately showed courtesies, but was astonished to learn that the caller was another person entirely.
He confirmed his relationship with the company but declined to make further comments on all the questions asked including the location of his company’s office.
To all these enquiries, he responded: “Please, I cannot say anything about our projects. Ogun-Osun River Basin is our client and I don’t have any mandate to talk to you. I cannot also tell you our office. Go to Ogun-Osun, you will get whatever you want there. Thank you!”
That was how Famgbebe ended the call.   
 
Corporate Affairs Commission spills the beans
This rather unusual development compelled New Telegraph to apply to the Corporate Affairs Commission (CAC) through a lawyer, request for the company’s details as part of efforts towards ascertaining its authenticity.
On February 12, the CAC released the result of the search conducted listing the company’s shareholders as Mr. Yusuff Sulaimon Lasun of 3, Sarumi Street, Orelope Bus Stop, Egbeda, Lagos; Yusuff Olamide Ayomide, Yusuff Gbemisola Feyisara and Yusuff Omowunmi Rasheeda, all of the same address, as above who New Telegraph found out are the deputy speaker’s wife and children.
It further listed the four individuals as the company’s directors with the addition of Oladimeji Ayodeji Yusuff, with the same address, as the fifth director.
Meanwhile, in another document supplied by the CAC, Mr. Yusuff Rafiu Olalekan, who New Telegraph found out to be the deputy speaker’s immediate younger brother, was listed as a director of the company. His quoted address was, Investment House, 2nd Floor, 21/25, Broad Street, Lagos State.
However, in a message addressed to the CAC in 2011, the company conveyed the decision of Mr. Yusuff Rafiu Olalekan to resign as one of its directors, and the appointment of Olamide Ayomide Yusuff, Gbemisola Feyisara Yusuff, Oladimeji Ayodeji Yusuff and Omowunmi Rasheeda Yusuff, all as directors.
A copy of Mr. Rafiu Olalekan Yusuff’s resignation letter, which was attached, was dated April 12, 2011, with the company’s address quoted as Investment House, 2nd Floor, 21/25, Broad Street, Lagos State.
                                                               
Efforts to get deputy speaker’s reaction proved abortive
Through the Special Adviser (Media) to the deputy speaker, Mrs. Lara Owoeye-Wise, New Telegraph made spirited efforts to get the reaction of the parliamentarian but all efforts yielded no fruit.
On January 10, when our correspondent visited the National Assembly, neither the deputy speaker nor his special adviser was on ground. Mrs. Owoeye-Wise then suggested that a copy of the letter should be photographed and sent to her via WhatsApp which the correspondent did as instructed.
After waiting patiently for days without response, our correspondent sent a text message to Owoeye-Wise on January 22, for follow-up and she replied via a text message thus; “I’ll give you a response tomorrow, unfailingly. Thank you.”
On January 25, she sent another message, saying; “The Chief Press Secretary (CPS) said he had reached out to your editor. That is what he said when I discussed with him yesterday. Thank you.”
On January 26, Owoeye-Wise advised our correspondent to recompose his message and resend to her via her WhatsApp, promising to forward same to the deputy speaker directly and provide the feedback in less than 24 hours.
Our correspondent’s message had read: “Good morning, Aunty Lara and thanks a lot for your efforts. As a follow-up to my last discussion with you concerning the FoI request letter from New Telegraph Newspapers over the mini-water schemes in Ila Orangun, Ipetu-Ijesha and Ife-Odan, I write to let you know that we are yet to get any response like you promised.
“Recall you said you would discuss with the CPS and that he would contact me after you asked me to make my request official. If you recall ma, I sent the letter to you on January 10 but by Thursday January 11, I received a call from someone who later identified himself as Mr. Wole Oladimeji and CPS to the DSP (Deputy Speaker). He told me the DSP knows nothing about the project but I simply advised him to discuss with the DSP first. My Editor, Mr. Ayodele Ojo, told me same person called him and that he was the one who directed him to me. Since then, neither my editor nor myself, has received any response, either in written or verbal form, until I reached out to you again and you told me the CPS had contacted my editor. Your sms, which claimed my editor has been contacted by the CPS was not only surprising to me but also to my editor.
“However, further investigations have revealed the DSP is linked to one of the companies that handled the projects, especially those of Ife-Odan and Ila-Orangun, that is; Nur and Company Nigeria LTD. All we need is a clarification ma. The other people involved have given their own side of the story ma. Thank you very much ma as I await your intervention to get an official reaction from the DSP.”
Till date, New Telegraph is yet to receive any response from the office of the deputy speaker.         
 
Other National Assembly members kick
Two months after the inauguration of the projects, and precisely in April 2017, some members of the House of Representatives, who said they were inundated by complaints from the beneficiary communities, had embarked on a tour of the three projects to ascertain the authenticity of the people’s claims.
The House of Representatives Caucus comprising Mrs. Ayo Omidiran from Ayedaade/Irewole/Isokan Federal Constituency; Mr. Yinka Ajayi, representing Boripe/Ifelodun/Odo-Otin Federal Constituency; Mr. Gafar Amere, representing Ayedire/Iwo/Ola-Oluwa Federal constituency and Mr. Ajibola Famurewa of Atakunmosa East/Atakunmosa West/Ilesha East/Ilesa West Federal constituency, visited the locations.
According to Famurewa, officials of the Ogun-Oshun River Basin Development Authority and two representatives of the state Water Corporation were part of the inspection tour.
He told New Telegraph that prior to the inauguration, apparently frustrated by the slow pace of work at the sites, the members of the National Assembly had in 2016 petitioned the Economic and Financial Crimes Commission (EFCC) to report suspected foul play, even after all the budgeted funds had been released to the contractors.
“But rather than inviting us, we never heard anything from the EFCC till date. The only thing we noticed was that the contractors returned to the sites in a surreptitious manner,” Famurewa added.
When New Telegraph approached the EFCC for details of the matter, its spokesperson, Mr. Wilson Uwujaren, demanded an acknowledged copy of the petition to locate the exact unit of the anti-graft body handling the matter. But none of the petitioners could provide a copy.
Meanwhile, Senators Babajide Omoworare and Olusola Adeyeye denied complicity in the matter, saying it was unfortunate that the projects were poorly handled.
Adeyeye said: “Personally, I had suggested that we fixed Ojutu bridge in Ilobu but eventually the governor said we should do water. And to do water, none of us could singlehandedly fix the water and so we decided to have three mini-water schemes across the three Senatorial Districts.
“It was Lasun that was given the assignment to link up with the Ogun-Osun River Basin Development Authority for the execution. You know very well that I am neither an engineer nor a contractor. So, when they claimed they had finished it, honestly I thought they had finished, it was later on that we heard that the thing was not working and that the people had done a very shoddy job. I am told that some members of the House of Representatives have written a petition to the EFCC to look into it.
“Let me tell you, the crisis on the matter, I should not intervene for now, because if I do, I will make things worse. Let them handle it because in the end, it is the people that would be the beneficiaries. But if in the end they sweep it under the carpet, it can be very dangerous for them. The man, who supervised it at the Ogun-Osun River Basin Development Authority, came into my office and he was crying. But I drove him out. I told him that if he had been given a project and he didn’t do it well or he awarded it to a fraudulent contractor, he should go and fry in his own smoke.”
In a similar vein, Hon. Omidiran also distanced herself from the allegation of fraudulent practices in the execution of the projects, saying she was saddened by the development.
When contacted, the duo of Senator Mudashiru Hussein and Honourable Rotimi Makinde, who had failed to win their re-election bid, said since they are no longer in the parliament, they could hardly give any information on the matter. They directed our correspondents to the incumbent members of the parliament.
 
Procurement Laws bar public officers from taking government contracts
An officer of the Public and Private Development Centre (PPDC), a non-governmental organisation, focused on procurement monitoring, Samuel Offia, has explained reasons government officials are banned by law from taking government contracts.
According to Offia, towards promoting transparency, fairness and accountability, and to avoid unholy interference in procurement processes, Sections 58 and 59 of the Public Procurement Act 2007, forbids public officials from participating in or awarding contracts.
Citing specific laws, Offia said: “Part 5 (VI) that is, from Section 25 down to Section 38 of the Public Procurement Act 2007 provides for the steps, conditions/due processes to be followed in award of contracts. So contract offence(s) are clearly itemised in Section 58 of the Act. 
“One of the ways we can curb this menace of corruption rubbing our nation is to have the system open at all times, and by so doing, citizens will get to know what is being done or was left undone and then ask questions at every stage of the process.”    
 
Constituents should recall representatives –SERAP boss
The Executive Director of the Socio-Economic Rights and Accountability Project (SERAP), Mr. Adetokunbo Mumuni, has described as an impeachable offence the use of companies belonging to public officials to execute government contracts.
In an interview with New Telegraph, Mumuni said the rot in the National Assembly could be stopped when the people show concern about how they are governed and they realised their power to determine the fate of elected officers.
He said: “If the allegations are found to be true, it is enough for the constituents to initiate recall process and seek for prosecution of the concerned representative(s).”
 
•This is the concluding part of an investigative budget tracking report with the support of Macarthur Foundation and the International Centre for Investigative Reporting (ICIR)

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Exposed! Nigeria’s Deputy Speaker in N1.1bn water contract scam

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Communities cry over shoddy projects

 

After about four months of investigations, New Telegraph’s reporter, MOJEED ALABI, exposes the corrupt practices in the execution of controversial N1.7 billion mini-water schemes in three communities in Osun State by members of the National Assembly, including the Deputy Speaker, Hon. Lasun Yusuff

 

On Friday, January 5, the sun was fierce and scorching in Ife-Odan, a nascent community in the West Senatorial District of Osun State.

Ileri-Oluwa Oloyede, an SS 2 student of Faith Foundation College, Ife-Odan, had just returned from market where she had helped her mother in her palm oil business. But the 16-year-old girl still had one more chore to do; to fetch water for the urgent need of the household.

Considering the stress she had gone through at the market, Ileri-Oluwa’s parents advised her to wait till sundown. But the longer she waited, the more difficult her chances of getting water became and the longer it would take the family to prepare dinner.

“If I wait for the sun to go down, many more people will be at the well, and that would worsen the situation. And if the crowd becomes uncontrollable, the landlord may lock his gate and drive us out,” she said.

Thus, while the sun was yet to finally recede, Ileri-Oluwa and her younger sister, Florence, hit the road for a three-kilometre trek in search of clean water at the nearest well.

It is the same story for Michael Adeoba, who was also on the road, almost at the same time, with his father’s motorcycle to fetch water into some 20-litre jerrycans.

Adeoba, who had battled to get the motorcycle started, apparently due to some mechanical faults, decided to push it to a nearby mechanic workshop for a quick fix before going for the water.

He said: “This is what I go through every other day. Whenever I am on holiday, I always dread this experience. In fact, it is more of punishment than chore.”

The experiences of both Ileri-Oluwa and Adeoba reflect the pains and pangs of the people of Ife-Odan in their efforts to access clean water.

The situation is similar in many communities in the agrarian state, particularly during dry season when many wells and streams are dried up and public water supply is scarce due largely to poor electricity supply.

Addressing this perennial challenge was the concern of 12 parliamentarians, who represented the state in the National Assembly between 2011 and 2015, comprising three senators and nine House of Representatives’ members.

The federal lawmakers, who were elected on the platform of the defunct Action Congress of Nigeria (ACN) before the party merged with others to form the ruling All Progressives Congress (APC), had pursued common agenda, apparently towards fulfilling their party’s campaign promises.

One of them and now the Chief Whip of the eighth Senate, Prof. Sola Adeyeye, representing Osun Central Senatorial District, told New Telegraph that the senators and the nine members of the green chamber had agreed to facilitate the execution of joint projects in the state, through the National Assembly’s Zonal Intervention Projects (ZIP), otherwise known as “constituency projects.”

Therefore, when the 2012 budget was being prepared in 2011, they agreed to jointly facilitate the construction of a mini-water scheme in each senatorial district.

But Adeyeye’s original plan for his district, he claimed, was the reconstruction of the narrow Ojutu Bridge in Ilobu, headquarters of Irepodun Local Government Area. However, this position was overruled by Governor Rauf Aregbesola, “who said we should do water.”

“But none of us could singlehandedly fix water, so we decided to have three mini-water schemes across the three senatorial districts,” Adeyeye added.

After a careful study, Ife-Odan was chosen as the beneficiary community in Osun West; Ipetu-Ijesha in Osun East, and Ila-Orangun in Osun Central Senatorial District, for the construction of the mini-water schemes.

As captured in the 2012 Appropriation Act and contained in the South West Geo-Political Zone Mapping of Capital Projects by the National Assembly Budget and Research Office (NABRO), a total sum of N1,666,666,668 was budgeted for the projects at the rate of N555,555,556 for each.

But according to Ogun-Oshun River Basin Development Authority (OORBDA), the contract supervising agency, it eventually awarded the Ife-Odan scheme at the sum of N538,412,653.06; Ila-Orangun at the rate of N539,128,429.13 while N541,193,861.23 was approved for Ipetu-Ijesha project. Thus the new total sum released for the project stood at N1,618,734,943.47.

There was also additional budgetary allocation of N100 million each for the three mini-water schemes in the 2013 budget proposal but there was no evidence that the money was released.

Projects excite communities

When the beneficiary communities received the news of their selection for the location of the projects, they heaved a sigh of relief that potable water would no longer be a luxury.

According to the Risapetu and Regent of Ipetu-Ijesha, High Chief Ayodele Olayinka, some government representatives had approached the community’s palace on a Sunday in 2012, and demanded a parcel of land for the location of the project.

“We told them to wait till Monday but they insisted they needed to start that same Monday. Though Kabiyesi was still alive then, he was already very old. So, with two other chiefs, we  went there, and gave them the site. We were very elated and anxious to see the project commenced,” the chief explained.

He said true to their words, the contractor resumed to the location on the appointed Monday and began with the clearing of the bush.

“We were then visiting the site on a regular basis, at least, to show solidarity and support,” the chief added.

The experience was more exciting in Ife-Odan, where the government’s dam, created many years ago from Sekunrebete stream, which supplies water to the community and its environs, had been facing a series of challenges, including theft of its generator.

According to an officer of the state Water Corporation and the dam’s Superintendent Officer, Mr. Adeyemi Oyekola, who reluctantly spoke to New Telegraph, apart from the power issue, the dam was enough to serve the community.

He said: “In fact, there is no point bringing up a new water scheme. What this place needs is just a good generator, and repair of some of the machines and the reticulation networks, then, the community will be good for it.

“The major challenge here is power because the voltage is always low and cannot power the pumping machines.”

Thus, the desire to see the water scarcity problem addressed and the prospect of job opportunities at the site for the youth of the community inspired a farmer, Mr. Azeez Moradesa, to donate about four plots of land for the project.

The parcel of land is part of Moradesa’s inheritance and located beside his house at Araromi area of the town, which is less than two kilometres to the crisis-ridden dam.

He said: “So when they started the construction, I was employed as the security guard by the contractor. They were paying me N20,000 every month.”

Similarly, a former student of the Osun State College of Education, Ila-Orangun, AbdulKadir Oladosu, who was in year one when the construction work started at the Ila-Orangun site in 2012, said the students, in particular, were excited, “due to the suffering we were going through to get water.”

Inauguration of uncompleted projects

Five years after the projects were initiated, in February 2017, the Ogun-Osun River Basin Development Authority (OORBDA), having allegedly certified the contractors for jobs well done, held a symbolic inauguration at the Ila-Orangun plant, and handed them over to the Osun State government, through its water corporation.

Though, the inauguration took place at Ila-Orangun, the documents and keys to the other two projects were also handed over to the state government. Thus, by this handover, New Telegraph learnt, it became the responsibility of the corporation to manage and operate the facilities for the benefit of the people.

Projects dead on arrival

Six years after people’s hope had been raised, New Telegraph’s investigations revealed that the projects have failed to ameliorate the water scarcity the communities face. In Ife-Odan the massive water plant erected by the contractor is yet to produce a drop of water.
When visited by our correspondent, the facility had already been overtaken by weeds and cobwebs, without anyone found in the compound.

The guard, Moradesa, who, apparently was disappointed by the turn of events, was not on hand to conduct our reporter round the facility. But his son, Joseph Moradesa, who did, was not impressed by the development.

When he eventually spoke to our correspondent, the guard expressed regret that six years after the project was initiated, there was yet to be water for the people at the plant.

Moradesa, who spoke in Yoruba language, said: “Even as the guard, since February 2017 when the place was transferred to Osun State Water Corporation, my salary has been reduced to N15,000 and I received the last one in October 2017. What pained me most is that this place is already abandoned and the purpose for which I donated the land may have been defeated.”

Also speaking, a palace chief, the Obajio of Ife-Odan, Chief Amoo Adegbite, expressed regret that the people’s hope had been dashed by the alleged poor handling of the project, saying the whole community was disappointed after so much expectation.

Adegbite said; “Many of us had thought what they wanted to do was to connect the dam and make the water supply easier. But we were surprised when they started digging borehole just few kilometres away from the dam, and we were worried that it might turn out to be a wasted effort due to our experiences with boreholes here.”

Son of a late traditional ruler of the community, Prince Gbade Morenikeji, who had visited the town for the New Year celebration, said one of the reasons the community voted against the return of one of the 12 representatives, Senator Mudashiru Hussein, was largely due to the abandoned water project.

Morenikeji, who works with the Federal Ministry of Industry, Trade and Investment, noted that following the death of Senator Isiaka Adeleke, Hussein had been represented by the ruling party, the All Progressives Congress (APC), for the rerun election, “but because the water project he had facilitated to the community during his first term was seen as a scam, the people said, no way.”

Meanwhile, the superintendent at the community’s dam has revealed that with the construction of the water scheme, the pipes laid from the dam to the community had been destroyed by the contractor. He said: “Even if there is power supply it will be difficult to supply water because of the damage done to the pipes when they were laying their own pipes.”

In the same vein, at Iloro area of Ipetu-Ijesha, just a few metres away from Grammar School Road, location of the community’s own water plant, an ND I student of the Federal Polytechnic, Offa, Kwara State, Aduragbemi Idris, was guarding jealously a padlocked well.

She denied knowledge of any public water scheme in the neighbourhood, saying her uncle and owner of the house, reluctantly locked the well because of the pressure from the public.

Similarly, the Regent was livid with anger, as he showed our reporter his well within his own compound.

Chief Olayinka explained: “When they were laying the pipes, they fixed them in the wrong side and I told them that the side would not be good for the pipes due to the telegraphic poles. They didn’t take my advice, but after they had laid the pipes for about a month, they heeded my advice and moved to the other side. Later, we didn’t see them again.

“So, people are back to the streams as it was the practice in the olden days. We are just lucky that our people are not affected by water-borne diseases. Of course, it is now an abandoned project, and that is sad. This is because some of the ‘honourables’ (National Assembly members representing the state) who started the project are no longer in government. The new ones are now embarking on new projects individually, which are also already being abandoned.”

But when New Telegraph visited the plant at Ipetu-Ijesha, a security guard on duty, Mr. Adeleke Faleti, explained that the facility had been operational since 2016 till sometimes in November 2017, when it developed mechanical fault.

Faleti, who is an employee of Evermore Securities, a private security company, explained that apart from the challenges posed by erratic power supply and non-availability of diesel, the facility had served the few available ‘town tap points’ until it developed problems.

He said: “The engineer in charge is not on ground, and I am aware he has written to the state to complain about the mechanical faults developed by some machines.”

Also, a civil servant who lives in Ila-Orangun but craved anonymity, said apart from the four tap points sited at the water plant, there was no other public tap point within the vicinity that he was aware of.

The plant, which is located at the College High School area, in the community, serves only the people living within the neighbourhood.

“I cannot even attempt to fetch from the well in my house because it is too deep, and can take five minutes to get a single bowl of water. So, I have to drive to the water plant to fetch into jerrycans, at least every two days,” the source explained.

Osun State Water Corporation kicks, rejects projects

Embittered by the poor work done allegedly by the contractor, the state Water Corporation rejected the projects at Ila-Orangun and Ife-Odan. It said the water yields at the two sites were grossly inadequate due to the shoddy jobs done.

The corporation’s Deputy General Manager, Operations and Production, Mr. Ademola Odejide, an engineer, said the three projects were handed over to the corporation in February 2017, but after a careful study, those located at Ila-Orangun and Ife-Odan were returned to the agency for correction of all identified defects.

Odejide said: “Immediately we received the projects we wrote down our observations and recommendations, but our memo did not get to the governor on time because he was not around.

“But as soon as we received the go-ahead, only the Ipetu-Ijesha got our approval, so we sent back all the documents handed over to us for Ila-Orangun and Ife-Odan with the instruction that they should go and correct all the defects. We recommended a better industrial borehole for Ila-Orangun and raw water supply at Ife-Odan because the boreholes sunk could hardly yield 20 per cent.”

According to Odejide, the Ila-Orangun scheme is later provided with the required industrial borehole but the Ife-Odan project was  now being linked to the dam, which hasn’t been completed.

But another officer of the corporation, who craved anonymity, explained that the problem with the project is that both the OORBDA and the contractors failed to do their due diligence. According to him, researches have shown that borehole water in a basement complex terrain like Osun State cannot yield the required volume of water to serve a whole community.

“You know, in engineering, when something is not in your field, you can hardly know it; OORBDA is only known for dam, not for water supply. In fact, the Federal Ministry of Water Resources carried out a survey on water projects, which indicates that there are so many boreholes being drilled across the state especially in our own area, which are not yielding desired results because of the differences between the basement complex terrain and sedimentary basin.

“In Lagos, and parts of Ogun, borehole can easily yield required volume of water because it is a sedimentary basin. But these contractors don’t like to hear this. In fact, the contractors had in the past threatened to eliminate some of us, saying we are running them down. When the National Assembly invited some of our officers for explanation on the matter, because we explained all this, the contractor, which we later learnt is a federal lawmaker, threatened to ‘waste’ us.

“The current Deputy Speaker of the National Assembly owns the company that handled the Ila-Orangun and Ife-Odan projects. It is a secret arrangement between him and the contract awarding agency because it is against the law. Even, most of his colleagues who facilitated the projects didn’t know this until more than three years after, when the projects began to constitute problems,” the source said.

Search for contractors begins

Apart from the Ipetu-Ijesha project where the carcass of a billboard indicating the contractor’s name and other details could be found standing filthily on the wall of the plant’s fence, there is nothing to link the Ila-Orangun and Ife-Odan projects to their handlers. This informed New Telegraph to approach the OORBDA, as the contract supervising agency, for the details of the projects.

 

Ogun-Oshun River Basin Development Authority (OORBDA) responds

 

At a brief meeting held in January with our correspondent at the office of its Managing Director and Chief Executive Officer, Mr. Olufemi Odumosu, in Abeokuta, Ogun State, the Ogun-Oshun River Basin Development Authority suggested to formalise its response to New Telegraph’s enquiries, saying further communication could be established afterwards.

Thus, in a tersely-worded letter, dated January 18, 2018, and addressed to New Telegraph, it explained that after competitive bidding processes, two companies were awarded the contracts in 2012. They are Sabbyn Nigeria Limited, an oil and gas company, and Nur and Company Nigeria Limited, an engineering company.

The letter, which was signed by Odumosu, also stated the locations awarded to each of the two firms and the amount approved for each of the projects, adding that the duration for the execution of the projects was 12 months.

It said the Ipetu-Ijesha project was handled by Sabbyn Nigeria Limited while the ones located at Ife-Odan and Ila-Orangun were awarded to Nur and Company Nigeria Limited.

The letter reads in part: “The contract award process was in line with the provisions of the Procurement Act 2007.”

However, the agency failed to supply other vital information including the details of the bidding processes, registration numbers of the selected companies, how money was paid to the contractors, reasons for the alleged abandonment of the projects, allegation of poor productivity, among others.

The agency had initially claimed its officers could no longer lay their hands on the projects’ documents because “it was a long time it worked on the files,” but following unrelenting requests from our correspondent, on January 31, 2018, the agency’s Public Relations Officer, Mr. Saliu Adeniyi, sent the registration numbers and the addresses of the two companies via text messages.

CAC links Deputy Speaker to Nur & Company Nigeria Limited

Unlike the Sabbyn Nigeria Limited, which details were easily accessed on the internet, the details of Nur and Company Nigeria Limited, which executed both the Ife-Odan and Ila-Orangun projects, seemed to have been shrouded in secrecy, as the name could not be traced anywhere. It has no website, contact details, or even a social media account.

Its address at Plot 8, Impressive Close, off Dosumu Street, Agidingbi, Ikeja, Lagos, as reportedly quoted on its application document for the bidding exercise, belongs to a different owner entirely. The issue of this address alone caused more controversies than could be imagined, leading to the death of an octogenarian over the fraudulent acts of some alleged individuals.

But the Corporate Affairs Commission (CAC) helped in no small measure to unravel the mystery surrounding the owners of the companies, including the Nur and Company Nigeria Limited, which is owned by Deputy Speaker of the House of Representatives, Mr. Lasun Yusuff.
The deputy speaker, according to our findings, used his personal company to secure the two projects, even as investigations also revealed that the high ranking parliamentarian failed to execute these projects as specified by the awarding agency.

Deputy Speaker keeps mum

The series of New Telegraph’s enquiries sent to the Deputy Speaker, Hon. Lasun Yusuff, through his media aides, including his Special Adviser (Media), Mrs. Lara Owoeye-Wyse, were unanswered.

However, upon receiving New Telegraph’s letter, which was submitted to Owoeye-Wyse on January 9, the deputy speaker’s Chief Press Secretary, Mr. Wole Oladimeji, called our reporter on Thursday, January 11, on behalf of his boss to deny any knowledge of the projects. But when asked whether he had raised the matter with his boss before giving defence, Oladimeji said no, and promised to revert. He has since not got back to New Telegraph till date.

Meanwhile, in the second part of this report, many interesting twists about the whole issue will be revealed.

 

Sabbyn Nigeria Limited found

Locating Sabbyn Nigeria Limited, which handled the Ipetu-Ijesha mini-water scheme, wasn’t a difficult task. A simple search on the internet revealed the company’s website, its owner, and contact details. Its Managing Director and Chief Executive Officer, Mr. Abayomi Collins, an engineer, had represented Ifo/Ewekoro Federal Constituency in the House of Representatives between 1999 and 2007. He was Chairman, House Committees on Petroleum Resources, National Planning and Economy, and Water Resources.

Collins took time to explain his own side of the story, insisting that his company executed the project to specifications and that all rules were followed to the letter.

He said: “This project was handed over, inaugurated and was operational. We have certificates to prove this. When you complete such a project you are first given a mechanical completion certificate. Every system, generator, water and other things were certified okay. And it was handed over to Osun State Water Corporation because it is the end beneficiary.

“We completed the project in 2015 and men of the Osun State Water Corporation came to the site to understudy the situation. But officially, it was taken over in June 2016, which was even pretty long. People in the town can confirm that as far back as 2015, they were receiving water far away, where we terminated the pipeline at the Osun State University campus in the town, which is the remotest part of the reticulation network.”

Collins added that after the expiration of the six-month-defect-liability period, his company was discharged of any liability to the project.

“As a matter of fact, we were discharged completely in 2016, and since then we have been requesting for the payment of our own five per cent retention fee which was N26.7 million. Up till now, they have only paid marginally N8 million,” he said.

Asked why an oil and gas company would be awarded a water project, Collins explained that his company provided services to oil and gas, and that water service was also one of them. “So, it is part of the services we render. The company is registered with CAC. I am ready to open books for you on this.”

Collins also responded to the delay in the execution of the project. “This is typical of government projects. Projects progress as funding is made available in yearly budgets. We have several government projects with Federal Capital Development Authority (FCDA), Federal Ministry of Water Resources, Ogun-Oshun River Basin Development Authority, which have not been funded in the last four years. We will only be able to continue when they are funded.”

 

•This is the first part of an investigative budget tracking report with the support of Macarthur Foundation and the International Centre for Investigative Reporting (ICIR)

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Banks’ contract staff: Slaving for peanuts

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To cut cost in the face of dwindling economy and stiff competition, financial institutions hire contract staff who earn peanuts. But this has jacked up fraud in the banking industry, reports TONY CHUKWUNYEM

 

Until January 31, Chinyere Amadi was a contract worker with one of Nigeria’s tier one banks.

 

Nowadays, she sits at home, taking care of her 11-month-old baby and thinking of what job to apply for or what business to do to support her husband who, according to her, is finding it increasingly difficult relying on his meagre monthly salary to take care of his young family.

 

“Given my husband’s situation, I sometimes feel that, perhaps, I should not have resigned from the bank. But I had reached a point where I could no longer continue working as ‘a contract staff ’ in that organisation.

 

“Despite the fact that my husband is finding it difficult to support us with his poor salary, he fully backed my decision to quit,” she said.

 

 

Chinyere attributed her departure from the bank to the fact that not only was her monthly salary of N64,000 hardly sufficient to relieve the burden on her husband, her job as a contract worker was so tasking that it had begun to negatively impact her ability to look after her baby.

 

Indeed, she said that she spent three weeks in the hospital last December as her baby was admitted for an ailment which had become quite serious because her work schedule made it impossible for her to detect the problem before it got complicated.

 

Slavery She said: “The job required that I leave home as early as 5.30a.m., to return sometimes as late as after 10p.m. We were also expected to be at work on Saturdays so there was very little time for us, especially nursing mothers, to spend with our families.”

 

The young mother, who graduated with a Second Class Upper degree in Economics from the Nnamdi Azikiwe University, Awka, in 2010, disclosed that although she knew about the challenges of being a bank contract worker in this country, she had reluctantly taken up the appointment in 2014 when no other offer was forthcoming.

 

She said: “I did not initially want the job as it was common knowledge that despite having almost the same qualifications, contract staff earn far less than their colleagues who are employed on a permanent basis. But I had little choice because at that time, the most common opening for young graduates in the banking industry was being employed as a contract worker.

 

“However, it did not take me long to discover that the job was a form of slavery. We (contract staff) hardly have any breathing space; you cannot take or receive calls on your mobile phones while you are at work and getting permission to attend to urgent personal matters is a big problem.”

 

Amadi added that those who had permanent employment usually look down on the contract staff. “Apart from the tough work schedule, the insults and abuse that we frequently suffer in the hands of bosses who just wanted to show that they don’t have the same employment status with us can be so annoying that many people chose the option of quitting instead of being provoked into doing something rash.

 

“You can imagine that while the permanent staff who clearly don’t work as hard as contract workers earn about N150,000, we were paid N64,000.

 

Besides, while permanent staff are entitled to annual leave and leave allowance, its usually very difficult for contract staff to be granted leave and even then, they receive no allowance whatsoever,” she added.

 

Amadi emphasised that although she was yet to find another job and was having a tough time raising funds to start a business, she really did not regret resigning from the bank. 32,359 bank contract staff

 

However, it would seem that the likes of Amadi who have the courage to resign are quite few as data released by the National Bureau of Statistics (NBS) in February shows that as at December 31, 2017, no fewer than 32,359 staff in the banking industry were employed on contract basis, accounting for 35.8 per cent of total bank staff, which stood at 90,453.

 

 

The NBS in its Selected Banking Sector Data for the fourth quarter of 2017 reveals that the number of contract staff in banks had consistently grown to 32,359 in the last quarter of last year.

 

Specifically, the report shows that banks had gradually increased their number of contract staff from 20,237 in the first quarter to 21,837 in the second quarter and 27,032 in the third quarter before increasing it by 19.71 per cent in the fourth quarter.

 

 

The report further shows that the number of executive staff of banks dropped from 197 in the third quarter to 188 by the end of last year, while the number of senior executives had dropped by 3,852 from 20,420 to 16,568 as at December 2017. Also, in the last three months of 2017, the number of executive and senior staff of banks declined by 4.57 per cent and 18.86 per cent respectively.

 

Cost cutting Analysts point out that banks began to increasingly employ contract staff and reducing hir-ing of executive and senior staff as part of aggressive cost cutting measures introduced in the wake of the crisis which hit the industry in the last decade.

 

The crises, which led the Central Bank of Nigeria (CBN) to take over several lenders that were close to going under, resulted in massive job cuts in the industry with the departing staff being replaced with younger contract staff, who were ready to receive salaries that were less than half of what permanent employees were getting.

 

How it works New Telegraph findings show that banks adopted the strategy of outsourcing the hiring of contract staff to firms which usually have some form of close relationship with the lenders. For instance, the firms could be owned directly or indirectly by a relative/associate of a top shareholders or executive director of the bank.

 

Although the hired contract staff are seconded to the banks, these firms undertake all the processes required in the hiring of the contract staff, including advertising vacancies, conducting tests/interviews and issuing employment letters.

 

Also, in the event that the bank complains about the worker’s conduct, the person will not be sacked, but will be simply sent back to his or her employer. Industry sources said that while lenders pay outsourcing firms huge amounts for hiring contract staff, these companies pay the workers small salaries despite the challenging tasks they perform in the banks.

 

Rising fraud Interestingly, regulators have attributed the rising rate of fraud and forgery cases in the banking industry to the increasing number of contract staff employed by banks.

 

For instance, in the last few years, the Managing Director and Chief Executive of the Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim, has been repeatedly warning banks against the use of outsourced staff, pointing out that in 2015, over 75 per cent of fraud cases in the banking sector was traced to outsourced bank staff.

 

Last year, he revealed that bank examination reports indicated that the high incidence of fraud and forgeries in the banking system was linked to outsourced or contract staff.

 

The NDIC boss also stated that in as much as regulators appreciated the necessity for banks to cut costs, it was incumbent on all stakeholders to fashion out capacity building and other strategies to motivate all employees to contribute positively rather than engaging in criminal acts that impact adversely on the entire banking system.

 

Ibrahim told finance and business journalists in Ilorin in October 2015 that 64 per cent of fraudulent activities in the banking industry in 2014 were traced to temporary staff of banks.

 

Similarly, two years ago, the CBN Director, Banking and Payments System Department, Mr. Dipo Fatokun, disclosed that the apex bank had advised lenders to desist from giving sensitive banking roles to contract staff as they might not have a stake in the financial institution.

 

He said: “A temporary staff may not have a stake in the bank so to say. So, it is encouraged that if they have staff that are not permanent, they should not give them responsibilities or roles that will expose them to critical functions of a bank.

 

 

“If you are giving somebody an authority to approve transactions of high magnitude and he does not have a stake in your bank, then you are already exposing yourself. So, this has been going on and I believe many banks understand the need to rely on their key staff for major duties. That is one of the reasons the fraud attempts have been rising, but the value lost declining.”

 

 

However, findings by New Telegraph indicate that despite these warnings, banks not only continue to hire contract staff, but have started assigning these employees to sensitive roles that were previously reserved for full time or permanent staff.

 

An industry source attributed the development to the increasing need for banks to cut costs in the face of a tough economy and rising competition. The source said: “Before now, contract staff were not assigned to Automated Teller Machine (ATM) watch duties.

 

You will also hardly find them being told to perform customer service duties. But all that has changed. Also, in the past, most banks usually set a maximum value of between N200,000 and N500,000 as the limit for risky transactions that a contract staff can undertake, but these days, this limit has been raised to N1 million.”

 

According to fraud statistics contained in the latest Nigerian Electronic Fraud Report, which was prepared by the Banking and Systems Payment Department of CBN, the banking industry recorded 31,736 fraud cases involving N16.5 billion between January 2014 and December 2016.

 

The study shows that the frauds were perpetrated through various payment channels such as Across the Counter, ATMs, cheques and electronic-commerce platforms. Others are Internet banking, mobile banking, Point-of-Sale and web transactions.

 

The report states that in the last three years, there had been more attempts in the number of fraud cases, adding that the development could be linked to the tough economy. Commenting on the issue of banks’ hiring of contract staff, a management consultant, Mr. Dafe Edeki, blamed the situation on the country’s sluggish economy, which, according to him, continues to drive cost minimisation by companies. He said: “The banks are not exploiting the contract staff; it’s strictly business.

 

Any organisation that wants to stay competitive would take advantage of the demand and supply gap in the labour market by offering small salaries because there are millions of people who are ready to do that job for half the pay. Anyone who is not comfortable with the terms of employment should not sign the employment letter.”

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