NERFUND’s N17bn Debt Under Investigation

The House of Representatives has commenced investigation into the role played by the Central Bank of Nigeria ( CBN) in the failure of National Economic Reconstruction Fund (NERFUND) to recover about N17 billion owed it by Small and Medium Scale Enterprises (SMEs) stakeholders.
Chairman of the 19-member ad hoc committee, investigating the huge debts owed the organisation, Ayodele Oladimeji, stated that in addition to investigating the roles played by commercial (intermediary) banks, the committee will seek out high profile debtors to the Fund as well as conduct a survey on the conditions of the projects that benefited from the loans.

Oladimeji described as highly suspicious, the inability of NERFUND to recover its debts as the laws establishing it gives the Central Bank of Nigeria (CBN) power to debit the accounts of intermediary banks. The lawmaker expressed worry that with Nigerian Deposit Insurance Corporation (NDIC) also failing to assist NERFUND recover it’s debt, the fate of the new Develoment Bank of Nigeria (DBN) may not be different from that of NERFUND as both organisations have similar mandate.

“It is important to note that the House is not averse to the closure of the Fund if found expedient, but it desires an informed decision derived from the outcome of this Committee’s investigation.
“Closing such establishment by fiat will be inappropriate in our democracy. Without prejudice, questions need to be answered regarding the achievement of the Fund on its purpose and set objectives; whether the purpose and objectives are still relevant in today’s Nigerian economy; what lessons could be learnt from the experience of the 28 years existence of the Fund.

“We will not only look into what went wrong with the management of the Fund but also at who the principal actors were with a view to drawing out lessons to forestall recurrence in similar organisations specifically and government – owned enterprises in general”, Oladimeji said.