A significant hurricane may be emerging within the South East Development Commission (SEDC) as allegations surface regarding the Board and Management’s acquisition of a 25 billion Naira loan from a commercial bank, without the required approvals from the Debt Management Office (DMO) and the National Assembly, as stipulated by law.
President Bola Tinubu, on July 24, 2024, signed the bill establishing the South East Development Commission, and on 6 December 2024, nominated the Board Members and Management team of the commission.
Reports indicate that, similar to other commissions established by the President, such as the North West Development Commission (NWDC) and the North Central Development Commission (NCDC), the SEDC is yet to receive any initial grant. However, it remains unclear whether this lack of funding has prompted the push for a loan from a commercial bank at an interest rate of 30%.
WHAT DOES THE LAW SAY
In Nigeria, the process for obtaining loans, particularly for government ministries, agencies, and commissions, is governed by various legal frameworks and regulations aimed at ensuring transparency, accountability, and fiscal responsibility. The Debt Management Office, DMO is tasked with the approval of loans for commissions such as the SEDC.
The Debt Management Office (Establishment, Etc.) Act of 2003 establishes the DMO and delineates its functions, including the management of public debt. This act provides the legal basis for the DMO to oversee borrowing by federal and state governments and their agencies.
Furthermore, the Fiscal Responsibility Act of 2007 outlines the framework for fiscal discipline and sets guidelines for public borrowing, mandating that any borrowing must be approved by the National Assembly and that the DMO must assess the sustainability of the proposed debt, thereby granting it a crucial role in the loan approval process.
National Assembly Members React.
When contacted by our reporter, a member of the Senate Committee on SEDC expressed ignorance of any loan. “We’ve not been informed by the Board nor Management of SEDC as required by law. So, I can say I’m not aware of the loan,” said the Senator, who requested anonymity.
Another member of the SEDC Committee in the House of Assembly remarked, “That would be the 8th wonder of the world, and I don’t know from where they derive the powers to do such without our approval.”
The lawmaker, who also wished to remain unnamed, added that they are hearing it as a rumour and “I hope it remains at that realm because anything to the contrary will be ultra vires and won’t stand.”
ANALYST RAISES CONCERN
Public affairs analyst Dr. Ambrose Igboke commented on the situation, stating, “If this allegation is true, then we’re jeopardizing the development of our people. How can you be talking of such a humongous loan at 30%? What kind of development can such loans sustain? Any loan that is above single digit interest cannot be used for development. And even allegedly doing so without due process is worrisome. I sincerely hope that this rumour is not true”.
He also questioned why the SEDC was pursuing this loan, noting that he had not heard similar claims about the NWDC or NCDC, which were established concurrently with the South East Commission.
Dr. Igboke cautioned about potential repercussions, stating, “Should the president capitalise on this, if confirmed to be true, to suspend the activities of the board and management of the commission, our people will cry blue murder. Such a situation should be avoided”.
THE COMMISSION REMAINS SILENT
At the time of this report, attempts to obtain comments from the Chairman of the Board, Emeka Wogu, and Mark C. Okoye, the Managing Director/Chief Executive Officer of the commission, were unsuccessful, as they did not respond to multiple SMS messages sent to their known mobile numbers.
