Senate Probes CBN on N120bn Aviation Intervention Fund

The Senate on Monday took a swipe at the Central Bank of Nigeria and beneficiaries of the N120bn released to the aviation sector out of the N500bn intervention fund for the power and the Small and Medium-scale Enterprises sectors in 2011.

The Senate Committee on Aviation and Anti-Corruption, at a public hearing, frowned on the way the N120bn allocated to the aviation sector as a bailout was allegedly mismanaged and diverted.

But the Minister of Transportation, Mr. Rotimi Amaechi, told the committee that his ministry and agencies under it, based on available records, were not aware of the fund.

Amaechi’s submission, however, forced the Chairman of the committee, Senator Hope Uzodinma, to demand from the Governor of the Central Bank of Nigeria, Godwin Emefiele, who was represented by a Director of the bank, Mudashiru Olaitan, for an explanation on how the money was used in view of the financial related problems still bedevilling the sector.

The CBN representative said out of the N120bn intervention fund injected into the sector, only N39.5bn had been recovered, while the balance of N81.2bn was still outstanding.

He admitted that some of the 10 airlines that benefitted from the fund were now moribund or had folded up, which according to him, was against the reasons behind the release of the fund.

Olaitan named Air Nigeria and Chanchangi Airlines as the already folded up carriers, while Arik, Dana, AeroContractors, Kabo, Overland, First Nation and Odenegene were still in operation on the strength of the intervention.

On why two out of the 10 airlines folded up in spite of the intervention fund, Olaitan said the responsibility of monitoring the utilisation of the fund by the beneficiaries was that of the Bank of Industry, being the facilitator of the loans to them.

But Mr. John Nnorom, who served as Finance Director of the defunct Air Nigeria, alleged that the diversion of the fund to other ventures led to the collapse of the airline.

He said, “The N34.5bn drawn from the fund by the airline was diverted to other personal business by the owner, Jimoh Ibrahim.

“The very moment the N34.5bn intervention fund was paid into the airline’s account through the United Bank for Africa, it disappeared into one of the private accounts of the owner without any amount from the fund injected into the airline, paving the way for its eventual collapse.”

Efforts by the committee to get further clarification on the alleged diversion were unsuccessful due to the absence of the Managing Director of the BoI and other relevant stakeholders.

The committee directed that the CBN governor and heads of other relevant agencies, including the management of the airlines to appear in person before it on Tuesday (today).

The Vice Chairman of the committee, Senator Bala Ibn Na’Allah, said one of the airlines diverted its share of the fund to Ghana.

He said, “As soon as the management of the airline got access to the money, it transferred a huge sum of money to a company in Ghana, apparently to acquire a business in Ghana with the money that is meant to develop aviation in Nigeria.

“Then, there were other transfers that were non-aviation related and they are in huge amounts. What we are saying is that they have collected this money to enhance the growth and development of aviation.

“Wherein lies the wisdom of making these huge transfers to non-aviation related areas, including transfers across the borders of Nigeria?”

He also said that one of the airlines collected N6bn loan for a repair that cost $4,000 from the Federal Government.

“An aircraft was grounded because of an equipment that cost just $4,000, which is the Emergency Locator Transmission, even after collecting N6bn loan,” Na’Allah stated.