Monday, 31 August 2009

Northern reps against N400 billion bailout of banks

By Festus Owete
August 31, 2009 08:54AMT

The furore generated by the recent earthquake in the banking sector is far from over, as members of the House of Representatives from the 19 states of the North, on Sunday, declared as illegal, the recent N400 billion disbursed by the Central Bank of Nigeria to bail out five of the ailing banks, whose managing directors were sacked a forthnight ago.

The lawmakers also condemned the recent Federal Government policy on the tenure of federal permanent secretaries, saying it was a contravention of the provisions of the Pension Reform Act of 2004.

There are 190 members of the House from the 19 states in the North.

At a news conference in Abuja, the lawmakers, under the aegis of Northern Caucus, in the House of Representatives, said giving N400 billion to the five banks was unconstitutional.

The banks are: Oceanic Bank, Intercontinental Bank,Finland Bank, Union Bank and AfriBank.

Minority Leader of the House, Mohammed Ali Ndume, who spoke on behalf of the chairman of the Caucus, Terngu Tsegba (PDP, Benue), said due process was not followed in disbursing the money because it was not appropriated by the parliament.

“The Forum notes the issue of the Central Bank of Nigeria (CBN) bail-out of the failed banks and the injection of N400 billion into the system. While supporting the CBN’s effort in sanitizing the banking sector and indeed the larger economy, we feel that the initiative is timely, however, the injection of the N400 billion without appropriation by the National Assembly is unconstitutional.

“We therefore, urge the bank to immediately seek the ratification of the National Assembly. We indeed urge the apex bank to pursue the on-going reform to the logical conclusion,” Mr Ndume, who was flanked by about 10 other members of the caucus, said.

Gone too soon

On the civil service reforms introduced by the Federal Government, the Caucus said if implemented, some of the permanent secretaries and directors affected may be retired from service before they reach pensionable age.

The new Head of Service of the Federation, Steve Oronsaye had, last month, issued a circular introducing tenure for permanent secretaries in the federal ministries. The policy has been reportedly rejected by the permanent secretaries.

Mr Ndume said: “The Act provides for the minimum age of 55 years before any person will qualify to draw down from pension contribution.

We envisage a situation where some of those to be affected may not be up to the pensionable age and will be made to suffer for no fault of theirs simply because they chose to join the service at an early age or immediately after their graduation.

“Since the Supreme Court has already decided on the issue of retroactive laws, we call on the government not to do anything that will affect the current directors, but to implement the circular on subsequent directors in the federal civil service.” The Caucus also frowned at the 900 per cent increase of premium rates and other charges in the Federal Capital Territory, insisting that the National Assembly should have been consulted before they were introduced.

“The National Assembly, being the constitutional legislature of the Federal Capital Territory Administration (FCTA), should have been legally resorted to before the application of the charges. We view this as serious legal breach and implementation of the new rates, until due consideration is made by the National Assembly as the constitutional and democratic representatives of the people,” Mr Ndume, a member from Borno State, said.

The Caucus also regretted what it said was the poor and selective implementation of national budgets in the country. It insisted that “the 2009 budget as passed by the National Assembly and assented to by the President must be implemented fully to the letter.”


1 comment:

Anonymous said...

What would these reps say is due process?...and what is due process according to the rule books? If the disbursement is held up for these reps so that they are heard what steps do they propose to redeem the situation immediately...and over the long haul?