₦2 BILLION MSME FRAUD IN KWARA: ENetSuD LAUDS EFCC OVER INVESTIGATION AND ARREST

Elites Network for Sustainable Development (ENetSuD), a Kwara-based Civil Society Organization that is known for its #FollowKwaraMoney activities, has lauded the Ilorin Zonal Office of the Economic and Financial Crimes Commission (EFCC) over the investigation of the ₦2 Billion Micro Small and Medium Enterprises (MSME) fund received by Kwara State Government from Central Bank of Nigeria (CBN) in 2015. ENetSuD is also pleased with the arrest of Mr. Segun Soewu (Director-General, Kwara State Bureau of Small and Medium Enterprise Development) and 6 other bank Managing Directors over the alleged N2bn fraud. ENetSuD further encourages the anti-graft agency to ensure that Kwara money works for Kwarans.

In a statement issued by its Coordinator (Dr. Alagbonsi Abdullateef) on 29th July 2019, ENetSuD recalled that it wrote the immediate past Governor of Kwara State, Alh. Abdulfatah Ahmed, on 22nd October 2018 to request for information on how the ₦2 Billion MSME fund received in 2015 from CBN by KWSG to help the growth of small businesses was disbursed. Among the information ENetSuD requested from the ex-Governor include: (1) the Kwara state-designated Participating Financial Institutions (PFIs) across the state that received the money from CBN through their Deposit Money Banks (DMBs) that served as Correspondent Banks; (2) the full details (Name, contact address and nature of business) of the borrowers/enterprises (Micro and/or Small and Medium) that were funded by the PFIs from the money; (3) the exact amount received by each enterprise listed in item “2” above and the details of the disbursement (including date and receiving account); (4) the details of the amount recovered so far by the PFI from the borrowers and evidence of repayment to the DMB for onward remittance to CBN; (5) the full official report (from the commencement of the fund till date) of the Kwara State Agency for MSME that served as the Special Purpose Vehicle (SPV) for the fund management; and (6) any other information that the State Government might wish to provide on this fund.

Explaining further, ENetSuD berated ex-Gov. Abdulfatah-led KWSG for its refusal to answer the salient questions asked by ENetSuD but merely provided an infographic that did not answer the questions asked by ENetSuD. Furthermore, ENetSuD also faulted the past KWSG for its failure to provide the list of beneficiaries of the fund, citing privacy rules as an excuse. In the response of ENetSuD to the ex-Gov. Abdulfatah Ahmed through his then SSA Media and Communications (Dr. Muideen Akorede) dated 28th November, 2018; ENetSuD stated that “the beneficiaries’ information we requested for are not such kinds of private information that could not be disclosed in line with the provision of Freedom of Information Act 2011. Section 14 of the Act actually exempts disclosure of files and personal information maintained with respect to clients, patients, residents, students, or other individuals receiving social, medical, educational, vocation, financial, supervisory or custodial care or services directly or indirectly from public institutions, but the Name, address and Nature of Business that we requested for are not such information envisaged under this section as being inimical to the privacy of such persons. They are Basic information that will enable us know the BENEFICIARIES of such scheme”

After noticing the non-readiness of KWSG to account for the fund disbursement, ENetSuD further wrote the CBN Governor on 6th December 2019 to ask similar questions on the fund. The CBN did not respond to ENetSuD until a pre-action notice of intended litigation was served. In a final response CSD/FOI/GEN/REQ/06/052 dated 25th April 2019 and signed by the Secretary to the Board of CBN, the bank emphatically stated that it was unable to accede to ENetSuD requests in paragraphs 2, 3 and 7 concerning beneficiaries details, details of disbursement and other details, citing sections 14 (1A) and 15 of the FOI Act 2011 as its justification.

Explaining further, CBN insisted that “ENetSuD requests bordering on the details of the amount received by the PFIs and full official report of the Kwara State Agency for MSME as stated in paragraph 4 and 5 (concerning recovered amounts and KWSG report on the fund) of ENetSuD’s letter have been transferred to the State Special Purpose Vehicle (S-SPV) as it has greater interest in the matter by virtue of Section 5 of the FOI Act 2011″. CBN concluded that ENetSuD requests bordering on PFIs and CBN monitoring, evaluation and impact assessment have been transferred to the KWSG by virtue of Section 5 of the FOI Act 2011 and reiterated that the information is not domiciled in the CBN”.

Based on ENetSuD’s engagement with both KWSG and CBN since 2018 over the ₦2 Billion MSME fund, the non-readiness of both stakeholders involved in the fund’s management and disbursement to account for the fund is suggestive of fraudulent dealing, as it was difficult for ENetSuD and other Kwarans to know the extent to which this MSME fund has positively contributed to the economical
growth and reduction of unemployment in our Kwara state.

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