Nigeria: As Grains Scandal Hits States - Gov Fingered, Aide Arrested

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Vanguard (Lagos)

19 July 2008
Posted to the web 20 July 2008

Bukola Ojeme

NIGERIANS may be in for endless wait for the amelioration of the pains of the rising cost of food in the country in response to global food crisis, as some state governments officials now sell allocations from strategic grains reserve to a cartel of commodity traders, instead of releasing same to the populace.

The Federal Government had released over 60,000 metric tonnes of grains to states at subsided cost from its strategic reserve, as part of measures to cushion the effect of global food shortage.

But investigations revealed at the weekend that no fewer than 20 states have sold off their allocations to a cartel of commodity traders who buy, hoard and later resell to state governments at highly inflated rates.

Only last week, the Senate Committee probing food crises in the country had revealed that some senators and emirs benefitted more from grains and fertilizer allocations to the detriment of farmers.

The cartel, allegedly controlled from Funtua in Katsina State and Ibadan in Oyo State, as learnt, have already bought up a substantial share of fertilizer allocations to states from the Federal Government for the 2008/2009 farming season, effectively ruling out chances of improved yield as palliative to the rising cost of food in the country.

The personal assistant in charge of protocol to the governor of one of the south-eastern states (name withheld) was arrested by detectives from the Federal Capital Territory Police Command, last week, over a N73bmillion grain and fertilizer deal gone sour. The state governor was fingered in the deal. Sunday Vanguard investigations revealed that, rather than boost the revenue of the beneficiary states, money realized from the sale of the grains and fertilizer to this cartel invariably end up in the private pockets of the political leadership and their cronies in the states.

The procedure for the allocations showed that once a state government pays for allocation, it is issued a letter of authority to collect grains by the Strategic Grains Reserve Department of the Federal Ministry of Agriculture and Water Resources to the Silo Manager of any of the 28 designated silos across the country.

The state governments, through their ministry of agriculture, is normally expected to go and take delivery and inject the grains into the market at subsidized rates, but, in many instances, the commissioners of agriculture or trusted aides of the governors sell the allocation papers to agents of the cartel and collect cash, in order to obliterate traces of the transaction.

An allocation paper for a state in the south-south obtained by Sunday Vanguard indicated that the state government paid N21, 600,000 as subsidized rate for 600 metric tonnes of maize, which an aide of the governor sold to the Ibadan branch of the cartel, far from where it ought to be released for purchase by the populace.

The allocation paper, dated May 9, 2008,with reference number 00833, signed by the Director of Strategic Grains Reserve, SGR, was presented to the Ibadan Silo Manager on May 14, 2008 for collection. The letter. entitled "Authority To Collect Grains", stated, "I am directed to inform you that,. ...(name of state withheld) has paid the sum of N21,600,000. for maize (600MT). You may wish to release grains accordingly on sighting of treasury receipt and original copy of allocation letter."

Sunday Vanguard reliably gathered that at least three states in the south-west, two in the south-east, three in the south-south and many northern states have sold their grains allocations to the cartel, leaving their populace to wallow in hunger and misery.

A Federal Ministry of Agriculture and Water Resources official, who decried the scandal, informed Sunday Vanguard that lack of tracking mechanism by his ministry and SGR have aided the diversion of grains allocated to states. He stated that the activity of the cartel was driving up the cost of grains and farm inputs like fertilizer, saying,

"As I speak to you, at least half of the grains released at subsidized rates to the states are already in the custody of these people. That way, they are always able to determine at what cost the end users buy the commodities. "They are able to exercise this grip and sell at their determined price by simply manipulating supply, hoarding when there is surplus, like the Federal Government's intervention through the strategic grains reserve allocation to states, and creating scarcity to keep their prices stable".

He blamed the political leadership in the states for fuelling this "vicious circle, because if the governors put their foot down that these grains must be released into the local market and put mechanism in place to monitor implementation, it will not only crash the prices of food stuff, it will also make it unattractive for this cartel to continue to act as middle men.

"But, unfortunately, we have a situation in which some state governors either use the allocations for political patronage by giving them to their cronies or out rightly selling the commodities themselves and pocketing the money, which translates into the twin evil of using state resources to pay for the grains and later sell and convert the proceeds to their personal use".

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