NERFUND collapses as beneficiaries refuse to repay N17.5billion

National Economic Reconstruction Fund (NERFUND)
National Economic Reconstruction Fund (NERFUND)

The Federal Government is reportedly making arrangements to shut down operations of the National Economic Reconstruction Fund (NERFUND), at the end of October, due to huge non-performing loans of about N17.5 billion.

A source at the Federal Ministry of Finance told the News Agency of Nigeria (NAN), in Abuja, yesterday, that a committee has already been formed to ensure smooth liquidation of the company.

The source also said the panel is expected to come up with recommendations concerning welfare of NERFUND workers and also, what to do with the office equipment.

The committee is equally expected to recommend an agency that would handle the numerous pending court cases initiated by NERFUND, to repatriate billions of naira it had earlier loaned out.

It said that the committee was expected to submit recommendations to the Minister of Finance on Thursday.

According to the source, about 1,143 projects in the Small and Medium Enterprises sector were financed with NERFUND loans, between 2010 and 2013.

The source said NERFUND currently has problems recovering the loans, adding that out of N17.5 billion, about N14.2 billion, representing 80 per cent was borrowed by a few people. He did not give names but added that the ratio of non-performing loans was high, because many of the loans were not collateralised.

Meanwhile, a member of NERFUND, who declined to be named because he was not authorised to speak, told NAN that all workers of the oraganisation have been officially informed about the wind-up.

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“We have been given the choice to either resign or be sacked. The managing director, Dr. Ezekiel Oseni, told us management is working with the permanent secretary of the Federal Ministry of Finance. They have promised that, at the end of the day, we will not be jobless. They will place us somewhere else; so, we are expectant,” the source said.

In 2002, the federal government merged Nigeria Industrial Development Bank (NIDB) and Nigeria Bank of Commerce and Industry (NBCI) to form Bank of Industry (BOI) but excluded NERFUND from the fusion of all development finance institutions (DFIs).

In June 2016, staff took to the streets, to protest alleged mismanagement of the agency’s funds, by its management.

Contacted over the issue, Deputy Director of Information in the Finance ministry, Mrs Patricia Deworitshe, said:“It is news to me. I don’t know if NERFUND is winding up.”

Similarly, efforts to obtain comments from Oseni were unsuccessful as calls made to his mobile telephone by a NAN correspondent were not answered, neither did he reply a text message sent to him over the issue.

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