By
the end of October, the President Muhamamdu Buhari-led federal
government will reportedly shutdown the National Economic Reconstruction
Fund, a news report has revealed.
The Federal Government is has begun plans to shutdown the National
Economic Reconstruction Fund (NERFUND) over non-performance and non
performing loans of over N17.5 billion.
A source at the Federal Ministry of Finance, told a journalist on
Thursday in Abuja that a committee had already been formed to ensure
smooth liquidation of the company by the end of October.
The source said that the committee was expected to come up with
recommendations concerning the welfare of the NERFUND workers and also
what to do with the office equipments.
The committee was also expected to recommend an agency that would
handle the numerous pending court cases initiated by NERFUND to recover
billion of naira in bad loans.
According to the news source, about 1, 143 projects in the Small
and Medium Enterprises sector were financed with the NERFUND loans
between 2010 and 2013.
The source said that NERFUND currently had problems recovering the
loans, adding that out of N17.5bn, the sum of N14.2bn representing 80
per cent was borrowed by a few people.
He said the ratio of non-performing loans was high because many of the loans were not collateralised.
Meanwhile a staff of the NERFUND who preferred anonymity told NAN
that all workers of the oraganisation have been officially informed
about the wind up.
“We have been given the choice to either resign or be sacked.
The managing director told us the 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 person said.
NERFUND was established by Decree No. 2 of 1989 to act as a
catalyst towards the stimulation of the rapid rise of real production
enterprises in the country with a seed capital of N300 million.
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).
The Federal Government excluded NERFUND from the fusion of all development finance institutions (DFIs).
However, the agency’s capital had grown into billions of naira, but
due to poor management the organisation had been in comatose since late
2013 loosing its capacity to carry out its mandate.
In June 2016 the staff of NERFUND took to the streets to protest the mismanagement of the agency funds.
The Federal government through the Minister of Finance, Kemi
Adeosun intervened by first shutting down the agency following failure
to reconcile the differences between the executive management and the
entire staff so as to forestall a further breakdown of law and order.
Two weeks after the shutdown Adeosun officially instructed staff to
return to work and appointed the Dr Ezekiel Oseni in August of the same
year to act as Managing Director.
Just one year into his appointment the Federal Government had finally approved the winding up of the agency.
(NAN)
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