NDDC’s New Debt Recovery Exercise

The recent initiative of the Nige Delta Development Commission (NDDC) to engage debt collectors for the purpose of recovering debts owed it and which is reported to be as high as N1.2 trillion,is a development of interest, with a promise to change the narrative of the commission. That is if such is executed effectively without any tinge of politicisation of the process from sundry external influences, as well as the ever present possibility of sabotage from in-house, insidious power-play schemes across its rank and file. Recently, the commission appointed a debt collector – Paris Trust Limited (PTL) to tackle its debtors who are in the main oil and gas companies, operating in the Niger Delta region. The debt collector has reportedly swung into action by sending demand notices to the defaulting companies conveying a seven-day ultimatum on the latter, to address their respective cases of indebtedness.
This is a positive development by the commission pursuant to repositioning itself for more predictable business activities in respect of its statutory obligation of driving development in the Niger Delta. Created in 2000 as an interventionist agency by the Federal Government under President Olusegun Obasanjo, the NDDC had its operational mandate clearly identifying the oil and gas companies operating in the Niger Delta region as statutory contributors to its war chest. In the 2000 Act establishing the commission, the designated oil and gas companies were assigned the responsibility of contributing just 3% of their annual operating budgets to the purse of the commission. Other sources of funding for the NDDC include 15% of the monthly statutory allocation to member states from the Federation Account and 50% of the Ecological Fund. The foregoing funding sources are to be augmented with other options such as business profits, loan and gifts, to name a few.
The initiative of recovering debts from defaulting oil and gas companies is therefore a legitimate exercise that is backed by law and contemporary best fit business practice. The denial of the commission of its due revenue by the offending debtors translates into its compromised capacity to deliver on its commitments to the host states. This, however, is not to state that the failure of the debtors to oblige it has been the only problem of the commission with respect to delivering on its mandate to member states. Beyond the indebtedness of the oil and gas companies lies the bigger debt by the Federal Government itself, which the commission has demonstrated incapacity or otherwise to recover. Meanwhile, efforts to exploit other sources of funding which are market based, like returns on investible funds are yet to feature on the commission’s portfolio.
In this state of financial miasma plays out the proclivities of some potentates since 2015, to make Rivers State the ‘whipping boy’ of the commission’s operational incontinences. While the commission had since its inception battled with issues around both the operation of the funding set up as well as the process of accounting for whatever funds that accessed its coffers, the period from 2015 to date has been a season of concern with respect to its relationship with the state. The coincidence of the low points of this period with the control of the Federal Government by the APC and associated animosity towards the PDP government in the state was not difficult for any observer to associate with the victimisation of the state.
The plight of the Rivers State in this unsavoury situation has been highlighted in several instances. A typical case is the running matter of tax evasion by the NDDC in respect of which the Rivers State Internal Revenue Service (RIRS) sealed off in April this year, the commission’s corporate headquarters in Port Harcourt over an outstanding tax sum of N50 billion through a court order. While the commission protested against the action, its case was weakened as it was acting on a compromised financial operational template that provided scant transparency even with respect to its founding NDDC Act 2000. While the Act under consideration provides that the commission produces an audited report of its operations not later than six months after the end of each year, such a report from the NDDC has remained largely in the terrain of the voodoo, as far as the public is concerned.
It is therefore for good measure that Governor Nyesom Wike conveyed the pain of the State from its unfair treatment by the commission, to its Managing Director, Professor Nelson Brambaifa during the latter’s visit to mend fences. Wike had raised the issue of the commission’s slips as including the failure to pay up on its counterpart funding obligations, in respect of the Mother and Child Hospital project in the state after the government had delivered on its end.
It is hoped that dividends from the current debt recovery exercise will benefit Rivers State in addressing some of the debts owed it by the NDDC.