The National Insurance Commission's management's decision to spend ₦4 billion on an unfinished building in Abuja has caused controversy, and now the Federal Government has ordered the acquisition to be put on hold until further notice.
In addition to the suspension, the Minister of Finance, whose ministry oversees the agency, has also established a panel to investigate the entire transaction involving the purchase of the unfinished structure, which the management of the commission submitted to the Federal Executive Council for approval as a "Suitable Property for the dual purpose/use for the NAICOM Academy and New Office accommodation."
The investigation panel is led by the Permanent Secretary of the Finance Ministry, and the committee is supposed to determine if the management actually followed the law while attempting to purchase the unfinished building and whether the price quoted is reasonable for the property.
The delay of the acquisition came after certain contentious management moves made in the third week of August to avoid the August 25 2022 deadline for the withdrawal of the money from the commission's account held at the Central Bank, which were unpopular with the agency's board and staff.
The board, acting on the advice of the Director of Finance and Administration (DFA), opposed the withdrawal of the funds even though the management insisted on doing so. The board's justifications were that there was no cash to support the Federal Executive Council's approval and that the building in question was not worth the staggering ₦4 billion.
The personnel threatened to go on strike if the fund was pulled out at this time of year, arguing that doing so may delay payments of their salaries and other benefits.
However, the management vehemently transferred the Director of Finance and Administration to Lagos against the financial advise, hand-selected a subordinate official to fill her position, and then changed the signatories on the agency's account.
The purchase of the building in Gudu, on the outskirts of Abuja, was immediately suspended and investigated after the finance minister learned of the commotion.
She gave the order, and the DFA was sent back to the NAICOM headquarters in Garki, Abuja, on Wednesday.
But the management of NAICOM in an unsigned statement made available to Sunday Vanguard, insisted that the agency followed due process in buying the building.
The statement said: “That the management of NAICOM through the Minister of Finance, Budget and National Planning presented to the Federal Executive Council presided over by His Excellency, President Muhammadu Buhari, an unfinished property for approval to be acquired as NAICOM Academy and office accommodation following the approval by the immediate past Governing Board of the Commission. All documents relating to the property clearly state that the property was in an unfinished state.
“The Commission had prior to the FEC approval, obtained a “No Objection” from the Bureau of Public Procurement (BPP) following the valuation of the property by the Federal Ministry of Works and Housing .Adequate due diligence was conducted on the property.
Provision was made in the 2022 approved annual budget of the Commission for the purpose of acquiring the building for the Commission.
“The building is to serve the dual purpose of housing the newly established NAICOM Academy which is an initiative of the present leadership of the Commission to address knowledge gap in the insurance sector regulation and supervision not only in Nigeria but across Africa and beyond and also serve as the new head office of the Commission.
“In order to address the problem of low insurance penetration, entrench the culture of insurance in every part of the country and enhance the effectiveness of its surveillance in all the geopolitical zones of the country, the expansion of the Commission’s infrastructural facilities is inevitable thus the Commission requires a befitting office accommodation to curtail any future office space crises.
“This clarification has become necessary to clear any doubt in the minds of the public with respect to the process followed by the Commission in its efforts at acquiring the property,” NAICOM management said.