Obaseki has, all the while he has been in government demonstrated a penchant for being mute over critical matters. Perhaps he sees the office of governor as his private firm. But even at that, Afrinvest transactions are an open book, online, to give credit to his workers. This is more so when looked at from the background of the fact that eight months after he presented the 2017 state budget to the state assembly he has not spoken about the financial health of the state. Recall that he said while reading the budget that, “we have proposed a budget size of N150,011,831,079 Billion which is a nominal 29% increase over 2016 budget estimates made up of N74,900,297,917 as Recurrent Expenditure and N75,111,533,162 as Capital Expenditure.”
By Victor Ofure Osehobo
Nigerians will ever give thanks to the Almighty God for creating citizens like the Senate Committee Chairman on Local & Foreign Debts, Senator Shehu Sani from Kaduna state.
It was him who recently raised the alarm that the Paris club refunds to States has become a bazaar for State governors who could not manage the many loans and debts they have collected over the years.
The Senator who represents Kaduna Central said the governors are now in control of the “largesse,” and are having a ball because the APC federal government gave out funds without any mechanism to ensure transparency and accountability.
He added that the senate which is supposed to perform an oversight function over the funds has been completely excluded from the knowledge and activities of how such funds are being disbursed by the Executive.
According to him, “States government have strangulated themselves with debt in the last 17 years that does not commiserate with the amount of money being given to them.”
We have a very interesting case here in Benin City, going down memory lane in the Edo state capital where in 2010 the Government secured approval of the Securities and Exchange Commission (SEC) to raise N25 billion from the capital market for infrastructure development.
The bond which is at N1,000 par value with a fixed rate of 14 per cent will be due in 2017. With this approval, the state governor then said the government would have access to long-term capital for developmental purposes.
It was the second time the state was raising funds from the capital market, having raised N1 billion in the First Edo State Floating Rate Revenue Bond 2002/2006 for the Iyekogba Housing Estate project under Chief Lucky Igbinedion as governor.
Igbinedion left office after eight years and paid back that money in full. This present one will mature in December 2017, contrary to the lies the government told Edo people when it secured the facility.
The parties to the issue besides the Edo State Executive Council were Afrinvest West Africa Limited, owned by current governor of the state, Mr. Godwin Obaseki as the issuing house, FBN Capital, Skye Financial Services Limited, Stanbic IBTC Bank Plc, FCMB Capital and UBA Capital.
The State Attorney-General and Commissioner for Justice, then, Osagie Obayuwana, said the state was assessed by the relevant institutions and given a clean bill of health to go ahead.
“The issuing houses, joint brokers, solicitors, Banks and advisers collaborated in
assessing the suit that are against the state and the extent to which the state was indebted to right now and at the end they found the state worthy enough to issue this bond,” he said.
The Commissioner for Finance, John Inegbedion who is back to the Obaseki cabinet after helping the previous government secure dubious loans and plunging the state into debts disclosed that the best way to finance long-term projects is through bond.
“It was initially intended to raise N30 billion but the Securities and Exchange Commission only approved N25 billion,” he said. Interestingly neither Obaseki, Obayuwana nor Inegbedion was forthcoming about the maturity at the time.
At that time Obaseki was only a face on the government although the whole idea was his. Till date he has not said a word about the bond. His party, the APC was dumb on the matter during the campaigns except for a few hirelings who said it has been paid off.
Governor Obaseki has, all the while he has been in government demonstrated a penchant for being mute over critical matters. Perhaps he sees the office of governor as his private firm. But even at that, Afrinvest transactions are an open book, online, to give credit to his workers.
This is more so when looked at from the background of the fact that eight months after he presented the 2017 state budget to the state assembly he has not spoken about the financial health of the state.
Recall that he said while reading the budget that, “we have proposed a budget size of N150,011,831,079 Billion which is a nominal 29% increase over 2016 budget estimates made up of N74,900,297,917 as Recurrent Expenditure and N75,111,533,162 as Capital Expenditure.
“The revenue estimates are based on a $42.0 bench mark for crude oil and an average daily production of 1.9mil barrels per day and expectations of improved performance of Internally Generated Revenue.”
He said the budget will have a deficit if N25billion to be funded mainly by external borrowing from the third tranche of the World Bank budget support facility. That budget did not detail the present debt profile of the state. Or was it not relevant?
Since then Edo state has received close to N19billion from the first and second tranches of the Paris Club refunds by the Federal Government of Nigeria to all the states in the country.
The Paris Club refunds are in partial settlement of long-standing claims by state governments relating to over-deductions from their Federation Account Allocation Committee (FAAC) allocation for external debt service arising between 1995 and 2002.
The debt service deductions are in respect of the Paris Club, London Club and multilateral debts of the Federal and State Governments. While Nigeria reached a final agreement for debt relief with the Paris Club in October 2005, some states had already been overcharged.
The funds were released to state governments as part of the wider efforts to stimulate the economy and were specifically designed to support states in meeting salary, pension and other obligations, since states perform no other functions. All that a state earns pays workers and politicians as the mass of Edo people watch.
The releases were conditional upon a minimum of 50 per cent being applied to the payment of workers’ salaries and pensions. However this has not been the reality in Edo.
It first got N12, 182, 253, 184.99, in the first quarter and only most recently got the balance. Yet the governor has not approached the State assembly for a supplementary budget or the required authority to spend this huge sum.
Like his godfather (Oshiomhole), Governor Obaseki has been allegedly carrying on and disbursing the funds without recourse to the comatose Edo assembly, albeit illegally.
First he failed to acknowledge receipts of the monies and his government has been concealing details of the disbursements, frustrating Edo people who are keen about knowing how he intends to spend the huge amount.
For months, after he collected the first tranche he denied that the monies were in a fixed deposit account. Other top Edo government officials blocked attempts to obtain details of the payments, amid allegations of misuse, which they did not deny.
They have merely been wallowing in the cheap feat of repairing roads and that some local government council workers got part of their sixteen months arrears of salaries, all paid from the largesse.
They forget that in authorizing the payments in November 2016, President Muhammadu Buhari advised the money be used in settling arrears of workers’ salaries, retirees’ pension and gratuities.
Yet after subjecting poor hapless citizens who served their fatherland to unnecessary screening and failing to put in place a credible Pension board as required by law, the governor has failed to pay neither the LG workers nor the pensioners their entitlements.
It was in May of this year that in excitement the governor told the beleaguered workers, among them the less than 3, 000 member strong aging Edo state civil service that he was going to use the proceeds of the Paris Club refunds to pay them.
Since then the pensioners have been on the streets of Benin in protest. Made up of retirees from both local and state governments, they have been appearing in red attires to protest the non-payment of their gratuities and other entitlements.
The pensioners led by its state chairman, Pullen Noruwa, during the most recent protest, decried the failure of the state government to pay their pension and gratuities, despite the bailout funds made available by the Federal Government.
He stressed the fact that the unwillingness of the state government to account for the bailout funds leaves much to be desired as he expressed deep regret over the non-payment of their entitlements.
The situation, he said which has caused them untold hardship and pains is no longer acceptable adding that they will keep taking to the streets until Governor Obaseki do the needful by paying their pension allowances to enable them address their various needs.
He listed their grievances to include: the refusal by the governor to open up on the non- disbursement of the N6.38billion (1st tranche) and N12.18billion (2nd tranche) of the Paris Club refund bailouts from the Presidency.
These funds he said were meant for the payments of all outstanding salaries and pension entitlements to local government and state pensioners among others, according to Mr. President who has moved Aso rock to London.
The pensioners have also called for the immediate regularization of the payment of the monthly pensions to the local government council pensioners as against the current unwholesome practice which leaves much to be desired.
Interestingly not too far away from Edo is an APC governor in Ondo; this one appears more transparent and admitted the reality. The Ondo state government went public and confirmed that it had received N7 billion as its share of the second tranche of the Paris Club refund.
According to a top government official, the government has resolved that 32.68 per cent of the sum would be allocated to local government councils while the state government would keep 67.32 percent as its share.
“It is also important to note that according to the agreement reached between the states of the federation and the Federal Ministry of Finance, 75 percent of the share received by the state is devoted to payment of salaries and pensions while 25 percent is devoted to capital projects.
“As a responsive government, the administration of Gov. Oluwarotimi Akeredolu, SAN, is committed to using the funds for the purposes they are meant to be used for.
“The governor continues to seek the support of the workers and the people of the state in his desire to lay a solid foundation.”
Perhaps about to turn a new leaf, Obaseki’s new spokesperson, Mr. Crusoe Osagie after acknowledging receipt of N6, 091,126,592.49 as Edo share of the Paris Club refund, has promised that the governor would put the windfall to good use.
He was however silent on whether refund would be deployed in the payment of pensioners even as he did not say when and by who, a statement would be issued on how the funds would be applied, assuring that the governor will not go against the , “rules.”
Will these rules be those the President enunciated or the ones cooked up by the Edo state governor?
