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Ondo APC alleges conversion of bailout funds to soft loans

ONDO State All Progressives Congress (APC) has accused the state government of the diverting bailout funds as loans to members of National Union of Road Transport Workers (NURTW), artisans and market women in exchange for their voter cards.

The fund was initiated by the Federal Government to help states settle outstanding workers’ salaries, allowances and pensions.

A statement by the party’s spokesman, Omo’ba Abayomi Adesanya, said: “We have uncovered a new strategy by Governor Olusegun mimiko to hoodwink the people of Ondo State and to illegally acquire their voter cards under the guise of soft loans to certain groups of people and associations.

“These groups include the NURTW, artisans, market women associations, the Okada Riders Association, tipper union and others.

“Using his surrogates planted within these associations, the governor has started witch-hunting and intimidating members, who refused to submit details and photocopy of their voter cards.

“He has threatened to deregister and expel them as members of such association/group and that he will not allow them to function within the state.

“Mimiko’s plan is to give soft loans of between N60,000 to N100,000 to every member in exchange for their voter card ahead of the 2016 gubernatorial election in the state. He also promised any member with children of voting age an extra N100,000, depending on the number of children.

“This is obviously robbing Peter to pay Paul. He is robbing the workers in the state of their salaries to give loans to the artisans, NURTW, market women in exchange for their voter cards.

“We appeal to these groups/associations and the people of Ondo State not to fall for this evil plot by the governor. Voter card or its information should not be released to anybody or government agents as precondition or licence for loan. Doing so will amount to selling their future and that of their children.

“We challenge Ondo State Police Command, Directorate of State Security, Ondo State Command, the Nigerian Security and Civil Defence Corps (NSCDC) to investigate this matter and unravel the government agents behind this dastardly act and bring them to book.”

The state government, through its Commissioner for Information, Kayode Akinmade, denied the allegation of bailout funds diversion, describing the statement as frivolous.

According to him, the funds went to appropriate quarters, stressing that the inability of the government to pay wages for workers as at when due was as a result of the decline in the nation’s economy.

He urged the opposition APC to show maturity in its criticisms of the state government to forestall unnecessary tension in polity.

June 3, 2016
Bailout fund: Who is deceiving who?
SIR: It is a matter of serious concern to Nigerians that a respected government institution such as Independent Corrupt Practices and other Related Offences Commission (ICPC) can be faulted, tainted and discredited by cacophony of some governors whom were purportedly adjudged to have diverted the Federal Government Bailout funds meant for workers’ salaries and yet little or nothing has been done about it.

Thus, Nigerians will not only frown at it but also resist any attempt to sweep the issue under the carpet.

To ensure prudency and transparency, the Independent Corrupt Practices and other Related Offences Commission (ICPC) in collaboration with Nigeria Labour Congress (NLC) promised to monitor the exercise in order to avoid mismanagement cum diversion of the funds which may definitely lead to industrial unrest across those states. Interestingly, Nigerians immediately took this word/promise to heart because of the unbridled regard they have for ICPC and went to sleep with our both eyes closed.

However, the report issued by the Independent Corrupt Practices and other Related Offences Commission (ICPC), which was signed by Mr Mustapha Hussain on behalf of the commissioner, public enlightenment showed that some states were found to still be owing salaries and pensions, an indicator that the funds may have been mismanaged.

According to ICPC, out of 27 benefiting states, the commission was able to monitor and cover just 23 states. For example, in a particular South eastern state, the ICPC alleged that out of the N26.8bn bailout received from the Central Bank of Nigeria, over N6billion was immediately transferred into certain account of two commercial banks which are not in anyway related to salaries and emoluments as well as N21,017,810.00 which was also paid into an unspecified account by the same state.

According to the report, another state in the North central which received over N12bn that was specifically meant for the payment of the salaries and pensions too, mysteriously paid over N70m into the account of the office of the deputy governor of the state in double lodgments.

More so, another state in the Southwest Nigeria which got over N34.8bn as bailout fund only disbursed a meager of it and still owing workers’ salaries till date. The innumerable list goes on and on from North east to Northwest.

In conclusion, we cannot play the ostrich in a situation as critical as this. Nigerians have over the years had unbridled regard cum respect for an agency such as ICPC and should not be allowed to be taken to the mud.

Anything short of this will be tantamount to loss of confidence and distrust which may not be easily regained in the near future.
- Kenneth C. Eze
Lagos
May 16, 2016
Aregbesola: Osun didn’t mismanage bailout funds

•ICPC ‘never indicted Osun’

Osun State Governor Rauf Aregbesola said yesterday that the state has not been indicted by the Independent Corrupt Practices and other Related Offences Commission (ICPC) on the disbursement of bail-out cash.

The governor, who spoke to workers at Osogbo township stadium during the Workers’ Day event, said the anti-corruption agency had written to him to clarify the matter.

According to the governor, there was no truth in the rumour that Osun was among the states indicted by the anti graft body.

He said: “I want to also assure you, contrary to the insinuation being made by our traducers, who claimed we diverted the bailout funds, that nothing of such happened. This is the concoction of a mischievous opposition and their media conspirators.

“The ICPC never indicted us. Other media agencies reported the ICPC accurately that the data it published on disbursement of bailout funds by states was as at October last year and this was given to them by us. How could we then have indicted ourselves?

“I am happy that ICPC has cleared the air. We demanded for N64.3 billion to cover outstanding salaries, pension and gratuities up till June 2015 for the state workers and N23.8 billion to cover the salaries, pension and gratuities for the local government workers for the same period.

“However, we got N25.8 billion for state and N9.1 billion for local government, totaling N34.9 billion. So, we can all see that this is a far cry from what we needed and asked for. We got this far only because of exceptional financial engineering, extreme prudence and commendable cooperation of Labour. I must also let you know that there is no way we could have diverted the funds, knowing that it was not sufficient for our needs in the first place.”

Aregbesola assured the workers that the worst was over and that the state would be out of the woods soon.

He added that governors had a fruitful meeting with President Muhammadu Buhari, who has been very concerned about welfare of the states.

He praised the workers for their loyalty, dedication, hard work and their exhibition of the fear of God during the challenging period.

Chairman of the Nigerian Labour Congress in Osun State, Comrade Babatunde Jacob Adekomi, noted the commitment of the workers in the face of harsh economic conditions.

Adekomi said workers have passion for the development of the state, which explained why workers decided to troop out to celebrate the Workers’ Day.

May 2, 2016
Bailout: Between Enugu govt and ICPC
Recently, some newspapers reported on the alleged mismanagement of the bailout fund given to 27 states by the federal government. The reports purportedly emanating from the Independent Corrupt Practices and Other Related Offences Commission (ICPC), alleged that Enugu State government utilised N6 billion out of the N10.2 billion bailout fund collected last November to settle domestic debts, thus leaving staff salaries and emoluments unpaid.

Expectedly, some of affected state governments have denied the allegation putting the ICPC on the spot. While it is not impossible that some state governments may have mismanaged or diverted parts of the fund for other purposes, it is also a fact that some states have utilised theirs for the purpose it was meant for – which is settling outstanding workers’ salaries and emoluments.

From the referenced ICPC report on Enugu State government’s use of the bailout fund, it is obvious that the ICPC did not find out from the workers in the state on when last they were paid salaries before arriving at its conclusion. It is expected that in the process of investigating on how states disbursed the bailout funds, ICPC would have at least approached the Central Bank of Nigeria (CBN) to get all the necessary documents submitted by the beneficiary states which was part of the conditions before the funds were released to them by the apex bank. If it had, ICPC in their reports would have been more accurate and precise on how much were requested by the states and how much were given to them and when. This is in order to avoid being speculative and mischievous as the case of Enugu State alleged to have collected N10.2 billion.

The Enugu State government through its Secretary to the State Government, Elder Gabriel Ajah, and the state chapter of the Organized Labour in a statement jointly signed by Comrade Virginus C, Nwobodo, chairman, NLC; Comrade Igbokwe Chukwuma Igbokwe, chairman, TUC/JPSNC and Comrade Theo. O. Obasiani, secretary, JPSNC have refuted the claim saying that contrary to the figures bandied in the ICPC report, the state actually collected the sum of N4,207,000,000.00.

Understandably, the workers in the state comprising the Nigeria Labour Congress (NLC), the Trade Union Congress (TUC) and the Joint Public Service Negotiating Council (JPSNC) have described the allegation by the ICPC as false and misleading and a deliberate attempt to instigate workers and good people of Enugu State against the state government as well as tarnish the good image of the state.

The workers their joint statement averred that “the Organised Labour in Enugu State is seriously embarrassed by the false, unfounded and malicious publication purported to have emanated from the office of the Independent Corrupt Practices and other Related Offences Commission (ICPC).” It explained that “a committee comprising labour and government was set up to verify, monitor and disburse the funds to the beneficiaries, adding that as at the time referred to by the newspaper publication of February 29, over 60% of the fund has been disbursed to the beneficiaries while the verification and disbursement exercise will continue till May 31, as some of the beneficiaries (pensioners) are yet to show up for verification.

While expressing satisfaction with the management of the N4.207 billion bailout fund for payment of arrears of pensions and salaries, the Labour noted that it will continue to partner the state government for good governance and sustainable development of the state.

Of course, since coming into office, Enugu State governor, Ifeanyi Ugwuanyi has made workers’ welfare his government’s topmost priority. Given the character of the state as a civil servant state, his government has not only ensured that workers got their due, but has also carried them along in his developmental initiatives. This has been attested to by the leadership of the workers in the state and the national level.

Indeed, during a fact-finding mission in the state towards the end of last year, President of Nigerian Labour Congress (NLC), Comrade Ayuba Wabba and his Trade Union Congress (TUC) counterpart, Comrade Bobboi Kaigama alongside other labour activists could not hold their joy over the state government’s responsiveness and commitment to the workers‘ needs and welfare in the government’s policy thrust of ensuring transformed lives of the entire Enugu people.

Speaking during the mission, NLC president, Wabba said: “I( think in this country we are beginning to have leaders at the helm ( of affairs that are truly leaders. I strongly believe( that Enugu State is a lucky state. You have shown us that workers in your state are partners in progress, not slaves”.

Speaking at this year’s Workers’( New Year Prayer session, Governor Ugwuanyi said: “We will continue to pay salaries. It is( only when we pay salaries that we can activate the economy of the state. This is because Enugu State is more of a civil service state. Enugu State TUC chairman, Chukwuma Igbokwe also on the occasion said: “Even when some ( states are having issues with the bailout fund, Ugwuanyi made sure( we are involved in the management and disbursement of the fund to the extent that civil servants whose salaries and allowances were being( owed were paid…On the issue of arrears of the absorbed workers, we also approached him and we reached agreement. He has ( never promised the workers and failed them.”

With such overwhelming testimonies and confessions about Ugwuanyi-led government’s responsiveness and commitment to their welfare since coming into office, the question is where did the ICPC’s report of alleged mismanagement of the state bailout emanate from. Was it a case of Biblical voice of Jacob and hand of Esau? Why did the ICPC choose to play to the gallery rather do their investigation on the bailout fund thoroughly? Is it a case of being used to do a dirty job against the state government? If not, why has ICPC remained silent in the face of the strong and obvious denial by the Enugu State government and Organized Labour in the state? Nigerians know that ICPC’s silence is not golden; it is suspicious and misleading. Again, if truly the reports were investigated and compiled by the ICPC and Nigerian Labour Congress (NLC) as claimed by the ICPC, why hasn’t the leadership of the NLC substantiated or authenticated the reports?

It is a known fact that most anti-graft agencies in the country including the ICPC abandoned their constitutional responsibilities in the past. Some have just suddenly woken up from slumber since the inception of the present APC-led administration. Nonetheless, it is very important for due diligence to be followed and professionalism to be exhibited in investigating sensitive a issue like the disbursement of states’ bailout fund. This is to avoid misleading the public and instigating the workers against their state governments.

It is on record that since Ugwuanyi came into office, Enugu workers have not embarked on or threatened to embark on strike over issues of salaries or arrears. It is also indisputable that Enugu is one of the states with the least bailout fund with N4.207 billion out of the N32( billion requested for. The implication is that the state workers are the probably the best bailed out given the precarious financial situation facing workers across the country today. Anyone with contrary information should provide it with incontrovertible evidence and not misleading reports as we have seen from the ICPC.
- Mrs. Ugwuada, a retired civil servant wrote from Nkanu, Enugu State.
April 29, 2016
Deferral of states’ N10.9bn debt repayment not a bailout, says FG

The federal Ministry of Finance has warned state governments that Thursday’s debt repayment deferral is not a bailout.

According to a statement issued by the ministry, the deferral, which amounts to N10.9 billion in total, is to ensure that the states are in a better position to meet their salary obligations.

“We are not able to guarantee that all states will be able to meet their salary obligations as each state’s situation is dependent on its own cost profile and other obligations it may have, but this initiative is to better position them to do so,” the ministry said.

All states, the finance ministry said, “will receive the relief this month. However, further deferrals will be subject to the agreement of a Fiscal Restructuring Plan to be prepared by each state with clear measurable objectives.”

The ministry said it was keen to ensure that the programme of financial discipline being driven by the federal government “is replicated in all tiers of government, including elimination of payroll fraud and increased spending efficiencies in overhead.”

The ministry noted that for enhanced financial transparency with the publication of audited accounts and submission of debt profile may also be required.

This, the ministry said, was designed to move the states towards fiscally sustainable practices; a key objective of the federal government to ensure that Nigeria recovers from the current economic challenge.

The ministry noted that about 27 states are currently experiencing challenges meeting their salary payments and “in response to the above, obligatory repayments due to the Federal Government from the states in respect of their restructured loan obligations are being deferred for the current month.”

The Federation Accounts Allocation Committee (FAAC) meeting, which took place on Thursday, presented the lowest shared sum in more than five years with less than N300 billion in revenue; the result of low oil prices in January and February.

April 23, 2016
How states spent their bailout funds

Preamble

The Independent Corrupt Practices and Other Related Offences Commission (ICPC), working in concert with the Nigeria Labour Congress, made good its resolve to monitor the bailout funds for the offset of salary arrears loaned to twenty seven states of the Federal Republic as approved by President Muhammadu Buhari

Following the conclusion of the monitoring exercise, the commission hereby wishes to issue, for public notice, the report of the exercise. The commission also will not hesitate to provide updates to this report where applicable.

It is important to note that the monitoring exercise report and probable updates are being released to the public by ICPC to foster understanding between workers and the state governments by providing a transparent process that eliminates information gaps that often lead to rumour-mongering. The Commission is convinced that this will promote a healthy atmosphere for interaction between the parties on the matter.

Introduction

As part of the Federal Government’s effort to end the lingering crisis of unpaid worker’s salaries in most states of the federation, President Muhammadu Buhari approved a comprehensive relief package designed to salvage the situation through the Central Bank of (CBN)’s Special Intervention Fund which offered states soft loans solely for the purpose of paying the backlog of salaries.

Benefiting states

Whereas the Central Bank of Nigeria (CBN) is yet to officially confirm this to the Commission, the twenty-seven benefiting states from the open sources are Abia, Adamawa, Bauchi, Bayelsa, Benue, Cross River, Delta, Ebonyi, Edo, Ekiti, Enugu, Gombe, Imo, Katsina, Kogi, Kwara, Nasarawa, Niger, Ogun, Osun, Oyo, Plateau, Sokoto and Zamfara states.

Following strident allegations of diversion of these bailout funds and to avoid industrial unrest, ICPC, in collaboration with the Nigerian Labour Congress (NLC), decided to monitor the disbursement of the bailout funds in the 27 benefiting states. However; relying on available resources, we could only cover twenty-three states as follows:

Adamawa: Total debt value accrued from staff salaries and emoluments was N9,578,360,000.00. The state received N9,578,360,000.00 as bailout fund and disbursed N2,378,360,000.00 with a balance of N7,200,000.00. The reason for the slow process of off-setting the debt was not provided at the time of this report. However, the state claimed not to owe outstanding salaries as at September 2015.

Bauchi: Total debt value accruing from staff salaries and emoluments was N14,820,775,109.50. The state received N8,609,100,000.00 as bailout fund and disbursed N8,414, 088,383. 26 with a balance of N195,011,616.74. The state claimed not to owe salaries as at September 2015.

Benue: Total debt accruing from staff salaries and emoluments amounted to N12,503, 439,787.48 The state received N12,503,439,787.48 as bailout fund and disbursed N10,852,536,702.96 with a balance of N1,650,903,084.52 Analysis of the documents submitted revealed a double payment of N37,760,000.00 in favour of the office of the Deputy Governor. This double payment is presently being investigated.

Cross River State is yet to submit her actual debt profile. The state received N7,856,400,000.00 as bailout fund and disbursed N3,140,883,,040.77 with a balance of N4,715,516,959.23 However the state claimed not to have outstanding salaries to workers as at 19/11/2015.

Ekiti State’s total debt accrued from staff salaries and emolument of N3,000,266,146.64 The state received N9,604,340,000.00 as bailout fund and disbursed N9,213,816,252.55 with a balance of N390,613,747.56. The state owed one month salary as at 28th October, 2015.

Katsina State: Total debt value accrued from staff salaries and emoluments of N11,086,630,000.00 The state received N11,086,620,000.00 as bailout fund and disbursed N2,512,214,530.71 with a balance of N8,574,415,469.29. The state claimed to have cleared all outstanding salaries as at 18th February 2016.

Gombe State has a total value accrued from salaries and staff emolument of N9,222,432,872.67. A total sum of N11,000,000,000.00 was granted to the state as bailout and it disbursed N6,321,684,423.67 with a balance of N4,678,315,576.33. The state claimed it did not owe salaries as at September 2015.

Kogi State claimed no to have received bailout funds approved for the state by the Federal Government as at 8th August 2015.

Nasarawa State received N8,317,167,368.87 in two tranches of N3,956,047,519.60 and N4,361,119,848.27 as bailout fund and disbursed N3,956,047,519.60 with a balance of N4,361,119,848.27. The state claimed not to have paid local government workers’ salaries due to an on-going verification exercise.

Niger State received N4,396,810,000.00 as bailout fund and the entire amount was claimed to have been expended in offsetting salary debts.

Ondo State’s total debt value accrued from staff salaries and emoluments and was put at N23,151,324,517.39. The state received N9,443,053,226.92 as bailout fund and disbursed N7,905,484,176.60 with a balance of N1537,575,050.32. The state owes one month salary and several months arrears of gratuity (and) pension as at 30th September 2015.

Osun State received N34,988,990,000.00 bailout fund N18,677,244,582.20 was disbursed leaving a balance of N16,311,765,418 billion as at November 2015 the Commission is verifying allegation that osun state public servants have only been paid salaries up to July 2015.–

Ogun State received N180,916,208,664.86 as bailout fund. The state claimed to have expended the entire sum of salary arrears and did not owe worker as at 9th October, 2015.

Plateau State’s total debt value accrued from staff salaries and emoluments of N5,090,251,996,39. The state received N5,357,570,000.00 as bailout fund and disbursed N5,330,589,061.15 with a balance of N26,980,938.85. The state owes two months salaries as at 30th September, 2015.

Sokoto State’s total debt value accrued from staff salaries and emolument including pension, severance and gratuity of N3,488,11.165.77. The state was granted N10,093,370,000.00 as bailout fund and was yet to disburse as at the 19thOctober, 2015.

Kwara State received the sum of N4,320,950,000.00 as bailout fund and disbursed N4,291,087,985.08 for staff salaries and emoluments with a balance of N29,862,014.92 The state claimed to have cleared all outstanding salaries as at 20th October 2015.

Bayelsa State applied for the sum of N1,285,000,000.00 and had concluded disbursement formalities. But the central bank of Nigeria was yet to release the said fund to the state as at 18th December 2015.

Imo State applied for and received bailout funds of N26,806,430,000.00 from the Central Bank of Nigeria, which was domiciled in two commercial banks, namely Fidelity and Zenith Bank. In the course of analysis, it was discovered that some transfers were made into certain Imo State Government accounts, which are not related to salaries and emoluments as follows:

i N2 billion into a Government House account

ii N2 billion into an Imo State project account

iii N2 billion transferred to a micro finance bank

iv A management fee of N21,017,810.00 was paid into an unspecified account.

Zamfara State requested for the sum of N32,512,495,183.27 bailout funds and received the sum of N10,020,052,964.51 After careful analysis of the document provided and interaction with the Nigerian labour leaders in Zamfara State by ICPC staff, it was revealed that the state was not owing civil servants and pensioners any arrears as at the time the Federal Government released the bailout funds.

The state government, in order to utilise the funds, made overture to the Zamfara State House of Assembly requesting to the funds to settle some liabilities amounting to N10,020, 751,072.98 as follows:

*Outstanding payment to 14 LGS of the state:                                             N4,262,560,629.85

   * Outstanding payment of fertilizer for 2014 farming season                   N3,056,300,000.00

* Outstanding certificate for construction of Bungudu Nahuche Kyabarawa Road 22.6km N265,256,342.76

* Outstanding certificate of Hostel Block at Abdu Gusau Polytechnic, T/Mafara N55,000,000.00

* Payment of outstanding cost of vehicle supplied to state                        N19,430,000.00

* Outstanding certificate of construction work at K/Namoda Juma’at Mosque N20,479,109.39

* Outstanding certificate of Contraction work at Emir’s Palace Gusau:   N6,020,000.00

* Share of 14 local government coucil’s bailout                               N2,035,705,000.00.

The Zamfara State House of Assembly passed a resolution for the utilization of the funds on the above items, which was communicated in the Secretary to the State Government vide letter ZMHA/LEG/089/V.1/13 dated 31st August 2015.

Enugu State has a total debt value accruing from salaries and emolument of N13,764,622,725.38 and N23,279,099,157.58 as domestic debt. The State was granted N10,174,238,681.49 as bailout fund as at 16th November 2015. Analysis of the documents submitted revealed that the state disbursed N5,967,238,681.19 from the bailout fund to settle domestic debts and claimed that funds for the payments of state salaries and emoluments was not yet assessed.

Oyo State’s total debt value accruing from staff salaries and emoluments is N26,606,944,831.03. The state was granted N26,606,944,831.03 as bailout fund and disbursed N25,495,295,292,422.63 with a balance of N1,111,652,408.40. The state owes four-month salaries as at 7th April, 2016.

Delta State has a total debt value accruing from staff salaries and emoluments of N36,417,217,601.53 The state was granted N10,936,799,299.36 as bailout fund and disbursed N8,129,888,279.86 with a balance of N2,806,911,019.50. However, the state claimed not to owe salaries as at 24th November 2015.

Kebbi State’s total debt value accruing from staff salaries and emoluments is N8,778,594,714.78. The state received N7,080,000,000.00 as bailout fund and disbursed N2,617,152,577.20 with a balance of N4,463,975,420.27. The state claimed to have cleared all outstanding arrears on salaries as at September 2015.

NOTE:

The report indicates findings at the dates indicated above for each state. Subsequent changes may have taken place thereafter, which the various states and Nigerian Labour Congress are at liberty to bring to our notice for verification and further comments as the need arises.

This report is published to assist all parties eliminate unsubstantiated allegations and promote peaceful negotiations and understanding in the management of government processes.

This report comes under ICPC prevention mandate and states are welcomes to use this initiative.

ICPC Hqtrs, Abuja

April 23, 2016
Whither Kogi’s bailout fund?
SIR: After the euphoria that greeted his emergence and eventual inauguration as the Governor of Kogi State, Alhaji Yahaya Adoza Bello is gradually settling down to the business of governing Kogi state.

With high expectations birthed by the New Direction agenda, many in the state are waiting to taste the pudding as promised abundantly in the inaugural address of the Governor. Like the old maxim, the true test of a political leader is not how well he campaigned, but how effectively he is able to meet the responsibilities of the office.

For the 3.8 million people of Kogi State who have long been deprived of meaningful development, nothing matters more than a government that can muster the wherewithal to turn around the comatose state of social infrastructure and put the state on the growth trajectory that has eluded it in the last 24 years of its creation.

It appears though that nothing much can be achieved by the new administration which is reported to have inherited an empty treasury, unpaid salaries and hefty debt profile of well over N50 billion despite the shoddy job by the immediate past administration to cover up a number of domestic indebtedness.

Even with the debilitating state of affairs, which Governor Bello inherited, the administration has taken decisive steps in announcing a policy direction, which is a clear departure from the lacklustre past.

Within two weeks of taking over the affairs of the state, Bello was able to conclude negotiation with the organized labour in the state and convinced them to suspend the six-week old strike, which it embarked upon due to non-payment of salaries by the past administration. He also ensured payment of the October 2015 salary in fulfillment of the agreement reached with the leadership of the labour union in the state. The administration of Governor Bello ordered immediate restoration of water supply to Lokoja metropolis after nearly three months of water scarcity in the state capital.

Perhaps the most remarkable of Bello’s achievement in the last few weeks is his restoration of full financial autonomy of local government administration in the state. This means that all of the 21 Local Government Areas in the state will henceforth take full charge of financial resources of their respective local governments as allocated by the federal government. This decision came shortly after the governor ordered reinstatement of 15 illegally sacked local government chairmen in the state.

As things stand, Kogi State requires financial bailout to save the state from the transactional spectre where all that is received is shared among the workforce month on month. The Kogi bailout issue has been the most controversial of all the states that applied for fund under the federal government’s structured facility to enable state governments meet their obligations due to dwindling federal allocation to states.

The Kogi State government was said to have applied for N50. 8 billion bailout fund to offset outstanding salaries and pension arrears of civil servants in the state with a repayment period of 20 years. There was also a N10 billion infrastructure development fund, which is yet to be released to the state. The federal government is also indebted to Kogi State to the tune of over N20 billion for federal projects executed by the state government between 2003 and 2012 in road construction and the power sector.

It is time for the state government to expedite action in drawing the attention of the federal government to some of these financial obligations, which ought to have been settled before now. While the new administration is committed to exploring new ways of improving internally generated revenue to augment federal allocations, it is pertinent that whatever gaps were responsible for the delay in the release of the Kogi bailout is resolved without further delay.

If the New Direction agenda of Governor Yahaya Bello must translate into quick wins in social infrastructure, youth empowerment, agricultural development, education and public service reforms, the Kogi bailout must be secured to settle outstanding debts to allow the government save a little for capital expenditure from its revenues. This will no doubt enable the government to deliver the change for which the people voted for the All Progressives Congress in Kogi State.
- Dr. Yakubu Ozohu-Suleiman,
Ahmadu Bello University, Zaria
February 22, 2016
Lalong: Plateau yet to get full bailout loan from CBN

Plateau State Governor Simon Lalong has said the state is yet to get full bailout loan from the Central Bank of Nigeria (CBN).

He added that only N5 billion of the N20 billion meant for the state was released.

Lalong, who spoke at an All Progressives Congress’ (APC’s) media roundtable in Abuja, said he was doing everything to ensure that the balance of the bailout fund was released to his state to enable him continue his programmes.

He said he was discussing with the CBN to release the balance of the bailout loan, adding that the state had cleared backlog of salaries owed civil servants.

“We only owe two months salary.”

The governor said without the full bailout fund, he paid the salary arrears of local government workers.

He said: “I was at the CBN pursuing bailout loan for Plateau. The state was supposed to get N10 billion for salaries and N10 billion for infrastructure. But we got only N5 billion and with that, we cleared backlog of salaries.

“From last May to date we are not owing, except the ones we inherited. If I get my balance of N5 billion within a week, the outstanding debts will be cleared.”

Commenting on the Treasury Single Account, Lalong said: “Other states may be finding it difficult, not Plateau. We are implementing TSA. Immediately I saw the introduction of TSA by Mr. President, I called my accountant-general and commissioner for Finance and told them they must implement.

“I am not an accountant and at that time, I didn’t know the implication. But from what I saw about the advantages of TSA, I said let it be implemented in the state. I set up a committee and today it is being implemented. I don’t know why some governors are finding it difficult to implement TSA.”

February 15, 2016
Bailout: Amosun as study in prudence
It was originally derived from the 14th century Old French word, “prudence.” That French word, in itself also derives from the Latin word, “prudential” meaning “foresight, sagacity.”

Indeed, the word prudence is usually associated with wisdom, insight, and knowledge. Little wonder, therefore, that it was considered by the ancient Greeks and later on by Christian philosophers, most notably Thomas Aquinas, as “the cause, measure and form of all virtues.”

In other words, prudence is the mother of all virtues. It also refers to the exercise of good judgment, informed by intelligence and good character. Prudence requires the consideration of long term choices and implications of decisions, and the avoidance of biases that make us focus on instant gratification.

This, perhaps explain why, economists would describe a consumer as prudent if he or she saves more when faced with riskier future income. This additional saving is called precautionary saving.

Judging from this premise therefore, one can then logically come to the conclusion that no other word can better describe the decision of the Ogun State Governor, Senator Ibikunle Amosun, to opt for a 10-year repayment schedule for the bailout fund provided to states of the federation by the federal government.

Whereas the federal government had offered to the states a 20-year repayment schedule, Amosun, a chartered accountant and prudent manager of resources, chose to repay the bailout fund in 10 years.

Of course, that decision placed Ogun State in a class of its own. Ogun State is the only state in the federation to choose that path. If Ogun State had played along with the 20-year repayment plan, the current monthly deductions from its allocations would have been reduced by an amount in excess of N400m.

But that would have been a short-sighted decision. Governor Amosun, being prudent, knew that what was required of him is a consideration of long term choices in a manner that avoid biases that often make the average person to focus on short-term rewards while ignoring the long-term implications.

So by choosing a 10-year repayment plan, the governor is in the long run saving the good people of Ogun State over N80bn in debt service costs that would have been incurred over the period of the loan.

He is in fact not stopping there. The governor is also working very hard to ensure that he saves more for Ogun State by exercising the option of making lump sum repayments of the principal whenever the state has the capacity to do so. By so doing, Governor Amosun intends to fully repay the bailout loan before the end of his tenure of office.

“We don’t intend to leave any debt to the administration that will succeed us. Despite the apparent squeeze that this incremental repayment places on our finances in the short-term, we think it is the best decision for the people of Ogun State to have a much lower cost of debt overall, allowing financial resources to instead be directed towards the further development of our state,” the Governor said.

So, where is this confidence coming from in an era where resources are dwindling and some have started calling for a reduction of the national minimum wage?

Well, the answer again, lies in the meaning of the word prudence. “We took this decision because we are confident that the efforts we have made to date to diversify our revenue sources and strengthen our Internally Generated Revenue (IGR) base will continue to bear fruit as we proceed through our second term.

“Indeed it is the fruit of these efforts that has enabled Ogun State to continue to pay salaries and pensions as and when due, despite the notable reduction of funds from the federation account,” Governor Amosun said. This also explains why the Ogun State governor was able to pay the December 2015 salaries of all civil servants in Ogun State before Christmas Day and also paid 10 per cent bonus.

The Senator Amosun-led administration has repeatedly made it clear that it is not considering a reduction of the minimum wage or staff retrenchment as a result of the dwindling federal allocation.

And he sure has good reasons for this confidence. Even before the current economic downturn, Governor Amosun had been forward looking by embarking on efforts that led to a quantum leap in the IGR profile of the state.

Moving forward, the governor is not relenting in his administration’s drive towards further raising IGR through the provision of services to the people. Ogun State has a multi-pronged strategy to drive its revenues and cover recurrent expenditure. For instance, the Governor Amosun administration has been hugely successful in attracting major industries to Ogun State and this has had the effect of creating jobs for the people and increasing government revenues from taxes.

The governor has also repeatedly stated his administration’s resolve to make agricultural production and industrialisation, which is one of the five cardinal programmes of his administration, a major source of job creation and invariably a source of revenue for the government.

With the advantage of proximity to Lagos, the biggest market in Nigeria; being the gateway to the rest of Nigeria as well as proximity to the markets of the West African sub-region, Ogun State in fact holds the potential of seeing its revenue base grow steadily over the years.

This growth is even further guaranteed by prudent and effective management of resources which is one of the major hallmarks of the Governor Amosun-led administration.
- Soyinka, is Senior Special Assistant, Media, to Governor Amosun.
January 8, 2016
Governors’ vigil for bailout

Time to face reality

Nigeria’s governors are at it again! They want more money. But for how long will they be going cap-in-hand to Abuja to look for money or ‘bailout’, as the fine bara (begging) has now become famously known? Bailout gained currency in the country when the Federal Government, perhaps in some cases for want of what to do with public funds, started giving money to some sectors of the economy, ostensibly to get them out of the woods. Thus, the textile sector, the agriculture sector and even airlines benefited from this free money that no one is sure the government can ever recover. Anyway, was the money ever meant to be recovered?

In fairness to the governors, their financial fortune has dwindled over the last 12 months or so; with the continued fall in crude oil prices. It would appear reasonable too, as the governors argued, that they agreed to a minimum wage of N18,000 per month when crude oil was selling for $126 per barrel; it is now $41. Now that crude prices have fallen, they added, it is difficult for them to sustain the minimum wage. Zamfara State governor Abdulaziz Yari, who read the communiqué issued by the governors at the end of their meeting held at the Banquet Hall of the Presidential Villa, under the auspices of their umbrella body, the Nigeria Governors Forum (NGF) on Thursday, said: “The situation is no longer the same when we were asked to pay N18,000 minimum wage when oil price was $126 (per barrel) and continued paying N18,000 minimum wage when the oil is $41 and the source of government expenditure is from oil and we have not seen prospects in the oil industry in the near future”.

This is the extent to which I sympathise with the governors. Even then, the sympathy should be qualified because this is not the first time that crude prices would fall. And, as a major crude oil producer, we have always known that the international oil market is volatile and that this volatility is beyond our control. Yet, we did not as a country take any practical step towards providing any cushion such that we would not catch cold whenever crude prices slump or sneeze. Year in, year out, our schools have been turning out graduates (including governors) at all levels that were taught in the various schools some lesson about diversification of the economy. We have heard so many economic experts who wrote papers upon papers delivered at seminars and symposiums about this topic, and many of these papers only gather dust in government establishments; that is when the documents have not been handed to the groundnut seller across the road in the government offices in exchange for groundnut due to lack of space to keep them.

In other words, successive governments that should have seen the developments that eventually culminated in the slump in oil prices, including the discovery of shale oil, which have put everyone in Nigeria in a mess, merely paid lip service to diversification or, characteristically Nigerian, simply wished that no evil would befall oil prices in Jesus’ name!. Even when we lost the United States, our major crude customer, a thing that should have warned us further of the impending crisis, we celebrated the replacement of the U.S. by Russia and some Asian countries.

It is sad that I have to return to the Goodluck Jonathan administration so early after my leave, but it is inevitable because it was under his watch that oil prices plummeted last year and the only thing that occupied the then president’s mind was reelection; a thing he did not deserve considering the result he posted after running the country for about five years. At a time President Jonathan should be strategising on how to address the challenges facing the country’s jugular, he was busy polarising virtually everything that seemed a hindrance to his second term ambition; everything including the NGF some of whose members suddenly became exposed for the dullards that they were as they claimed that 16 was greater than 19 in an election involving just 35 persons!.

One point the governors must realise now is that the era of sharing is gradually coming to an end in the country. It’s now time to bake. Few persons, if any, have been talking about baking, the emphasis has been on sharing; we have dissipated so much energy on revenue sharing formula when we should be talking about revenue baking formula. This is a reality that our governors have to start accepting. And I want to believe we are getting there because the governors too tasted what a vigil is like. I hear their meeting lasted from Wednesday to the early hours of Thursday last week. So, when the poor too talk about vigil, the governors would have a feel of what they (the poor) mean. I hope the governors would permanently wake up to this reality on baking before it is too late. They gave that impression on Thursday.

And, when the time for baking comes, no one would need to tell state creation agitators that their time is up. Even as we speak, they seem to have gone into hiding since the cash crunch set in. The truth is; many of them will get silenced for life the moment states begin to fend for themselves. Even as things are, creation of some of the existing states was a mistake. because most of those who created them did so more for political expediency.

Without doubt, the Federal Government has to shed weight even under the lopsided federalism that we are practicing. But then, the governors have to resolve this time around that if the NGF must be relevant, they would use it more for functional rather than the dysfunctional purposes that many of them used it for under the Jonathan presidency.

It is not just a question of meeting President Buhari again as the governors resolved at the meeting; it is about being ready to take hard, even if painful decisions about unlocking the potentials buried in the bowels of many of the states and checking corruption. After all, they (governors) met with the president on the same issue in June; yet, not all of them paid their workers with the money as directed by the Federal Government which bailed them out then. The truth is; unless things improve, I foresee a situation where one of these days, all that the governors would bring back from Abuja would be the admonition given by one of the military commanders during the civil war when his subordinates told him that their food supplies at the battle front had been exhausted. The commander simply told the soldiers to “go and manage”. When he was reminded that there was nothing left to ‘manage’, he merely repeated himself; ‘I say go and manage’!

The solution to the economic crisis is not in reduction of minimum wage as some of the governors are thinking because the N18,000 minimum wage is ridiculously low. How many of the governors with girlfriends would ‘dash’ their mistress N18,000 for transportation even for a single trip (or a single shot) and expect to see her again?

My point is that, before the situation gets this bad, the governors should start thinking about alternatives to the Abuja ‘fine bara’. President Buhari may not be in a position to bail them out all the time if things do not improve, because he too will be under pressure from Nigerians to deliver the democratic dividend he promised them during the electioneering. Let our governors put on their thinking caps so that they won’t have to go and ‘manage’ when it is visible, even to the blind, that there is nothing to ‘manage’. In the same vein retrenchment does not seem a likely option so that we do not compound the present security situation. Rather, what is required is a pragmatic and holistic approach to getting our economy out of the woods and this involves all, the president, governors and other stakeholders.

November 22, 2015