The Nation Newspaper

Tag: DEBT

  • Lagos, debt and development

    Lagos, debt and development

    “In reality, however, the experience of most Third World states suggests that  public foreign debt has been used mainly to create or maintain fiscal deficits. More often than not, such deficits are caused not by greater public investment but by higher public current consumption or, in some cases, grandiose and unprofitable investment.” – Professor Adebayo Olukoshi

    Nigerians certainly have every reason to be wary, suspicious and contemptuous of debts purportedly acquired on their behalf by governments at all levels. Ever since the General Olusegun Obasanjo military administration obtained the first jumbo external loan of US$1 billion to finance major public sector projects, the country’s debt profile has risen steeply with negligible impact on national development. By the time of Obasanjo’s second coming as civilian President in 1999, the country’s external debt had risen to over $30 billion. In 2005, his administration celebrated what it described as Nigeria’s liberation from debt peonage. The Obasanjo administration had scandalously agreed to pay the Paris Club of creditors $12.4 billion of debt arrears upfront to have its remaining debt written off.

    Of course, the country’s external debt stock has been steadily mounting again. According to the Debt Management Office (DMO), Nigeria’s current overall external debt by both federal and state governments stands at $9.377 million. The DMO is confident that this debt is sustainable and within healthy limits within the context of the country’s Gross Domestic Product (GDP). The problem is that there continues for the most part to be very little to show for this debt partly due to the factors adduced by Professor Adebayo Olukoshi in the preceding quote. Corruption, inefficiency and poor governance continue largely to make a debt a hindrance to, rather than promoter of economic growth and development.

    Yet, the mismanagement of debt by irresponsible political and administrative elite does not discredit the fact that debt can be a viable vehicle for driving development. Debt is not a sin. It is not a crime. It is its misuse and abuse that is condemnable and obstructive of development. The sensational reporting of the external indebtedness of the Lagos State government by the media during the week clearly attempts to play on the ill-informed but understandable fear of debt by the general public. According to the reports, Lagos State owes 33.8% of the country’s total sub-national external debts. The state reportedly owes $1.01 billion of the total states’ external debt of $3.01 billion.  Components of this debt include $837.91 million from multilateral bodies and $82.5 million from bilateral sources.

    The loans obtained by Lagos State are for clearly stated purposes. For instance, in addition to an initial sum of $95 million, the Board of Executive Directors of the World Bank has approved another tranche of $42 million loan deal to support the EKO secondary school project. Now, is this loan helping to achieve the objective for which it was obtained? According to the World Bank, the EKO school project has systematically benefitted over 620, 000 students a year in 667 public secondary schools in Lagos State between 2009 and 2013. More concretely, the bank reports that student scores from beneficiary schools went up from 30% to 70% in English, 31% to 41% in Mathematics and from 27% to 65% in basic sciences. And the results of the June 2013 West Africa School Certificate (WASC) external examinations showed that 41% of students from beneficiary schools passed with five credits and above as compared to just over 18% before the Lagos EKO project was implemented.

    Again, the World Bank has supported Lagos State’s public sector reforms including fiscal sustainability, budget planning, budget execution and improving the investment climate with a loan of $200 million. Its aim is to help the state “sustain the strong momentum it had achieved in improving public services, facilitating inclusive growth and reducing poverty”.

    And what is the World Bank’s assessment of the state’s performance in this regard? According to its Country Director for Nigeria, Marie Francoise Marie-Nelly, “Lagos State has sustained rapid growth and achieved what many would not have believed possible and has managed to reduce its poverty headcount from 57% in 2004 to 23% in 2010”.

    The truth is that Lagos State offers a model of how debt can be utilised to drive development. In 2002, the Tinubu administration raised N15 billion from the capital market. The fund was expended on such development projects as the Global Computerisation Programme, Millennium Micro Water Works, Construction and Rehabilitation of high courts, waste management projects and massive construction of classrooms among others. The bond was fully redeemed in September 2009. The first bond taken by the administration of Governor Babatunde Raji Fashola (SAN) has been redeemed while the second tranche will be due for redemption by 2016. All over Lagos, there is concrete evidence of what the funds are being used for through the various projects being implemented in diverse sectors in an unprecedented manner. This on-going radical modernisation of infrastructure will elevate the economy of the state to a higher level while enhancing its capacity both to generate wealth and to repay its debt.

    Of course, there is still a lot to be done to get Lagos to the requisite level of development. For instance, the quality of grassroots governance needs to be radically overhauled. The local government councils can certainly do much better in constructing, rehabilitating and maintaining inner city roads. Better equipped, staffed and maintained primary health care centres will reduce pressure on secondary and tertiary health institutions. The Fashola administration can also do much more to reduce waste and the cost of governance. But overall, Lagos is far ahead of most states and the federal government on service delivery and provision of infrastructure. It is not generally acknowledged, for instance, that the entire country owes Lagos a debt of gratitude that the Ebola virus has been so effectively contained. If the Liberian, Thomas Sawyer, had entered the country through a state with a less alert and effective government, you can imagine what a terrible disaster it would have been for the whole country. In the management of its finances, including debt, Lagos offers a model for the rest of the country to follow.

    Rejoicing with Professor Adigun Agbaje

    It was the best of times; it was the worst of times. It was a season of hope; it was a season of despair. I paraphrase the famous opening words of Charles Dickens great novel on the French revolution, ‘A Tale of two Cities’. These are certainly not the best of times for Nigeria when, for instance, erratic viruses and lunatic terrorists pose such dangerous threats to life. Yet, there are also, daily, life and hope-affirming events and celebrations that are also expressions of faith in the possibilities of Nigeria and humanity. One such joyous occasions comes up today at the No. 3 Staff Quarters of the Cross River University of Technology, Calabar, when the families of Chief (Rtd Col.) Moses Effiong and Professor Adigun Agbaje, celebrate the traditional wedding of their children, Irene Iquo and Ayodamope Ikeolu.

    Professor Adigun Agbaje is one of Nigeria’s most eminent political scientists and a former Deputy Vice Chancellor of the University of Ibadan. He was one of a unique group of distinguished scholars who taught me the rudiments of political science at Ibadan. I remember in particular his foundational course on the ‘Logic and methods of political enquiry’ that taught us not only to detect crooked thinking but also to keep our own thinking straight. I am not surprised that his son, Ayodamope, also a social scientist, travelled far from his native Iwo in Osun state to choose a bride from the Niger Delta. Professor is one of the most broad- minded and detribalised human beings you can meet. Son has simply taken after the father. Love breaks down narrow ethno-regional barriers. The church wedding comes up here in Lagos on Saturday, September 27, at the Catholic Church of Presentation, Oba  Akinjobi Street, GRA, Ikeja. I am sure that many of Professor Agbaje’s students resident in Lagos will be on hand to celebrate and rejoice with a man who so selflessly imparted knowledge to us. Congratulations sir. I wish the couple a blissful and fulfilled married life.

  • Ambode says Lagos debt under control

    Ambode says Lagos debt under control

    •Inaugurates campaign office today

    A former Accountant-General in Lagos State and governorship hopeful on the platform of the All Progressives Congress (APC), Mr Akin Ambode, has faulted claims that the state’s debt is unmanageable.

    He spoke at the inaugural leadership lecture series organised by a political action committee, The Future Nigeria.

    Ambode explained that debt should never be analysed in isolation but considered in relation to the Gross Domestic Product (GDP), adding that most of Lagos’ debt went into financing projects to increase its revenue-generating capability and ensure it remains credit-worthy.

    When asked his vision for Lagos, Ambode said:  “I see a prosperous Lagos; a Lagos that is easily accessible, open to foreigners and Nigerians to pursue their potential; a safe and clean environment; a Lagos that allows every person to achieve their potential; a Lagos that knows no gender no race, no sex, no religion, no colouration; a Lagos that has connectivity and mobility; a 24-7 Lagos, a Lagos where the economy does not sleep at 8pm.”

    He dismissed the notion that the All Progressives Congress (APC) Is anti-poor, adding that the party wanted to give all Nigerians the tools to get out of poverty and progress.

    Ambode will today inaugurate his campaign office. The office is in Gbagada on the Lagos mainland. The event is expected to be graced by thousands of his supporters.

    Ambode, who hails from Epe, will interact with his supporters and inaugurate the women and youth wing of the organisations.

    A statement by his Special Adviser on Communications, Idowu Ajanaku, said Ambode’s vision to be the next governor of Lagos State is out of his desire to consolidate on the foundation laid by Asiwaju Bola Tinubu and Governor Raji Fashola.

    He said having served in the civil service for 27 of his 47 years, he was qualified to succeed Fashola.

    The aspirant promised that given the opportunity to serve as governor, Lagos would continue to be the pride of Lagosians and Nigerians.

     

  • CBN offers to pay $283.6m gas suppliers’ debt

    CBN offers to pay $283.6m gas suppliers’ debt

    The Central Bank of Nigeria (CBN) is working on modalities to enable it pay the $283.6 million owed gas suppliers.

    This decision followed a meeting held by the Ministries of Petroleum Resources, Power, CBN and the Nigerian Electricity Regulatory Commission (NERC), The Nation has learnt.

    The huge debt has been a major reason gas suppliers have been reluctant to meet their supply obligations to power stations. This has consequently rendered most of the generating plants idle. The few power plants that received gas, according to the generation companies, got insufficient supplies, making the power assets to operate at sub-optimal levels.

    A source at the CBN told The Nation that the apex bank is bidding its time because it wanted to make sure that the necessary guarantees from the gas suppliers and power generation companies are in place, and that they would not fail in their responsibilities after the debts would have been settled.

    The source said: “The processes of payment are being finalised. We had to make sure we get commitment and undertaking from the gas suppliers and power generation companies to deliver. The processes will be concluded by second week of September and payment will be made same week.”

    The  payment of the debt is one of the measures the government is adopting to tackle the power supply challenge and its associated problems. The new owners of the privatised power assets have attributed their financial and operational woes to lack of gas supply. They said  power supply from the national grid constitutes only between 30 per cent and 40 per cent of their customers’ demand. The development, they added, also adversely affected their revenue collection and is worsened by technical and commercial losses.

    “This is part of measures to guarantee sustainable solutions to the gas supply problem. The government is convinced that the payment of the debt will help boost supply of gas to power stations, which in turn will boost electricity supply to industrial and residential consumer. This will consequently help in bringing down the cost of production by manufacturing and services companies that currently depend 100 per cent on power generating sets,” the source added.

    The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, had at a joint press briefing with the Minister Power, the CBN Governor, and NERC chairman, explained that the payment of the debt was one of the measures taken to improve electricity generation in the country.

    She said stakeholders in the power sector came together to form synergy to be able to solve the problems in the power sector. She noted that inadequate gas supply to power plants had been a major challenge to government’s power sector reform.

    “Inadequate gas supply has been ongoing for almost 20 years or more and it was inherited by this administration. Since we came in, various interventions have been put in place to bridge the supply challenge. Although gas supply has grown significantly in the last two years to about 1.5 billion cubic feet per day, demand growth continues to surpass supply, creating a short term gas supply crisis,” she added.

  • Bauchi APC demands information on govt loans

    The All Progressives Congress (APC) in Bauchi State and Mallam Musa Idris Hardawa have sued the Bauchi State government for failing to give them information on its debt profile.

    The case is before the State High Court presided over by Justice Abdulkadir Hussaini Suleiman.

    Counsel to the plaintiffs, Kassim Abdul Hamid, said his clients wrote the government, demanding details of over N8 billion loan taken by it, but their request was declined.

    Hamid said: “Online reports indicate that the state government allegedly took a N15 billion loan to build houses for former Governor Adamu Mu’azu; his deputy, AbdulMalik Mahmoud; Governor Isa Yuguda; and his deputy, Sagir Aminu Saleh, without reference to any statutory authority.”

    The plaintiffs alleged that the government had no means of repaying the loan, adding that this was responsible for the reduction of the salaries of civil servants and over N10 billion pension arrears.

    They urged the court to compel the House of Assembly and the auditor-general to probe the government’s accounts and provide information to the public on its debts.

    The prayed the court to also compel the government to explain how it allegedly acquired N25 billion debt.

    Justice Suleiman adjourned hearing to an unfixed date.

  • Debt and development

    Debt and development

    •We are gradually returning to the dark days

    The implications of the magnitude of Nigeria’s internal and domestic debt for the country’s growth and development have been of enduring public interest. This important issue was once again brought to the fore by the President of the Institute of Chartered Accountants of Nigeria (ICAN), Mr Chidi Ajaegbu. While condemning the current time lag as well as low level of budget implementation in Nigeria, he also strongly cautioned against the subsisting practice of funding recurrent expenditure with debt.

    In the words of the ICAN President, “The practice of funding recurrent expenditure through debt is unacceptable. It is tantamount to spending unearned income and therefore mortgaging the future by abating possible future economic development. This negative policy should be addressed urgently as it is unsustainable”.

    We identify fully with Mr Ajaegbu’s concern with the persistent defects of Nigeria’s budgetary process, particularly the management of the country’s national debt. Without a purposeful, disciplined and efficient budgetary system, the country’s national socio-economic and developmental objectives will continue to remain in abeyance.

    Of course, the incurring of national debt – internal and external – is not by itself the problem. In a situation of paucity of resources for rapid socio-economic development, debt can indeed be a viable vehicle for accelerating progress. This, however, presupposes that such borrowed funds are transparently and prudently utilised to boost infrastructure and stimulate the economy’s capacity for self-reliant development.

    Unfortunately, as has always been the case, there is hardly anything to show for Nigeria’s level of indebtedness as the country continues to witness so-called growth without development and the majority of her citizens sink steadily deeper into poverty.

    Figures recently released by the Director-General of the Debt Management Office (DMO), Dr Abraham Nwankwo, indicate Nigeria currently bears a domestic debt burden of N8.9 trillion while her external debt stock stands at $9.3 billion. According to him, the Federal Government’s external borrowing from multilateral institutions amounted to $3.826 billion while her loans from bilateral sources totalled $3.013 billion. On their part, state governments sourced $2.904 billion from multilateral institutions and obtained $108.9 billion as loans from bilateral sources. Even though, Dr Nwankwo sounded quite confident that Nigeria’s debt profile was still quite healthy since she has a favourable debt-to-Gross Domestic Product (GDP) ratio of 12.5% against an acceptable global ratio of 25%, there is still need for a lot of caution. This is why we agree with his position that the country will not engage in borrowing spree without caution despite the re-based economy that has enhanced Nigeria’s capacity to borrow.

    We recall that in October 2005, a lot of fanfare attended Nigeria’s exit from the Paris Club of debtors. The country paid $12 billion upfront to have her external debt stock of $30 billion cancelled. In a nationwide broadcast on that occasion, President Olusegun Obasanjo attributed the indefensible external indebtedness to “political rascality, bad governance, abuse of office and power, criminal corruption, mismanagement and waste, misplaced priorities, fiscal indiscipline, weak control, monitoring and evaluation mechanisms, and a community that was openly tolerant of corruption and other underhand and extra- legal methods of primitive accumulation”. These ills have only worsened with time, creating the strong probability that our renewed growing indebtedness will have negligible impact on national development.

    It is disturbing, for instance, that President Goodluck Jonathan is requesting the National Assembly’s approval to borrow $1 billion to fund the anti-terror war against Boko Haram even though N868.127 billion was allocated to defence in the 2014 budget. The reckless spending by public officers at all levels suggests that with greater prudence and less corruption, the country can progress with much less borrowing.

  • Dolphins settle players’ debt

    Dolphins settle players’ debt

    The General Manager of Dolphins Football Club, Joe Johnson has said  the club is now free of debts owed  its players.

    Johnson, while addressing the press in Port Harcourt, said it was not something to shout about but since it was a big media issue when the League Management Company (LMC) listed Dolphins amongst clubs that owed players, it became important to use the same source to say the club is now clean.

    According to Johnson, the club is now up to date with payments.

    “We have paid everything we owe the players, at least up till the last match we played in the League on the road to Sunshine Stars.

    “All outstanding match bonuses have been paid to date and of course, we do not owe salaries,” Johnson said.

    On the issue of signing on fees being owed for last season, Johnson said the club has done all within its powers which are the salaries and match bonuses but anything regarding signing on fees belongs to the Rivers State government.

    “We hope to get a listening ear from the governor as promised by the sports commissioner and we believe that it will be sorted out before the end of the season,” Johnson said.

    Dolphins’ defender, Victor Ezuruike, confirmed that the club is no longer indebted to the players but added that they await the Rivers State government to fulfil their part of the bargain.

    “Yes, the monies were paid just before the game against Sharks last weekend. We also talked about the enhanced salaries and last season’s signing on fees and an agreement was reached.

    “We just hope that we can get it as the money is very important to us,” Ezuruike said.

  • 18 firms raise N225.3b bonds in eight years

    18 firms raise N225.3b bonds in eight years

    In the rush to raise corporate bonds, 18 companies have issued N225.38 billion corporate bonds in eight years in 23 deals.

    According to documents accessed from the Debt Management Office (DMO) by The Nation, UBA Plc issued the largest bond value in two installments of N20 billion in 2010 and N35 billion in 2011. Both bond insurances had 13 and 14 per cent coupon values with seven years’ maturity date.

    Flour Mills of Nigeria Plc issued the single largest corporate bond worth N37.5 billion. The bond, which was issued in 2010, had a coupon value of 12 per cent with five years tenure thus putting its year of maturity at 2015.

    The Federal Mortgage Bank of Nigeria (FMBN) did not want the private sector to  overrun the corporate bonds market, so in 2012 it issued a N30.56 billion bond with a 17.25 coupon and five years’ maturity tenor.

    Others in the elite 23 corporate bonds issuers between 2005 and 2013 were Acess bank (N1.9 billion), Crusader Nigeria Plc (N4 billion), Custodian and Allied Insurance Plc (N1.17 billion), C and I Leasing Plc (N2.24 billion and N0.94 billion), Guaranty Trust Bank Plc (N13.17 billion), NGC Sterile (N2 billion), UACN Property Development Company Plc (N15 billion).

    Chellarams Plc issued (N1.5 billion and N0.54 billion) corporate bonds in 2010 and 2012; Dana Group (N8.01 billion), Sterling Bank (N7.5 billion), Lafarge/WAPCO Nigeria Plc (N11.88 billion), Nigeria Aviation Handling Company Plc (N15 billion and N2.05 billion), Tower Funding (N4.63 billion), Crusader Insurance (N2.26 billion, zero coupon), First Securities Discount House (N5.53 billion) and La Casera (N3 billion).

    On the other hand, six banks issued Corporate Eurobonds in the International Capital Market (ICM) valued at $3.4 billion between January 2011 and this month.

    Some of the banks are Guaranty Trust Bank ($500 million and $400 million), Access Bank ($350 million and $400 million), Fidelity Bank ($300 million), Zenith Bank ($500 million), Diamond Bank ($200 million) and First Bank ($450 million and $300 million).

  • Argentina unveils U.S. debt plan

    Argentina’s president has announced plans for a debt swap to try to avoid a United States U.S. court ruling that pushed Argentina into a second default.

    An emotional Cristina Fernandez de Kirchner proposed legislation that would return control of its debt to the government.

    “Excuse me if I get a little nervous, I usually have more poise,” she said.

    A New York court last month blocked an interest payment to bondholders as a result of a row with U.S. investors.

    The $539million payment was for bonds, issued under U.S. legislation, that were restructured following Argentina’s default in 2002.

    The draft legislation would replace Bank of New York Mellon as the bondholders’ trustee with state-run Banco Nacion, which would enable Argentina to pay the interest owed to the majority of bondholders who agreed to the deal.

    Bank of New York Mellon has been forbidden from transferring funds.

    Ms de Kirchner has refused to give in to the “hold-outs” demanding full payment and said the new voluntary deal would be in line with the terms of agreements made in 2005 and 2010.

    More than 90 per cent of creditors agreed to accept large losses at the time.

    “If bondholders decide – in individual or collective form – to ask for a change of the legislation and jurisdiction of their bonds … the economy ministry is authorised to implement a swap for new public bonds under local legislation,” Ms de Kirchner added.

    “I really feel we are living a moment of great injustice in Argentina.”

    However, analysts said the move dashed hopes that Argentina could strike a deal with the hedge funds demanding full payment and allow the country to move out of default and return to global capital markets.

  • Osun’s debt stands at N39b, says commissioner

    Osun’s debt stands at N39b, says commissioner

    Osun State Commissioner for Finance, Budget Development and Economic Planning Dr. Wale Bolorunduro has said the state’s debt stands at N39 billion.

    Bolorunduro, who spoke with journalists yesterday in Osogbo, the state capital, said the Governor Rauf Aregbesola’s administration had paid N1.2 billion from the N4 billion pension arrears inherited from the past administration.

    He said the state debt was not as alarming as it was being claimed by the opposition parties.

    His words: “The total debt of the state is N39 billion, including the bond which has defrayed for two years now and the money owed contractors handling various ongoing projects in the state. The recent payment of salary, pension and gratuity to people was not a panic measure and not because of the coming election, but mainly on prudent management of the state’s lean resources.

    ‘’The opposition, mainly the Peoples Democratic Party (PDP), has nothing to say than to lie about the finance of the state. The party is known for causing confusion, so the motive of its crying. The Debt Management Office is a Federal Government agency and it has come out openly to clear Osun State of having debt beyond its capacity.

    “The total debt of the state was not beyond redemption and the state is buoyant to carry out its day-to-day duties to all citizens. The philosophy of the present administration is based on the welfare and good living standard of the people and unlike in the past where the treasury of the state were looted and did not follow due process for seven years under the PDP.

    “Despite challenges posed by the dwindling revenue to the state from the Federal Government, the state government has paid a total sum of N23.5 billion to pensioners as pension and gratuity to retired workers.

    “The administration of Ogbeni Rauf Aregbesola has paid to the state’s pensioners the sum of N24.3billion as pension and gratuity, while the local government staff, including teaching staff of primary schools and non-teaching staff of the local governments had received N13.6 billion.”

  • I’m ready to defend N6bn debt allegation, says Nyako

    I’m ready to defend N6bn debt allegation, says Nyako

    Three die as youths protest plot to sack Nasarawa governor

    Former Adamawa State Governor Murtala Nyako remained defiant yesterday, saying he is ready to defend his integrity.

    Security agencies and the Economic and Financial Crimes Commission (EFCC) are after Nyako, who was impeached in hazy circumstances on Tuesday, but he remains in high spirits, according to an aide.

    Nyako is accused by Acting Governor Umaru Fintiri of plunging the state into a N6billion debt.

    He said the loans he took, including the controversial N6billion, were approved by the House of Assembly.

    Also yesterday, The Nation learnt that former Deputy Governor Bala James Ngillari was under pressure to go to court to seek his reinstatement as acting governor “because he was forced to resign”.

    Nyako, who spoke through his Director of Press and Public Affairs, Ahmad Sajoh, said he had nothing to hide on his tenure.

    He said: “Admiral Murtala Nyako is ready to defend himself on any allegation in an open court and under a fair system.

    “But he said in a system where impunity is the order of the day, he cannot get a fair hearing. How do you expect a goat to get fair hearing in a court presided over by wolves?”

    On the alleged N6billion debt left behind by Nyako administration, Nyako’s spokesman said: “The Acting Governor has not even settled down; he has not been briefed by those in charge and he is declaring debts of about N6billion.

    “This shows that the Acting Governor is acting a script. We knew the script was written long ago; they will release sleaze materials to vilify Nyako. That is why they have sent security agents and EFCC operatives after him to cast aspersion on Admiral Nyako.

    “If Nyako left N6billion debt, all the loans or debts were approved by the House of Assembly, which was presided over by the Acting Governor in his capacity as the Speaker. So, you can see that they are acting a script.

    “The whole thing borders on what Nyako said about how President Goodluck Jonathan is tackling the insurgency in the country. They were not happy and they decided to remove him from office. But is he not being vindicated now?”

    Ngillari’s plan to go to court is believed to have the backing of

    Peoples Democratic Party (PDP) chief, including some National Assembly members.

    The plot will lead to Fintiri’s removal.

    Investigation by our correspondent revealed that some stakeholders were unhappy that Ngilari was forced to resign without following the provision of the 1999 Constitution. A source said: “Ngillari was either forced or frightened to write the resignation letter by members of the House of Assembly.

    “But they shot themselves in the foot when they asked him to write the resignation letter to the Speaker, instead of the governor.

    “What happened was that Ngillari, on Tuesday, wrote the governor on his resignation from office.

    “But in their desperation to remove the former governor, the House of Assembly asked Ngilari to write the Speaker directly because Nyako was in Abuja and it would take time for him to communicate Ngillari’s decision to the Assembly.

    “Ngilari withdrew the resignation letter he sent to the governor and wrote a fresh one to the Speaker, which was a violation of Section 306(5) of 1999 Constitution.”

    Sajoh had in a statement said: “We wish to state categorically that Section 306 (5) of the constitution of the Federal Republic of Nigeria 1999 as amended requires that the deputy resign not to the House of Assembly but to the Governor. As at the time the supposed resignation was said to have been tendered in the House, Murtala H. Nyako was the governor of Adamawa State.

    “No such was written to him, none was received by him and none was approved by him. It should, therefore, be known that in the eyes of the law, the deputy governor has not resigned. Barrister Bala James Ngillari is still the Deputy Governor of Adamawa State.

    “This clarification is necessary to avert another subversion of the constitution, since the order processes relating to the impeachment saga have all been in contravention of the constitution and the law. We wish to observe that the continued abuse of the constitution and the law of the land will spell doom for our democracy.”