Government’s debt profile worldwide is always kept outside the purview of the public. It is an ostensible item in some climes particularly in advanced countries, but in most African countires, mum is usually the word. Except it becomes pricing for some relevant agencies charged with the responsibility to probe the government or the principal, then the figures are churned out for public scrutiny as a way of forstalling outrage.
Apparently, there is no government in the world that does not owe or does not collect loans which eventually become debts for the incoming administration.The 30-year-old and 11-months-old Akwa Ibom State is no exception to this rule. For instance, it shared assets and liabilities including debts with Cross River State and since then the state’s debt kept on soaring.
To exacerbate the debt charts, both past military and civilian administrations in the state have been obtaining loans from World Bank or foreign agencies or commercial bank as counterpart funding and for execution of development projects. Whether the money has been judiciously used by the government in power is another conundrum.
Nigeria Extractive Industries Transparency Initiative, (NEITI) once observed ‘’What is even more disturbing is the fact that the disbursement of these loans is shrouded even in greater secrecy, and unknown to the public on whose behalf the loans were sought, and to the civil society groups that monitor spending by states. In all of these, the people’s representatives at the various states’ assemblies remain uncritical of the spending culture of the executive arms, as well as their endless request for more loans.’’
Akwa Ibom Government’s Stand On Debts
From the era of Brigadier Tunde Ogbeha, retired (though his era was brief) as the pioneer military administrator of Akwa Ibom to Udom Emmanuel administration, members of the public, pressure groups and opposition politicians always mount pressures on government in power and successive government to render account- costs of development projects, contractual obligations and actual debt profile, among others- to the ruled.
When Senator Godswill Akpabio, took over power as governor of Akwa Ibom State, the public mounted pressures to disclose the amount inherited and debts of the state from his predecessor. While in power even after leaving office, the same public and people pressurised governor Udom Emmanuel to disclose debt of his predecessor. It only sounds like a fairy tale when the incumbent gives the impression that his predecessor is guilty in committing indebtedness. After exit from office, the occupant of the office is also required to render accounts during the tenure of his office.
In bowing to such pressure, Akan Okon, the then Akwa Ibom Commissioner for Finance stated that state government owed commercial banks N64.5 billion when Udom Emmanuel took over from Godswill Akpabio as governor.
Mr. Okon who spoke in 2016 in Uyo during a conversation on #ProsperityWithoutOil, organised by the Independent Newspaper Publishers Association, said the state government decided to restructure the debt into federal government bond so as to lessen the burden of servicing it.
Mr. Okon was Commissioner for Economic Development while Mr. Emmanuel served as the secretary to the state government in the Akpabio’s government.
Premium Times quoted him saying “The loan was to be repaid within a period of three years, and the debt servicing obligation was in the region of N3.5 billion every month.
“Given what is on ground now, if we receive N7 billion monthly and pay out N3.5 billion, what is left won’t even be enough to do anything,” Mr. Okon said, adding that Akwa Ibom’s monthly revenue from the federation account in the last 10 months wasn’t up to one-sixth of what it used to receive some two to four years ago.
He said the window provided by the federal government bond allowed the state to pay back the loan in 20 years.
Like a fray, Barr. Assam Assam, SAN and Barr. Edet Eyo Bassey in their different publications claimed that Akpabio’s total debt was N500 billion.
Speaking on Channel TV, Assam, a one-time Attorney-General and Commissioner for Justice stated “At the coming of this present administration, the debt profile of Akwa Ibom State stood at about N500 billion. Godswill Akpabio had owed Julius Berger about N58 billion. At a point, Julius Berger had locked the Ibom International Stadium, preparatory to an important match.
Now, the money that Governor Udom Emmanuel gave to Julius Berger, the Company decided to redirect whatever monies they got from Udom to offsetting the debts Godswill Akpabio owed the company. I know all these because I was the Attorney-General.”
But Jackson Udom, spokesperson to Akpabio (the former governor of the state) issued a statement stating that the Akpabio administration left behind only N60 billion in debts owed to the banks.
The statement listed several landmark projects which Akpabio also built, some of which it called ‘revenue enablers’, but which the Udom administration has curiously left unused.
Akpabio speaking with supporters on Sunday, August 26 hinted that he collected N80 billion, repaid N30 billion and left a debt of N50 billion, though the state government has not recated or confirmed the rebuttal of the ex-governor.
NEITI And NBS Reports On A’Ibom Debts
Sunday Magazine published that as at December 2016, the debt burden of states had risen to N3.342 trillion, that is 55.15 per cent of the 2016 budget of N6.06 trillion, and 45.8 per cent of the 2017 budget estimate of about N7.3 trillion, according to Nigeria Extractive Industries Transparency Initiative, (NEITI).
The NEITI report lists Lagos, Delta, Osun and Akwa Ibom as states with the highest debt profiles, totalling N1.262 trillion. The figure represents about 38 per cent of debts owed by the 36 states.
Lagos was indebted to the tune of N603.25 billion, Delta owes N331.95 billion, while Osun and Akwa Ibom indebted to the tune of N165.91 billion and N161.23 billion respectively.
In the last five years, states like Plateau, Ogun, Delta, and Nassarawa, have consistently increased their borrowing as shown in another report published by BudgIt, a local civil society organisation that specialises in budget monitoring.
For instance, Delta State’s debt profile rose from N93.3 billion in 2011 to N331.95 billion in 2016; that of Ogun State rose steadily from N4.5 billion to N103.75 billion; and Plateau State moved its own from N24.2 billion to N104 billion, all within the period of five years.
PREMIUM TIMES had on January 10, 2018 published that Akwa Ibom state’s N155.4 billion local debts as at December 31, 2016, was the third highest in the country, according to the Debt Management Office while Lagos State has the highest with N311.7 billion, followed by Delta State with N241.3 billion.
The National Bureau of Statistics (NBS) says that the Akwa Ibom state government owes a total of N173 billion in foreign and local debts.
The Propeller had on September 20, 2017 under the headline Akwa Ibom debt portfolio hits 173 billion naira published that the state government owes $51,109,045.13 in foreign multilateral debts and N155,431,514,524.27 in local debts. But current dollar-naira exchange rate, the state’s debt profile amounts to more than N173.319 billion in June this year.
Investigations by Propellerng.com showed that Akwa Ibom state domestic debt has had a steady rise since 2015 while external borrowings have decreased.
Udom Emmanuel’s Loan Packages
Investigations by Straightnews showed that the Udom Emmanuel administration had secured N32 billion loan from the World Bank to control flood and erosion in the state.
Stating this in Uyo when he declared open a two-day workshop on “Enhancing Disaster Management in Akwa Ibom State,’’ Emmnauel represented by Moses Ekpo, deputy governor, said that disasters do not respect climes or geopolitical locations, adding that they could only be subdued by knowledge and preparedness.
“The Government has successfully secured collaboration with the World Bank for a N32 billion project which would be executed in partnership with the Nigerian Erosion and Watershed Management project to control flood and erosion in the state.
“My administration in the last two years has placed premium on efforts at interventions during moments of disasters such as fire outbreaks, building collapse, floods and windstorm,” Mr. Emmanuel said.
Another investigation by Straightnews showed that March 30, 2016, the Akwa Ibom State Government under governor Emmnauel secured the state House of Assembly’s approval to serve as guarantor for a N10 billion bank loan for a contractor handling the dualisation of Etinan-Ndon Eyo Road in the state.
The loan, from the United Bank for Africa, is with an interest rate of 14.5 per cent per anum and will run for 36 months, according to a statement from the House of Assembly.
The 29km Etinan-Ndon Eyo Road, awarded to Wizchino Engineering Limited by Mr. Emmanuel’s administration, connects Etinan with Onna local government area where the governor comes from.
The House also gave Governor Udom Emmanuel approval to get a separate N5 billion loan for the state government.
The House, which did not give details of the loan, said the money was “to enable the government complete ongoing road projects in the state.”
Again, Akwa Ibom State House of Assembly approved a loan request of N1.9 billion to enable the state government under Emmnauel to pay its counterpart fund for the provision of infrastructure in public schools.
The loan approval was given the governor on February 19, 2017 by the House.
So far, Udom Emmanuel administration has collected not less than N50 billion loan, though the administration is alleged to have collected close to N950 billion from the state and local government allocations from the Federation Accounts Allocation Committee, FAAC since May 2015 till date.
From the available statistics, Akwa Ibom government’s debts keep on soaring to the heavens. As at December 2016, DMO published N155.4 billion; NBS said N173 billion while NEITI published N161.23 of Akwa Ibom debts.
The Emmanuel’s government inherited a debt of N64.5 billion from Akpabio administration, according to Akan Okon, the then state commissioner for Finance.
Sunday Udom, a retired bank manager admitts ‘’State governments in the country have been collecting compounded loan in that the principal is refunded with interest. And Akwa Ibom government is part of this.
On enquiry how the loan repayment is carried out? He responded ‘’It depends on the schedule template. Before any loan is collected, there are conditions in meeting the terms of the facility. Normally, the debtor and the creditor must heed to loan covenant. This specifies what the loan will be used for and how the loan is to be repayed.’’
Talking about debts inherited and loans obtained by ex-governor Akpabio, the revered banker said ‘’The debts inherited and the loans obtained by the Akpabio administration fall under non-performing loans since the time has lapsed. The Debt Management Office will restructure and issue collateral on how the facility is to be repayed by the incumbent so that he can continue to meet other financial obligations without hitch.
Commenting on the loans obtained by Emmanuel administration, Udom explained ‘’But the loans collected Udom Emmnauel (since he is still in power) falls under performing loan in that the government is still meeting the conditions under which the loan was granted and is still repaying as and when due in line with the loan agreement.
‘’In fact, in the performing loan, monthly allocation from the Federation Accounts Allocation Committee, FAAC, is used as a collateral to get the loan so that the refunds and accruable interest will continue to drop in the bank account. It may be a conduit in that the bank and the collector may benefit from the compounded interest deducted as agreed.’’
In the real sense of it, elected public office holders even appointees where the principals give consent are usually seduced to obtain loans. Since the chairmen and governors cannot cross hurdles the Federal Government places in obtaining foreign loans, they resort to obtaining the facility from the commercial or Micro-Finance banks.
Local government chairmen, governors and presidents are not saints in obtaining loan because they maximally derive intrinsic benefits from the facility. By so doing, they pile debts for their successors and the vicious circle keeps on swirling. Between the banker (lender) and loanee (debtor), Quid pro quo– you rub my back, I rub your back- is the language.