Worrisome debt profiles of states
BEFORE the Domestic Debt Data Exercise and Solvency Test conducted in the 36 states across the country by the Debt Management Office, DMO, in December 2012 which its findings were recently published in The Guardian newspaper, many Nigerians were quite aware that some states were in serious financial quagmire to the extent that they were surviving on borrowing.
Some of the state governments have not helped matters as they fail to cut the their coats according to available cloth. While some of them have been able to do so prudently by plugging wastages and extravagance in governance, others have continued to be wasteful in managing the funds at their disposal.
With this development and 2015 fast approaching, some politicians in a desperate bid to score cheap popularity and gain relevance have falsely accused their state governors of reckless borrowing from financial institutions to run and develop the states. Some of these politicians, however, were not able to substantiate the allegations with accurate and verifiable data before now.
Prominently among such politicians were ex-governors who had fallen out of favour with their successors due to the former’s overbearing influence and interference in governance, which the latter have stoutly resisted. For many of us from Abia we had initially believed such allegations by some politicians from the state, thinking that they had accurate information with regards to government activities.
Besides, in what looked like lending credence to the allegations, the Central Bank of Nigeria, CBN, had in January this year warned money-deposit banks in the country against the continued lending of credit to states, local councils and their agencies because of the risk implication.
So we had before now believed totally the allegation by the former governor of Abia State, Chief Orji Uzor Kalu that his successor, Chief Theodore Orji, has been massively borrowing from financial institutions to run the state, thereby putting the state into high profile debts. Though I am aware that sometime at the beginning of his administration, Orji tried to raise bonds from the capital market for developmental projects, but the idea was heavily criticized by opposition party members in the State Assembly then. That was how the idea became dead on arrival. Since then we have not heard anything publicly about state government borrowing.
Relatedly, Kalu had, ahead of the 2011 general elections, in a publication claimed that Orji had been borrowing since he came into office even though he did not inherit any debt from him (Kalu) in 2007. But Orji’s administration presented a documentary evidence which were advertised in newspapers showing that they inherited more than N29.9 billion debts from Kalu’s administration which included backlog of council workers salaries and arrears, adverts placed during Kalu’s presidential campaign, and others.
Orji’s administration insisted that it had not borrowed and is not borrowing to run and develop the state since it came into office, rather it has been servicing the debts it inherited from its predecessor and at the same time utilizing the state resources prudently to provide the expected democracy dividends for the people.
But following the release of the DMO Report on states debt profile and solvency across the country, I had thought Abia would top the list of indebted states in the country considering the massive ongoing and completed projects that were scattered across the state, coupled with the allegations by Kalu that the present government has been surviving by borrowing from financial institutions.
But to my greatest surprise, Abia was not among the high profile indebted states in the country today. The Report has, therefore vindicated the AbiaState government and some other state governments that have been falsely accused by the political enemies of the governors without accurate data from relevant authorities. The DMO report has shown it all and Nigerians can now separate the rice from the chaff in respect of their states’ debt profile and financial solvency status.
Though the Report showed that Abia, like other states is owing, but not as high as alleged by political enemies of the state. All things considered, it is expected that the state will owe considering the many completed and ongoing projects in the state. With the Report, it is now clear that with the rapid and unprecedented developmental projects on ground in Abia today, the government has shown a good example of prudent management of both material and human resources. It is a development which has placed the state among the fastest growing investment-driven states in the country today with a unique peaceful and secured environment. If truly Governor Orji has been borrowing from financial institutions as alleged by Kalu and others, there is no way such would not reflect in the DMO Report.
This Report has not only exposed the pathological lies and armchair criticisms of some politicians and their cohorts against their state governments, it has equally shown that the Abia government, in the face of overwhelming challenges, is performing, in spite the little resources at its disposal.
Looking at the high profile debts of some of the states as indicated in the Report and the level of infrastructural developments in such states, one would be forced to ask what do their state governments do or are doing with their Monthly Federation Allocation, Internally Generated Revenue, IGR and the borrowed funds. This is because what were on ground in the states in terms of infrastructural developments and others are not commensurate with their debts profile.
This situation puts a question mark on the financial prudence and accountability of some state governors, especially when a state like Abia with its low profile debt could achieve much within a short period. More worrisome is the facts that some states with high debts profile have nothing to show or justify such debts in the area of human and infrastructural developments.
Again all those who have falsely deceived the public for so long by accusing the Abia government of under-performance and over borrowing should openly apologise to the state government and the people of the state.
Mr. JUDE CHIBUOYIM, a commentator on national issues, wrote from Owerri, Imo State.