By Emmanuel Aziken
The decision of the Delta State government to obtain a N50 billion bond from the nation’s capital market has like in most ordinary things in the state stirred a rumpus. What is behind it?
Given the presumed surplus of cash flowing into the coffers of the Delta State administration the decision to float a N50 billion bond for capital infrastructure was an issue that did not escape journalists during an interactive session with Governor Emmanuel Uduaghan not too long ago.
“All over the world, bonds are taken by government to fast track development and there is no government that has embarked on comprehensive development that has not taken bonds,” the Governor said.
Giving the specific reasons for his resort to the capital market, Uduaghan said:
“There are two reasons; first it is cheaper than taking loans from the banks. Secondly, the rate of payment is quite long. So they are the cheapest source of funds for development. So, there is no way we can get all the adequate infrastructure we are talking about, because what is very critical now is to provide infrastructure; infrastructure to ensure that we have the enabling environment for job creation.”
The N50 billion bond issue which has now been fully subscribed like many things in the Big Heart state has now turned into a political rumpus. Supporters and antagonists of the administration have put the bond issue on the platform of full politics with the attendant cloak and dagger intrigues.
The Democratic Peoples Party, DPP the main opposition in the State led by Chief Great Ogboru was first to draw issues on the bond issue with a statement issued by the party’s state chairman, Chief Tony Ezeagwu.
In the statement the DPP made sundry allegations of mismanagement against the state administration accusing the government of wasting the state’s resources despite what it alleged was the massive inflow of funds from the federation accounts. The kernel of the allegations by the DPP is that the administration has not been able to complete one significant project despite what the party claimed was the payment of billions of naira for several of the projects.
It was an allegation that understandably rustled feathers in the state prompting many stakeholders in the state to enter the fray, many of them on the side of the government.
While many were quick to rush to the defence of the Governor the seeming faux-pas of the State House of Assembly in suspending sittings on account of the failure of many government contractors to complete their projects came to the fore.
The legislative House had sometime in October resolved to suspend sittings sine die until the contractors returned to work.
Whose interest was the State House of Assembly protecting when the legislative House which should ordinarily have the oversight over all other arms of government abandoned its own work?
Remarkably, the DPP lurched into the gaffe of the legislative House when it claimed that their action was a vote of no confidence on the Governor.
Commissioner gives clarification
The State commissioner for information, Barrister Chike Ogeah in a statement seeking to clarify the issues concerning the bond said: “Proceeds from the bond issue are tied irrevocably by the execution of infrastructural and capital projects in various parts of the state.
“Topping the log is the pivotal dualisation the Ughelli – Asaba Expressway and dualisation of Effurun – Eku Road. Still on transportation and urban renewal, township roads will be built in Asaba, Warri, Agbor and Sapele while a bridge will be constructed at Agighorodo. Taxis, boats and high passenger capacity buses will also be acquired.”
The commissioner also in his statement clarified issues concerning the inflows from the federal allocation. The DPP had alleged that a monthly N17 billion was derivable from the federal allocation, an amount it claimed was more than that accruable to the Lagos State government.
Clarifying the position of the state administration on the issue, Ogeah said: “On getting our monthly allocation from the Federation Account, 50 percent of the derivation component is paid to the delta state oil producing areas development commission (DESOPADEC).
Following that, more than N7 billion is expended monthly to pay the wages and allowances of over 65, 000 workforce. And when the state’s intervention in primary education, pensions, gratuities, overheads and public debt charge are factored in, little is available for capital expenditure as planned in the budget.”
According to him the funding gap was what necessitated the issuance of the bond. Remarkably the commissioner explained in his statement that the bond proceeds are irrevocably tied to the projects.
As he said: “The entire proceeds from the bond are subject to any alteration of review during disbursement. Only the project listed and approved by the relevant regulatory authorities will benefit from the fund.”
In effect the disbursements would be automatic and tied to the projects as sanctioned by the capital market authorities. So, whether the State House of Assembly goes on indefinite holiday or not, the projects would be funded and executed!