The Senate Ad hoc Committee on Local and Foreign Debt led by Senator Kabiru Gaya yesterday turned in the report of Governor Adams Oshiomole’s N14.7 billion request with a bright chance for its approval. The other members of the Committee include: Senator Bukka Abba, Senator David Umoru, Senator Durofashe, Senator Emmanuel Paulker, Senator Samuel Anyanwu and Senator Ibrahim Abdullahi.
Ptresident Muhammadu Buhari had requested the Senate to grant approval to the Edo State Government to obtain a loan of $75 million from the World Bank. In a letter to the Senate President, Senator Abubakar Bukola Saraki, which was read on the floor of the Upper Chamber on August 4, 2015, Buhari reminded the lawmakers that the World Bank had approved a development policy programme for the total sum of $225 million (N44.1 billion) to Edo State government in 2012, to be implemented in three tranches of $75 million per annum.
He told the senators that the National Assembly in the 2012-2014 Federal Government external rolling borrowing plan approved the first tranche of the loan. Buhari also informed the legislators that the Edo State government had successfully implemented the Development Policy Operation (DPO) since 2014. He further explained that, following this success, the World Bank’s Board of executive directors approved the second tranche noting that on April 29 2015, the DPO was also captured in the federal government’s external borrowing plan of 2014-2017, which is pending with the National Assembly. Buhari stated that the request for approval of the second tranche of the credit facility became necessary to enable the state consolidate on the gains of the first tranche.
The Edo State government request has been a subject of controversy both within and outside the state. A few days ago after the loan request was made public, the state Peoples Democratic Party, PDP immediately raised their suspicion on the morality and economics of the loan. For a governor whose tenure ends next year, the party challenged the governor to give account of what he had done with previous loans to warrant the new request.
They therefore urged the Senate and the House of Representatives to reject in its entirety, the proposed $75 million credit loan which amounts to N14.7 billion from the World Bank for Edo State They claimed that if the National Assembly grants the loan, it would further deepen the poverty in the state Speaking with Journalists in Abuja, Chairman, PDP, Edo State, Chief Dan Orbih faulted the request in the grounds that as one of the indebted states in the country, it was a big gambit to seek the loan. In tow with Orbih were two Senators from Edo State who disagreed sharply on the proposed loan. One was Senator Francis Alimikhena, APC, Edo North, while the other was Matthew Uroghide.
Towing party line on the loan issue, both spoke in support of their party. Alimikhena described the loan as very important and timely in view of what he referred to as fact that the previous ones have been useful and effectively executed to carrying out World Bank projects in the state and thereby earning the confidence of the world body to extend further support through the recent loan.
In his own reaction Senator Matthew Uroghide disagreed with his colleague and supported the call by the PDP Edo State for verification of the previous tranche to ascertain if the loan was used properly and for what it was given it for, adding that Edo State cannot afford to go for such a loan now when it was presently groaning as it cannot pay salaries.
Another Senator from the state who disagreed with the state government’s claim for the request is Senator Clifford Ordia, PDP, Edo Central. Without mincing words, he stated that taking the loan was the shortest road to continued financial recklessness by the Oshiomhole government. The loan, if approved would raise the state’s debt profile under the current administration to N44.1 billion ($225m) in World Bank, according to Ordia. But Commissioner for Information, Mr Louise Odion took umbrage and berated the PDP chieftains for their position he considered uninformed and ignorant.
He said: “I don’t think there is any controversy other than the act of mischief by the Edo State PDP chairman (Chief Dan Orbih) when he took liberty to address a press conference in Abuja to dabble into matters in which he has little knowledge. “The truth of the matter is that Edo State had entered into some understanding with the World Bank about four years ago.
We applied for support, which is legitimate. “They sent their officials to the state to come and verify if the claims we made were genuine. Their officials came here and conducted their own independent investigation and they found that here is a state government that is exemplary unlike its predecessor.
“Here is a state governor who is ready to work. In their judgment they decided to approve $225million facility in terms of support to the state government. “It should interest you that it was only Edo and Lagos States they gave that to. That is during the administration of Governor Babatunde Fashola. By their own assessment they believed that the two governors are serious and could be trusted.
So, they decided to advance that facility but the arrangement is that you don’t collect the money at a go.” Speaking further, Orbih who called on the national assembly to first verify what happened to the first tranche, said, “I want to call on the leadership of the Nigerian Senate to kindly reject the request for Mr. President to grant this money to the Edo state government.
The issues that comes to mind at the mention of this loan are; what is the governor going to use this loan for? How has he utilized previous loans obtained by his government because you must look at what he has done with the previous facilities he has taken before considering offering him any new financial lifeline.
“Don’t forget not too long ago, he went to the capital market to obtain 35 billion loan for the Benin water storm project as we speak the only thing after paying out billions of naira in respect of that project all that is visible today in Benin city is the pool of stagnant water littered all over Benin city and the attendant emergence of what people now refer to as Oshiomhole mosquitoes, very stubborn and deadly mosquitoes that is what that project has brought to the city.
“There is nothing to show that the 35 billion which he took for the capital market for that particular project has been utilized. So what is he talking about 75 million dollaloan? In fact what the governor is asking the Senate to grant him permission to access is not up to what he collects as security votes for undisclosed security challenges, it is on record, the vouchers and related documents showing that Oshiomhole takes up to an average of 500 – 700 million every month for what he refers to as urgent security challenges, what these challenges are never disclosed and from the records available to us from the police headquarters Edo state since he came into power has never witnessed any major, urgent security challenges that will warrant the expenditure of 20 million in a month talk less of 500 – 700 million in a month.
“So we see this request by Oshiomhole presented to the Senate by the president as a request to further impoverish the good people of Edo state, to further drive the state into a bottomless pit of ineptness occasioned by his mismanagement and misappropriation of his government.We call on the leadership of the Senate to reject this request and it is time for all hands to be on deck to check the declining economic fortunes of this country. This is not time for needless borrowing by government and government institutions. So, I think what Edo people expect from the senate leadership is to reject this request.
“More so, it is coming from the means of a previous rejection by a minister, we are aware that the former minister of finance, that great lady of distinction had earlier reviewed this request, an informed position of a renounced economist. She analysed this request and rejected and declined to approve this request. Going through the back door now by way of request to the Senate is Oshiomhole’s antics of wanting to play smart, the world is now aware why Oshiomhole has be launching an attack on that woman of distinct, I think she can now laugh loud now that the actual reason for the recent uncontrolled attacks by Oshiomhole on her person is arising for this request which Oshiomhole made earlier which she turned down.
“That request was made when elections were approaching it was the last presidential, national assembly and state assembly election were approaching and it was turned down by Okonjo Iweala. Now that Edo people are gearing up for the governorship election in early 2016, he has presented it again, to me it is clear signal that Edo state is broke and I think rather than resorting to this financial palliatives that the new government to state government, the government should come out boldly to challenge some of these state governments, ask questions what they have done with the previous money granted them, allocations, excess crude account, IGR, they have various ways this government has generated money to say the list.
“Today I make bold to state that Edo state has borrowed so much in the past that for over 5 years now the people got into agreement that a particular sum should be deducted as funds anytime the state is receiving its allocation. It is sad to state here that for over 5 years, the sum of 520 million is being withdrawn as source as part of the mandatory obligation to institutions the state government has borrowed money from. When it became clear that the government on its own wasn’t prepared to service these debts the issue was brought to the attention of the former minister and a meeting was arranged where the state government agree that they withdraw 520 million to service previous loan.
“So if this loan is granted I am sure the state maybe giving up to 800 million on monthly basis to service all these numerous loans they have taken and it is really sad that there is nothing on ground in Edo state today to justify the huge debt profile of Edo state which is put at approximately 250 billion. ” These are figures that have continued to emerge from various quarters and the government hasn’t been bold enough to come out with the actual figure of our debt profile, but no one can take away the fact that the debt profile of Edo state is huge and unbearable because for over 5 years if they can be paying 520 million every month from source and from the information available to us that money will continue being deducted well after Oshiomhole has left office, it means we already have a very huge debt profile and I challenge the government to come out with all relevant document about the actual status of Edo state profile.”
-Teddy Nwanunobi in Abuja writes on the probable end to the controversy surrounding Edo State government request through the Federal Government to the Senate for the approval of its request to consummate its outstanding loan request with the World Bank