‘Bailout for states wrong signal for fiscal governance’

• APC faults Fayose on palliatives
• Group cautions Ajimobi over rescue funds

A groundswell of criticisms is trailing the recent bailout package approved by the Federal Government for itself and the states as the action has been described as the exoneration of governors from the guilt of fiscal indiscipline.

Meanwhile, the Ekiti State chapter of the All Progressives Congress(APC) has criticised Governor Ayodele Fayose over his recent comment on the bailout fund , saying it is ingratitude taken too far.

Fayose had said that the fund out of which Ekiti State benefited in billions of naira, was not a bailout but an amount due to the State from the Federation Account.

Also,a non-governmental organization, Change Agent Movement yesterday called on workers’ unions in Oyo State and anti corruption agencies to monitor the bail out fund accrued to the state so that it would be judiciously used for its purpose.

Two civil society groups- Centre for Social Justice (CSJ) and Citizens Wealth Platform, faulted the decision, adding that the bailout was also a setback to the promised diversification agenda by the current administration, as huge sum of profit, savings and loans are being put forward at a go, to fund mismanagement of public trust.

The Lead Director, Centre for Social Justice (CSJ), Eze Onyekpere, who decried the bailout, said that on the surface, the policy might appear to be a welcomed one, but a proper analysis of its legal and policy implications sends wrong signals for the improvement of fiscal governance particularly at the state level.

President Muhammadu Buhari had approved that the three tiers of government share $2.1 billion proceeds of investments in the Bonny Liquefied Natural Gas Project; $1.6 billion from the Excess Crude Account (ECA).

He also ordered the Central Bank of Nigeria (CBN) to provide a loan package of between N250 billion to N300 billion for states to pay arrears of workers’ salaries, while the Debt Management Office (DMO) is to facilitate the restructuring of the commercial loans put at N660 billion and extend the life span of the loans to reduce states’ debt service obligations.  He lamented that in the discussions between the President and the governors, which preceded the bailout package, there was no mention or acknowledgement of the contributions of governors to the inability of states to pay workers and the parlous state of their finances.

“They heaped the blame on the out-gone Federal Government. However, the truth remains that the poor state of finances at the state level is a product of the fiscal irresponsibility of governors who mismanaged their state finances.

“It will be unconscionable for CBN to give public funds to be managed by a governor who has appointed tens special advisers and assistants; still maintaining a long convoy of cars for his entourage and/or maintaining an aircraft at state expense; or drawing hundreds of millions monthly on unaccounted security votes.

“It will also be a fiscal crime to allow states to have access to this bailout fund – where budgets are not public documents; accounts have not been audited for the past couple of years and there have been no follow-ups on audit queries and findings; no biometric verification of the workforce to remove ghost workers; or states that pay 20 per cent of their Internally Generated Revenue (IGR) to the private companies engaged in IGR collection; states with commercial bank loans and bonds that cannot be justified by capital projects in the state, among others.”

The group in a statement by its Chairman and Secretary, Messrs Abolaji Adeosun and Malik Adehun respectively said that Governor Abiola Ajimobi should not be allowed to use the funds for other or personal use except the workers salaries it is meant for.
They noted that the governor’s alleged penchant for mismanagement of funds should be checked so that the state would not be plundered into further financial crises, adding, “Oyo State would not have been in this mess if not for the over bloated contracts awarded by the Ajimobi administration.