Akwa Ibom’s debt burden
There have been a great deal of controversy and secrecy around the quantum and composition of debts owed by Akwa Ibom State government to the banks and contractors, especially the portion incurred by the Akpabio administration.
The problem is exacerbated by the apparent cold war between the incumbent governor Udom Emmanuel and his predecessor, Senator Godswill Akpabio, over governance and political issues in the state.
Governor Emmanuel has persistently blamed his lacklustre performance in the last three years on the huge debt burden he inherited from his predecessor.
He’s trenchantly criticized Akpabio for investing the state’s resources on worthless projects like the Tropicana Entertainment Complex which had remained uncompleted after over N150 billion had been sunk into it.
Late last year, the governor complained publicly that his administration was compelled to pay Julius Berger N6 billion in a lump sum, in addition to an undertaking to make a monthly payment of a billion naira to the construction company to offset government’s obligation.
He stated that these debts are unpaid bills left behind by Akpabio. The details of this debt are still foggy.
Akwa Ibom people have never been told how much is due to Julius Berger and indeed other construction companies and for what projects were these bills incurred and the repayment terms Udom Emmanuel has entered into with the company.
But last week, 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’s statement was however silent on the details of debt profile due to contractors and other obligors.
The statement was a rebuttal to an article written by Barr. Edet Eyo Bassey in which he claimed that Akpabio’s total debt stock was N500 billion.
This controversy arises largely in part because Emmanuel has never briefed Akwa Ibom people in details on the debt profile of the state government.
Rather, he has consistently used these debts as the excuse for unimpressive records in the last three years, despite the fact that in 2016, the state government had restructured its total bank debts into a Federal Government’s long-term bond which resulted in a monthly repayment of N300 million, instead of a more suffocating N3 billion monthly repayment prior to the restructure.
The restructuring was part of the Buhari administration’s bailout package to the states.
The Emmanuel administration earns between N15 billion and N17 billion from FAAC every month.
With a monthly IGR of N4 billion and refunds from the Federal government, it has chalked up to N750 billion in the last three years.
Apart from Lagos, Akwa Ibom is the largest revenue earner in the country.
This volume of income stream is at par with what the Akpabio administration earned, and far higher than the volume recorded by the Victor Attah administration. Yet the governor has not, by any standard, measured up to the remarkable strides recorded by last his two predecessors.
This explains why our people are so frustrated and despondent at the pervasive poverty and decay in the state in the midst of so much wealth. Are youths have been driven into cultism and crime as unemployment climbs.
In a recent morning discussion programme on NTA, Dr. Obadiah Mailafia, a renowned economist and former CBN deputy governor, mentioned Akwa Ibom State as a typical example of a society with a paradox of riches.
Akwa Ibom has the second highest unemployment rate of 36.5 per cent in the country, according to the National Bureau of Statistics (NBS) and records one of the highest death rates in the federation.
The government has been so clumsy and uncreative in its attempts to curb unemployment.
Instead of investing in agriculture and agro-allied industries which are labour intensive, our governor prefers to chase cottage enterprises that have no backward and forward linkages, and so adds no value to the economy.
A small pencil making operation that imports its components from China to assemble in a disused warehouse cannot create jobs.
It’s a no brainer! Akwa Ibom State does not have an agricultural programme that is designed to produce food and raw materials.
The government has arrogantly, perhaps for political reasons, refused to participate in the Central Bank’s Anchor Borrowers Programme which has boosted rice and wheat production and created millions of jobs in some states in the last two years.
With so much income, it is a shame that public schools in Akwa Ibom State are largely dilapidated and in a state of decay.
Children sit on the floor to receive lessons, yet the governor talks glibly of providing free education and paying N600 million a year as WAEC fees.
Ramshackle school facilities, poorly-trained teachers and lack of school resources contribute largely to the poor performance of Akwa Ibom kids in WAEC examinations despite the much vaunted free education.
Emmanuel manages Akwa Ibom finances with utmost opacity and recklessness.
He has been severely excoriated for proposing to build another Governor’s Lodge in Lagos with N21 billion, a worship centre in Uyo for N10 billion and a 21-storey high rise with undisclosed amount.
In all, the governor will just blow away over N100 billion on fancy buildings that cannot create jobs, but would end up adding to the long list of white elephant projects dotting our landscape!
The pact between the government and Julius Berger (and indeed other contractors) on its debt profile and repayment terms undermines the very fundamental principles of good governance.
• Etim is a banker and journalist.