Debt burden threatens governance in Taraba
FROM all indications, the huge expectation of dividends of democracy by the people of Taraba State from the incoming government of former Minister of State for Niger Delta Affairs, Darius Ishaku may turn out to be a mirage considering the precarious financial position of the state.
Apart from being hugely indebted to so many sources, which has made the state to go cap in hand looking for survival doles, the system appears incapable of gaining financial strengths to meet the obligations of the state to the people.
Following the inability of the out-going governor, Danbaba Suntai who began his administration on a good note before the October 25, 2012 plane crash which forced him out of office, to meet up with the demands of the people, the expectations of the people from the governor-elect, have skyrocketed.
From available indices, it is obvious that the tenure of Ishaku would face a herculean task in meeting the yearnings of the people because a large chunk of revenue from the federation accounts and other sources would end up in settling the debts already incurred by the outgoing government.
Rather than fashioning out ways on how to build on the achievement of the present administration, the new government would no doubt dissipate a lot of energy in managing the state’s debt burden.
That the state government is presently looking for funds to foot the bills of Civil Servants is no longer news. What is news is that contractors handling various projects have since left the state due to the inability of government to effectively mobilize them to their various sites.
This has also brought business activities to a standstill, as the state is predominately a Civil Servants state where business only thrives when the public officers get their remunerations. The state-owned university is at the verge of collapse as the institution has embarked on an indefinite strike for the past months due to the paucity of funds to run it.
The financial crisis is so bad to the extent that the state government is unable to pay for advertisement placed in no fewer than four national dailies for both President Goodluck Jonathan and General T.Y Danjuma’s birthdays that took place on November and December 2014 respectively.
The Guardian gathered that debts such as bonds, overdrafts and loans are presently tied to the neck of the state government and there is a palpable fear that the burden may hampered the new government from fulfilling its election promises to the people.
It was also gathered that the debt profile of the state, which sources disclosed was incurred by the sacked Acting Governor, Alhaji Garba Umar, has risen to over N27 billion.
While the debt profile continued to increase like the HIV/AIDS prevalence rate in the state, the state Internal Revenue has continued to dwindle because not much attention is being given to the sector.
Confirming the bad financial situation of the state, Commissioner of Finance, Emmanuel Gowon, in a recent chart with newsmen, agreed that the “ present financial situation of the state is so bad that the state is finding it difficult to pay salaries.”
Describing Umar as the architect of the precarious financial situation of the state, the new administration held by the reinstated Deputy Governor, Sani Abubakar Danladi (now Acting Governor) according to him “inherited about N20 billion debt from the sacked Acting Governor.” A breakdown of the debt profile according to him, include N9.5 billion overdraft, N5.6 billion term loan and another N2.7 billion unpaid cheques to various ministries and contractors as well as other liabilities and claims that added up to about N20 billion.
He said to ensure that salaries are paid, the present administration had to negotiate with banks to convert the N7.5 billion debt of overdrafts into a term loan for a duration of 20 months.
This means that out of Taraba’s monthly statutory allocation of between N3.5 to N3.6 billion, the state pays close to N1 billion for the term loan.
The state is then left with N2 billion to pay the revolving loan, which it takes back to pay staff salaries of about N1.8 billion.
In an attempt to salvage the situation, it was learnt that government has to negotiate for a N30 billion bond. Gowon said it would take a long time for Taraba, a state which monthly Internally Generated Revenue (IGR) is only about N140 million, to come out of the its present situation unless it secures the bond.
He said if the state can access the facility, the first tranche of N20 billion could be used to offset the term loan and have a balance while the remaining loan would be paid in a period of seven years with N390 million monthly, without stifling the running of government and yet embarking on some capital projects.
The State Executive Council (SEC), according to him, has collectively agreed on the bond and had communicated the House of Assembly to seek their approval.
The Commissioner sought the understanding of Taraba people as he maintained that it was not their fault but a mess inherited from the sacked government, which he said would have crumbled the state to a level of not paying salaries for more than three months if they had not negotiated.
Though a committee to ascertain the alleged financial recklessness of Umar was constituted by Danladi, who on assuming office on November 21, 2014, made it known that he met an empty treasury, the people are however not convinced that the findings and recommendations of the committee would see the light of the day.
Not comfortable with the fraud that allegedly characterized the sacked administration, several persons who bared their minds to The Guardian, said that the only way out of the quagmire is to bring to book those indicted by the committee to serve as deterrent to others.
A top official of one of the banks that the state government is indebted to, said most of the funds coming in from the federation account are paid into its coffers.
He said, “I must confess to you that my heart is bleeding for the incoming governor.
This is because I don’t known where he is going to start. As we are talking now, our bank and other banks are bent on retrieving their money from the state government. So all the money presently coming in through our banks no longer get to the state government.”
Corroborating the Commissioner of finance, a top staff of the Board of Internal Revenue revealed how fund revenue generated by the Board went down the drain.
Like the Banker, he expressed sympathy for the incoming governor stating “ I wonder how he is going to cope with the huge debts he is going to inherit.”
While calling on the present government and anti-graft agencies to bring to book, all persons that have hands in the financial mess presently ridiculing the state, he said the incoming governor should the financial position of the state public on assumption of office.
A breakdown of the debt profile according to him, include N9.5 billion overdraft, N5.6 billion term loan and another N2.7 billion unpaid cheques to various ministries and contractors as well as other liabilities and claims that added up to about N20 billion. He said to ensure that salaries are paid, the present administration had to negotiate with banks to convert the N7.5 billion debt of overdrafts into a term loan for a duration of 20 months.