DELTA: Debt Hole In The Big Heart
IT is like a well-kept state secret. Nobody in government talks about it. Former Governor Emmanuel Uduaghan and his commissioners were very tightlipped about it. The state of the indebtedness of Delta is, no doubt, a no-go area. Not even incumbent Governor Ifeanyi Okowa, a former Secretary to the State Government under Uduaghan is ready to give out the real figures.
Okowa would rather beat around the bush since he was sworn in last May 29, bemoaning the general pathetic state of the state’s finance as a result of the huge debt profile. The people will still have to tarry a while because of the indebtedness, before there is prosperity for them all, which was his campaign mantra.
The governor dropped a hint about the huge debt profile on June 3 in Asaba at the swearing-in ceremony of the Secretary to the Delta State Government (SSG), Mr. Festus Ovie Agas, when he pleaded with the people to exercise patience, as his administration will need time to deal with the problem.
Again, at a meeting with top civil servants in the state capital of Asaba on June 5, Okowa was emphatic: “We are in a major debt overhang, a very difficult financial state, we should appreciate that and the onus is on all of us to find a way out, we will need to find a way to input on the lives Deltans.”
The meeting, the governor let it be known, was called to “discuss the debts overhang, brief the civil servants on the present state of things and rub mind on the way forward, both now and the years to come.”
Against the backdrop of the reluctance to reel out figures, one thing that is undeniable is that between 2010 and 2012, the state government, under Acting Governor Sam Obi and Uduaghan, took a bond of N100 billion from the capital market for the execution of some projects.
When the erstwhile Director General of the Security and Exchange Commission (SEC), Dr. Aruma Oteh, visited the state with her colleagues on November 28, 2012, she told Uduaghan that the utilisation of the N50 billion bond secured by the State government was “absolutely outstanding and transformational”.
According to her, the team was satisfied with the utilisation of the bond and that the Commission would readily release the balance N50 billion naira bond whenever the state government requested for it.
Sounding upbeat in his inaugural speech, Okowa declared: “Our promise of prosperity for all Deltans is not a catch phrase or campaign rhetoric. It is predicated on the fundamental premise that we will succeed that we will succeed as a government when our people succeed.”
He, however, acknowledged the challenges that confront the new administration as a result of the prevailing economic predicament, which he hinged on the turbulence in the global oil market resulting in dwindling oil prices with negative impact on the revenues of the state.
In sharp contrast to the lamentation by Okowa, the Economic Adviser to the former Delta State Governor, Mr. Afam Obiago, who was also evasive as regards the exact amount the government owes, when he spoke earlier in the year, attributed the prudent management of resources by the state government for the low debt profile of the state.
Obiago said that the listing of the state as one of the least indebted states in the country by the Debt Management Office (DMO) would be an advantage to the incoming government. He said that the low debt profile would also be a boost to both local and international investors.
He said: “It is a good thing that they DMO released the debt profile because, when we are talking about prudent management of resources, people do not seem to understand the figure has now proved us right.”
Obiago said that because the state has under borrowed, it should be an attractive partner to potential partners both local and international, as it showed that the state has resources at its disposal not hindered by borrowing.
He conceded that governments like all businesses do borrow, but advised that they should not borrow more than 50 percent of their Gross Domestic Products.
What is incontrovertible, however, is that N1,388,551,393 was deducted from the state’s April allocation from the Federation Account, which was paid in May by former President Goodluck Jonathan’s administration shortly before leaving office on May 29.
A break down of the figure showed that N1,098,907, 642 billion was for contractual obligation while and N267, 534, 389 million was for other deductions and N22, 109, 362 million was the figure for external debt.
A total sum of N9, 412, 319, 826 billion was the total gross amount, while N8, 023, 768, 432 billion was the figure for the total net amount for the month of April. Now workers of the state branch of the National Union of Local Government Employees (NULGE) have been on strike since May 11 over the backlog of salaries being owed its members by government.
Normal activities at the 25 council secretariats across the state have been grounded ever since, as the aggrieved workers, who had last week issued a week ultimatum to the state government to pay, commenced the indefinite strike action to protest the non-payment of their salaries in the past five months.
State workers are however better, as the government has managed to carry out the payment of their salaries. While civil servants in the ministries are paid, their counterparts in the parastatals are being owed two months.
Down from when it used to receive as much as N15 billion monthly from the Federation Account at a time the price of oil peaked at over a $100 per barrel, there is no doubt that hard times are truly here.