Rt. Hon. Tunji Egbetokun,
Speaker,
Ogun State House of Assembly,
Oke Mosan,
Abeokuta
Honourable Speaker,
PRECARIOUS CASH FLOW SITUATION IN OGUN STATE AND THE ATTENDANT DIRE CONSEQUENCES ON OUR PEOPLE
I have found it expedient to formally write to you and all the Honourable Members, this letter for posterity and in the interest of our people whom we were all elected to serve.
Since 2003 till June 2008, our great State, as a consequence of hard work and prudent financial management, became a reference point in infrastructural development and industrialization, and people generally believed that our State was positioned for the next millennium.
Our State became a toast of many industrialized countries that have made it the first destination of choice for location of industry. Our employment and empowerment programmes became second to none and a reference point nationwide, not to mention the giant strides in sports, education, tourism, agriculture, health care, gender empowerment, etc.
As part of our development agenda, and having fulfilled our short and medium term campaign promises, we launched into our long term initiatives which, include development of Abeokuta City Center, our power projects, water rehabilitation initiatives and a few other projects designed to reposition our youth and secure their future by supporting major developmental initiatives like Agro-Cargo Airport, Deep Sea Port, OKLNG projects and the Free Trade zones located in the various regions of our State.
Contrary to the impression being created deliberately, most of these funds are largely for provision of infrastructure and the welfare of our people displaced from the industrial zones. It was as a consequence of this that we, as it is the practice all over the world, sought cheaper funds from the financial market to support these initiatives.
To jump start some of these projects, we got support from some of our bankers, most times, utilizing Irrevocable Standing Payment Order (ISPO) which, enabled us to pay back certain sums on a monthly basis. As part of our planning, we had envisaged that, like many other states, even the ones that are richer than us, we would obtain support from the Bond Market. Hence since 2008, we started the paperwork and the preparation of our accounts for the scrutiny of the Market.
You will recall, Hon. Speaker, that even in the 2009 budget which, was duly passed in December 2008 by your esteemed House, we made request for N50billion Naira from the Bond Market. Our work and our proposal passed the crucible of the Nigerian Stock Exchange, which supported and still supports our ability to pay. We followed this through to the Security and Exchange Commission that equally endorsed our request for a Bond.
Regrettably, your esteemed House, comprising of people representing the various constituencies where the Bond would be utilized, has failed to endorse it.
I have patiently tried to evaluate and wait for the reason(s), the House, under your leadership, had for not approving the request for the Bond only to hear that you claimed that the House did not have information on the request for it.
The financial position of the State at any given time is available to your esteemed House and in the public domain. I recollect that we published the finances of our State in the Guardian of March 24th 2009, and allocation of funds to the twenty Local Governments in at least two National Newspapers i.e. Nigerian Tribune and Nigerian Compass of June 19th 2008. I am also aware that in the course of our budgeting process and in passing the 2009 Appropriation Bill, you were duly availed, in writing, of the financial position of the State. As a matter of fact, the 2009 Budget which was duly appropriated by your esteemed House was signed into law and it contained the sum of N25Billion Naira which, as was clearly indicated, would be accessed from the Bond Market.
However, on June 10, 2009, the House issued Resolution 167 barring the State from accessing the Bond Market and enjoined all Financial Institutions from assisting our State. This Resolution, which I have dubbed Resolution of Retrogression and a Fatwa is retarding the progress of our State and has done incalculable damage to its growth and development. The House, under your leadership, has remained the only one of such in the entire country to have, by this action, truncated the development of its own people.
Today, a neighboring State with an average monthly Federal Allocation of N6.4 billion, which include a share of income from Value Added Tax (VAT), and an average monthly income from Internal Generated Revenue (IGR) of N18 billion i.e. a total average of N24.4b per month, has accessed the market to the tune of N275 billion. Bayelsa State with a monthly Federal Allocation, averaging N4.5 billion, together with a share of another N4.5 billion from the 13% derivation fund to oil producing States (making a total average of N9b per month) went to the Capital Market for N50 billion. At the last count, about 20 States including Imo, Kaduna, Niger, Kwara, Abia, Ebonyi, Enugu, etc, are all in the Bond Market. It is also a well-known fact that even the Federal Government has accessed the bond option to the tune of N1.3 trillion.
To underscore the effects of the decision of the House, the Federal Ministry of Finance evaluated the financial implications of this decision on the development of the State. Specifically, the Finance Ministry duly informed you that as a consequence of our exposure to the Banks, at prevailing interest rates, the Banks are charging us in excess of N400Million monthly. This interest rate could have been reduced and the money made available for some pressing needs in the State.
The immediate consequences of your failure thus far to approve the Bond, are:
1. Difficulty in fulfilling the obligation of pension remittances.
2. Difficulty in paying the counterpart funds for SUBEB projects for our primary schools especially renovations, teachers training and teaching aids.
3. Difficulty in the payment of subventions to our Tertiary Institutions.
4. Difficulty in the prompt release of the running costs of the Ministries and related Agencies of government.
5. Difficulty in road rehabilitation and maintenance by OGROMA, etc.
6. Difficulty in accessing the Federal Mortgage Bank facility of Two Billion Naira(N2 Billion) as Estate Development Loan to the State Government for the construction of houses for the benefit of contributors to the National Housing Fund(NHF)
7. Difficulty in accessing the Guaranty Bank Plc (GTB Plc) offer of One Billion Naira (N1Billion) Loan under the Commercial Agricultural Credit Scheme of the Federal Government of Nigeria.
Besides all of these, are the impending increments in workers' welfare package, from which our doctors, teachers, university lecturers, etc, must be beneficiaries.
You will recall that in one of our meetings in 2009, as part of the disposition of the Executive branch of Government towards accountability and transparency, I asked you to kindly nominate some members of the House to be part of the monthly funds allocation so that it would be very clear to all, how the paltry sums available were shared. For reason(s) best known to you, you turned down our request.
The whole essence of this is to avail you of the dire consequences on the people of our State if you fail to do that which is required. I have no doubt in my mind that whatever has a beginning must have an end. It is important that posterity should judge us well.
I therefore call on you and the Honorable Members of the House to do the needful and let us put the overall interests of our people beyond partisan politics and selfish calculations, so that the overall interests of our people, who elected us to serve, would take precedence.
In closing, I leave you with the words of Sir John Robert Seeley: History is past politics and politics present history. Let us therefore make history by allowing good reason to prevail. You may also consider the words of John Stuart Mill that the worth of a state, in the long run, is the worth of the individuals composing it.
It is necessary for us to use this auspicious time to join hands to move our dear State forward by considering the future of our people beyond any individual political gains and sentiments. The whole world is watching us.
Accept my warmest regards.
Yours truly,
[Signed]
Otunba Gbenga Daniel
Governor, Ogun State
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