In Abia State, we are whipsawed by abysmal infrastructural decay and alarming debts. Unless there is a breakaway from the status quo or total deracination, Abians will be living in never-never land to believe that they are approaching their land of Eldorado.
This is rightly so because T.A Orji’s led Abia State government apart from mismanaging Abia funds also left Abia in huge domestic and external debts of N25.13 billion and $33.79 million respectively as at December 31, 2014. These amounts later increased to N25.127 billion and $41.976 million in 2015.
However, the fall in oil price further increased the financial stress on Abia State. By May 2015, Abia State government was unable to pay civil servants salaries for approximately 11 months. According to numerous news reports, Abia State was one of the pioneer States that pushed for bailouts from the Federal Government.
To inject life into an economy in comatose as well as offset the civil servants salary arrears, The Federal Government granted Abia State N14.2 billion bailout. But Abia was quick to take advantage of the bailout package to renegotiate its liabilities, including taking a 20-year loan of N14.15 billion at a nine per cent lending rate from the Central Bank of Nigeria (CBN) ostensibly for the settlement of outstanding wage bills.
The consequence of this action is that, Abia’s financial Maradonnas are hoping that future residents of the State or our children will pay off today’s costs for running the government. In other words, Abia government is not only spending the future resources of our children but also heaping humongous debts for them to settle.
With this reality facing Abia State, it is obvious that the T.A Orji led Abia Government discarded prudence. This can be proven by reviewing the funds (accrued to and) received by Abia State from the Federal Allocation from January – July 2015 using several documents from yourbudgit, DMO and FAAC.
Authoritatively, Abia State monthly Revenue (January – July 2015) was N4.89 billion. The breakdown is as follows: FACC Allocation, N2.82 billion; Value Added Tax (VAT), N662.60 million; 13 % share of Derivation, N385.73 million; Internally Generated Revenue (IGR) N1.03 billion.
To make it simpler for everyone’s comprehension, every month from January to July 2015, Abia State received about N3.87 billion from the Consolidated Revenue Fund, popularly called FAAC Allocation. The State also generated N1.03 billion every month from IGR. When you add the IGR with the monthly remittance from the Federal Government, it will give you total average monthly revenue of N4.89 billion.
Surprisingly, while Abia State received N4.89 billion monthly, the government ran monthly commitment (Recurrence Expenditure) of N5.18 billion. This left Abia State in deficit of N290 million monthly. This is a clear indication of financial recklessness. To hide the true nature of Abia State finance however, the government resorted to borrowing, vide ut supra (as stated above).
However, to mislead and make us believe further that Abia State finance was healthy, T.A Orji led government released a budget of N102.38bn in the 2015 fiscal year. The budget had Recurrent Expenditure – including Personnel cost and Overheads – projected at N62.2bn in 2015 or say about N5.18bn monthly as against N4.89 billion Abia generated monthly. This made the budget a charade because it left Abia State with a deficit of N290 million every month.
Do not let anybody to tell you otherwise, every budget target is realizable only if substantial portion of the State’s cost as budgeted was funded fully from her IGR. But that was not the case in the Abia State 2015 budget and other past budgets. The expenditure was funded from bank loans at lending rates of about 20 per cent interest.
Yet T.A Orji led Abia State Government failed to comprehend these developments. Instead of seeking ways to improve the IGR; the government deflated it the more with the destruction of Umuahia markets. This Executive recklessness (the demolition of Isi-gate, Mgbuka and Timber markets) costs Abia State approximately N1.436 billion in IGR annually.
Abia State government could not broaden its horizons on revenue sources beyond selling income generating assets, collecting Personal income tax from voluntary payers and road tax. And more often than not, the revenue generated ended up in individuals bank accounts.
Like I mentioned earlier, Instead of diversifying revenue sources, T.A Orji’s government gave out Abia income generating assets. For example, Mgbuka former land was allotted to a wife of a former President for hotel construction under PPP. The former Isi-gate, Gariki and Timber, Ministry of Lands and Works were given to Trade-Mall Mortgage Company and Pro-M LTD respectively under same arrangement.
My worry is that except the Abia mall all other projects are yet to be completed six-years after they were given out. For approximately six-years Abia State government is yet to generate Kobo in form of IGR from them. However, from the look of things, these projects look more like white elephant projects.
One of my biggest worries which precipitated the ongoing exposure is the barefaced refusal of Abia State government to open the book despite this glaring financial mismanagement. They have blatantly refused to publish audited financial statements of the State without consideration for accountability which is one of the cardinal tenets of democracy. So if there were no skeletons in the cupboard, why then is it under lock and key?
If we desired a new Abia with cornucopia of democracy dividends, demand for accountability should henceforth be our oriflamme. As servants the onus lies on them to tell us how our money is being spent. Also do not forget that those seeking your votes with N10, 000 today are the architects of our predicament. The money they are enticing you with is our 20-years common wealth they embezzled. Collect it from them and vote wisely. After all, it is a debt our children will pay.
Join US next week for more thought provoking revelations. Abia Must be Free !
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