By Hassan A. Saliu
Introduction
Of recent, the Kwara State government has been in the news most times for good reasons that are connected with democracy in action. Several issues have come up in which the State is intricably tied. One of such was the issue of the Senate Presidency in which the former governor of the State, Dr. Bukola Saraki, was involved.
Another was the issue of minimum wage on which some governors have threatened to reduce. On the part of the State, however, Governor Abdulfatah Ahmed has assured the workers that nothing of such would take place in the State. Most significantly, the issue of warehousing all parastatals of the State under the State conglomerate business outfit – Harmony Holdings, ostensibly for more accountability and cost-saving measures has been a subject of intense controversy with the State government having to take out advertorials in the papers to educate the public on the issue and by so doing, presenting its own perspective of the issues involved.
This paper is, however, concerned with the issue of N20 billion bond that the State government has been allowed by the House of Assembly to access to fill the huge infrastructural gap in the State which is put at N255 billion. So much concern and interest has been generated on the issue by some stakeholders including some opposition elements in the form of position papers. On its part, the State government has been pushing out information on its decision to borrow N20 billion from the capital market. The media and the public space generally have been seized on the matter to the extent that some confusion does exist due to the lot of sentiments that have been injected into an otherwise simple financial transaction.
My motivation for writing this paper is a response to the calls by observers that we professionals, especially teachers of politics, should not always keep quiet on issues of public importance. We should see our interventions as the continuation of our public intellectualism which the Nigerian nation does need at this time of our history. Let me however correct the notion that this author has been too quiet on so many issues of public interest.
Any regular listener or reader of the dailies would recall my interventions that have created some discomfort due to their punchy perspectives and pointedness. As a Kwaran, I have never kept quiet in giving kudos to the State government and the opposition on some occasions and knocks on some other occasions, while pointing at the political correctness and approaches to enhance the content of governance in the state.
I have done these though not as a practicing politician rather as a public intellectual. I hope to continue to do so as long as there is a need for my intervention.
I have elected to participate in the debate on the bond issue because I have identified some gaps in the arguments of the State government and those who are opposed to it. I will present the strands in the positions of the two before I try to narrow the gap in their positions.
I will thereafter raise some wider issues for the government, opposition and the general public to ponder over on the issue of rapid development for our dear State. I begin with a review of the position of the state government.
Government’s position
I rely on the media reports, reports of the proceedings of the House of Assembly, media chats of Governor Abdulfatah Ahmed and his aides on the issue of N20bn bond and most significantly, the advertorial in The Nation newspapers by Dr. Muyideen Femi Akorede on 29th December, 2015 to distil the following arguments for the State government:
It has been argued by all sources on the issue of bond that given the reality of about 50 per cent drop in Federal allocation to the State, the government has no choice than to resort to borrowing to make up the shortfall and drive the development process in the State. This argument is a valid one that even the opposition elements have acknowledged.
Where there is divergence is how to go about bridging the shortfall in the allocation. For the State government, the correct part is to approach the capital market for its strategic intervention. Based on the good record of the State in loan repayment, the best partner to approach is the capital market.
After all, the bond of N17 billion taken by the Bukola Saraki government in 2009 had been liquidated, leading to the state’s good record with the Central Bank of Nigeria and some financial rating agencies. There are projects on the ground to show that the borrowed money had been judiciously utilized.
This time around, especially with the downward trend in federal allocation, there is a more compelling need to borrow money to make more impact on the development climate of the State.
It is also implied in the position of the government that there is really nothing wrong with the idea of borrowing to meet some emergencies or unforeseen financial demands.The trend all over the world is for governments to borrow either in the short run or on a long term basis. The highlight of the proposed 2016 Federal budget is the hefty amount that the Buhari government wants to borrow.
What then is wrong with the Kwara State government borrowing N20 billion out of the N56 billion required to meet the financial requirements of capital projects in its 2016 State budget?
According to the State government, it has commissioned a study on the level of infrastructural development in the State. The study has revealed that the State would require the sum of N255 billion to fix the infrastructural gap in the State. In our own clime, physical infrastructural development complements the now famous stomach-infrastructure to show the performance level of a government.
Any unfavourable score on these two elementary yardsticks for measuring performance in our country would easily return a negative verdict to a government.
The current State government is aware of this expectation and it therefore, wants to certainly add to its list of achievements by embarking on the sinking of 938 bore holes, construction of two new campuses of the State University at Osi and Ilesha Baruba, dualise the Zango-UITH road and Olunlade-Ganmo road, upgrading of Oro General Hospital, among other high priority projects to the government. The crave for enduring legacies by the Abdulfatah Ahmed administration cannot be excused in the desire to borrow theN20 billion bond from the capital market.
From the programmes outlined by the government, including the repayment proposals, future governments of the State would not be encumbered as the bond will be paid back in the year 2023, four years after the expiration of the tenure of the current State government. In the interval, the government is paying attention to the internally-generated revenue with the revenue growth rate of N500 million per month as a way of cushioning the biting effects of the loan/bond.
Aware of the resentment of the people to the bond, Governor Ahmed, has promised that the money will not be diverted to other uses; every bit of it will be used for the purpose intended. The government, after dropping the idea of a public hearing on the matter, convened a meeting of “5000 strong stakeholders” at the Banquet Hall, opposite the Government House, Ilorin on the 19th of December, 2015, to get people’s input.
And from the report, those in attendance overwhelmingly endorsed the idea of borrowing from the capital market. The House of Assembly has subsequently given the nod to the Governor to go ahead with the loan. It must be remarked that the Assembly on two previous occasions, had turned down the request of the State government on the issue of bond for lack of sufficient information on what the loan was meant for. The final approval thus means that the cracks in the relationship between the executive and the legislative have been resolved as both arms are now united as far as the issue of bond is concerned.
The opposition’s perspective
Three sources represent the views of the opposition in this paper. These are the position paper written by Akogun Oyedepo and Barrister Abdulwaheed Yusuf that appeared in the Sahara Reporters of 23 December, 2015, the widely circulated paper written by Moddibo Kawu on Kwara bond, which first appeared in the Vanguard of 24th December, 2015, and later in several other newspapers.
The last was the excerpts of the stand of the Labour Party in the state in the bond window as contained in THISDAY newspapers published on 30th December. 2015.
From the sources, there is ample evidence to suggest that the opposition is opposed to the idea of borrowing money once again from the capital market. The first issue they have raised is the confusion and the lack of transparency in lumping together a lot of projects that cannot be executed with the anticipated borrowed money.
It is clear that a more painstaking effort at assigning costs to the envisaged projects would have helped the opposition in reacting more concretely to the projects and their cost implications. In their conclusion, therefore, there will be recourse to more borrowing if all the earmarked projects are to be executed. This, in their view, will add more pressure on the resources of the State and thus worsens its debt profile. For these reasons, they are not in support of the loan.
