SUKKUK loan: Tension, controversy in Niger

Recently, Senator David Umaru, representing Niger East, spoke on the implications of the controversial N21.5 billion SUKKUK loan bond sought by Governor Abubakar Sani Bello of Niger state, describing it as “collateral damages”. AIDELOJE OJO writes on the controversy trailing his position.
On particulars of international bonds including N21.5b Sukkuk loan The administration of Governor Abubakar Sani Bello of Niger state few weeks ago announced the desire to secure N21.5b Sukkuk loan for infrastructural development.
The state commissioner of Finance,Alhaji Mohammed Zakari in a press briefi ng said that about four projects would be captured and executed under the bond. He listed them to include development of Suleja Trailer Park, rehabilitation of Minna township roads, Kontagora water works, Kontagora general hospital reconstruction, construction of School of Nursing Sciences in Kontagora, construction of modern market in Mariga and establishment of Mining City Development Centres. Apart from the N21.5 billion Sukkuk loan, the commissioner said the administration was also ready to secure other loans from the Islamic Development Bank amounting to $266m and another $330m from Kuwait Fund for Arab Development.
According to Zakare, while the IDB loan is meant for the construction of Minna – Bida road, the Kuwait fund loan is meant to finance the establishment of Medical college at the state owned university, Ibrahim Badamasi Babangida University Lapai (IBBUL). The Sukkuk loan, according to the government would attract 17 percent interest and repayable over seven years. The commissioner argued that projects under the loan were lined up across all the three senatorial zones of the state The cry for and against choice and relevance of the bonds Government’s intension to have the loans has no doubt generated lots of tension in the state with divergent views on the necessity and viability of such huge debts.
While pro-government activists are busy in a ways to sway public emotions in support of the laons, however not a few public and opinion leaders have come out in bold terms to speak against the need of the loans. One of such voices is that of Senator David Umaru which he unequivocally expressed at the media parley.
He said, “It is obvious that the administration is badly obsessed with accessing bond loans facilities in the pretence of infrastructural development while it has consistently failed to account for the billions of naira accrued from statutory allocations to the state including other huge financial interventions from the federal government.
The administration should however be aware that the well informed people of the state including my humble self cannot be deceived by needless lies being canvassed as benefits derivable from the huge burden-laden bonds meant to impoverish the state”. In continuation of his vehement opposition to securing the loan, Senator Umaru said, “I will therefore join all the good people of Niger state to say with loud voicestop this loan(s) don’t mortgage Niger state”. Preview of bonds loans and general debt profi le of Niger state
The history of bond loans in Niger state in the democratic dispensation appeared to have begun with the immediate past administration of former governor Muazu Babangida Aliyu of the Peoples Democratic Party (PDP) within 2007 and 2015. Our correspondent gathered that the administration of former governor Abdulkadir Kure, (of blessed memories) from 1999 to 2007 did not put hands into huge debts in the name of bonds. Records show that although Kure administration contended with strong financial challenges before it handed over in 2004 but that such challenges were always solved through taking of bank overdrafts.
It was however learnt towards the last four years of former governor Aliyu, his administration took a plunge into the deep sea of bonds from the capital market and netted over N27 billion bonds in trenches of N6b, N9b and N12b. Checks also revealed that the Chief Servant’s administration, as that administration was popularly, left a total of over N44 billion as external debts and close to N30 billion internal debts.
Our correspondent gathered that over N8.2 billion is still hanging on this administration as repayment debt incurred from capital market by past administration. It was also learnt that while repayment period of the bond was extended to 2021 by this administration, it has become more worrisome to majority of Nigerlites that the same administration is bent on taken a deeper dive into suffocating debt waters at the expense of the people. External debts Analysts are however of the view that cursory profi le of the performance of present administration of Governor Sani Bello has shown red light with growing internal and external debts and that plunging the state into outrageous debts would be catastrophic and devastating to the people who have to bear the burden of repayment. This is more so when official sources has put Niger state external debts as at 2017 when the administration was barely two years in office, at N17.33 billion while internal debts stood at N31.98 billion.
It is also said that over N114 billion accrued to the administration between 2015 and 2017 as net FAAC allocation while about N250 billion was accessed as bailout funds and other special intervention funds from the federal government including the Paris Club refunds. ‘Hue and cry’ over lopsided distribution of projects across the state under Sukkuk bond Major issues the government has to contend with in its desire to access the Sukkuk bond include the timing of the loan and the perception of people that the distribution of the benefits of the loan has been skewed in favour of Governor Sani Bello’s zone C against other zones particularly Niger South Senatorial District also known as zone A.
It was gathered that few days ago, substantial number of youths from Niger South Senatorial District staged a protest against the lopsided distribution of the benefits of the bond which isolated the zone.
But the youths are not alone in this agitation for equitable distribution of benefits/projects across the state. Umaru joined forces Senator David Umaru has also joined forces with the people who are of strong view that the quest for the loan was disastrous and catastrophic especially as many people that would bear the brunt of the loan were sidelined in the distribution of benefits from the loan in terms of projects distribution. The lawmaker insisted that since the people would bear the burden of the debt, it is only expedient for the government to have evenly distributed benefits across the three zones of the state.
He said, “it is however important to say without mincing words that the lopsided distribution of the projects in favour of the governor’s zone is highly regrettable and totally unacceptable. It beats my imagination that the governor who got votes from the three senatorial zones in 2015 to assume office could turn round to deny entire zone A the benefits of such huge bond which repayment burden the people of the zone will carry for years. The excuse that a mining centre worth N2.9b will be established in Katcha area of the zone is a ruse and not tenable compared with projects that got concentrated in zone C”.
The lawmaker said he became more suspicious of the sinister intention of the administration when Minna township roads that had been severally captured in previous bonds resurfaced again in the Sukkuk bond as if Minna was the only city in Niger East Senatorial District also known as zone B. the lawmaker asked rhetorical questions on why government was recycling same Minna township roads project?
is the Suleja trailer park the greatest need of the people of the area? Yet he demanded answers from government on the questions insisting that zone B has 9 local governments and if it was right for others to merely bear the burden of repayment of loans they do not benefit from? Niger Assembly handles Sukkuk bond issue, legislators’ second term bid on the scale The Speaker of the Niger state House of Assembly, Honourable Ahmed Marafa Guni, few days ago read a letter from Mr. Governor seeking for approval for the state to secure the N21.5b Sukkuk loan at plenary. Apparently sensing the mood of the members over the request, the Speaker cleverly referred the request to a committee of the House urging the members to thoroughly investigate and establish the viability of the loan.
Blueprint learnt that the lawmakers have since begun drilling of concerned government officials on the viability of the loan. The commissioners of finance, investment and budget and planning have appeared at the Assembly where they tried very hard to convince the legislators on the benefits of the bond.
They argued that the Internally Generated Revenue of the state will improve while development would be enhanced. Analysts however believed that the lawmakers really needed to consult their respective constituency to decide the fate of the bond.
A source at the Assembly told Blueprint that the lawmakers are being careful not to incur the wrath of their constituents most of who are already diabolically opposed to government intention to add more pains to their sufferings through the huge loans. It was learnt that the legislators are on pressure from the constituents to throw the governor’s request into the dust bin.
At the same time, the governor and his aides are said to have intensified lobbying for the approval request to scale the legislative process. It was learnt that even if the governor gets the nod of the state Assembly to access the bond, he will still require the approval of the National Assembly as it relates to foreign loan.
However, investigations have revealed that most of the state lawmakers are trending softly over the governors’ request because of the need for them to go into the oncoming 2019 electioneering campaign with clean hands and avoid impediments to their second term bid.
Not a few people including Senator Umaru have however called on the Assembly to stop the loan and prevent the mortgaging of the state into poverty. The lawmaker was emphatic in warning the state legislators that the loan is disastrous, adding that “I want to call on the members of the Assembly to withhold approval on this loan request to save the state from further impoverishment and bankruptcy”. Need to consider the concerns before taking the loan However, while government is expected to weigh options regarding the benefits or otherwise of the SUKKUK loan, it would be appropriate for it to look into the concerns raised by perceived foe and friends before going for the loan.