As the dust over the recent fuel subsidy removal bloody protest in Kwara State was settling, the approval granted the executive by the State House of Assembly to obtain a loan of N10 billion from the Guaranty Trust Bank has stirred another controversy in the state
The State House of Assembly had last week granted the approval based on a letter of request written to it by the state governor, Alhaji AbdulFatah Ahmad.
Explaining the motive behind the bank loan, Ahmad, said it is an established practice in development planning to borrow funds for development projects which can then be serviced with recurrent funding such as Internally Generated Revenue -IGR.
“Hence, the decision of the previous administration to raise funds from the bond market through a rigorous process after which the Securities and Exchange Commission (SEC) gave approval. Having implemented the first phase of those projects which did not necessarily take them to completion, what we have done in the spirit of continuity was to raise funds for the second stage of the projects and initiate new ones.
“So we sought for funds from the money market in place of the second tranche of the original N30 billion since both have similar cost implications and tenor”, he said.
The governor drew the attention of the populace to the 2009 approval given the state government to raise N17 billion for capital projects from the bond market.
He listed the projects on which the N10 billion loan would be utilised to include the Kwara International Vocational Centre, the Kwara Holding Company Limited, Kwara State University, Local Government Road Projects, Cargo Terminal Apron Project, Renovation of five General Hospitals, and Ilorin Metropolis Water Reticulation.
Of these, four were initiated by Ahmed while the remainding ones?? were carry overs from Dr. Bukola Saraki’s administration.
But as novel as governor Ahmed’s plans to develop the state appears to be, the opposition party in the state have picked holes in the entire arrangements.
The Action Congress of Nigeria (ACN) in the state fired the first salvo by describing the government’s plan to borrow money from the bank on the pretext that it wanted to use the fund to finance developmental projects as dubious.
The party in a statement issued by its chairman, Mr. Kayode Olawepo, said that, “the hurried manner with which the PDP-dominated House of Assembly rushed to approve the request, without any thorough debate or committee works, raises many questions”.
“In the first three months of Ahmed’s illegitimate government, between April and June, Kwara alone got more than N61 billion as federal allocations. Triple that amount has accrued to the state since then; yet, the dearth of infrastructuree, for which Kwara is notorious, remains just as bad. We cannot pin those huge funds down to any appreciable capital projects executed by this administration”, the ACN stated.
It added, “the new N10 billion loan from GTB has already been included in the 2012 budget even before seeking the prior approval of the House of Assembly; so the House was railroaded into approving it.
“The people of Kwara cannot be subsiding irresponsible and unaccounted borrowings for which commensurate benefits have not been received by the people. Whilst the act of the borrowing is always known, the spending of the money borrowed has always been shrouded in secrecy. It is on this basis that we reject outright the request and House approval for another N10 billion loan for phoney projects”.
In its own reaction, the state chapter of Aliance for Democracy (AD) said the government’s move was premature, coming on the heels of a recent allocation of huge sums to the states of the federation.
The AD in a statement jointly signed by its state chairman and secretary, Buliaminu Aliu and Michael Ologunde respectively said, “there was no need for the loan and if indeed there was a need, the government must indicate a practical breakdown of how it would be expended in order to secure public support for the move”.
It added, “the news that governor Ahmed wants to borrow N10 billion on behalf of Kwarans came to us as a rude shock. The governor’s step to borrow such a huge amount of money was premature because the federal government had recently announced the release of N559.1 billion as December 2011 monthly allocation to both states and local government areas in Nigeria.
“Certainly over N10 billion will be Kwara state’s after sharing. We also learnt that Kwara state government got about N9 billion for November 2011 allocation which means that Kwara state government is richer by N20 billion or so within two months.
Then why should our governor want to borrow N10 billion?”
But the Senior Special Assistant on Media (SSA) to Governor Ahmad, Dr. Muideen Akorede stoutly defended his boss on the desirability of the N10 billion loan.
Akorede in an interview with LEADERSHIP SUNDAY noted that governor Ahmed has not only continued and completed projects initiated by his predecessor, Dr. Bukola Saraki but has used Saraki’s successes as the foundation for his own policy direction.
He said, “for example, governor Ahmed has made agriculture, Education and Human Capital Development as well as infrastructural development, key aspects of his policies. Beyond this, he has shown the determination to complete some of the high profile policies initiated by his predecessor.
“Governor Ahmad never misses a chance to espouse the mantra of continuity in governance, a platform on which he won last April’s governorship election in the
state.? For him, as stated in several speeches since, the bane of development is often lack of continuity, a trend he seems determined to halt, at least in Kwara State, he said.
According to Akorede a practical demonstration of the continuity strategy came in September 2011 when Saraki commissioned road projects which he started but were completed by Ahmed during the latter’s first 100 days in office.
He noted that, “perhaps the strongest indication of this concept came last week when the state government sought and received the State House of Assembly’s approval to borrow N10 billion from a commercial bank to complete on-going projects and initiate new ones.
“On close examination, the projects for which new funds have been obtained reflect Ahmed’s grasp of the fact that governance is a continuum but also his administration’s emphasis on high impact development projects.
“For example, the proposed Internal Vocational Centre, Ajasse Ipo for which the government plans to spend N1.4 billion connects with the governor’s declared objective of empowering youths as well as making education more relevant to market and economic needs of the state”.
The SSA opined that when completed, the centre will provide internationally recognised qualifications such as City and Guild’s based on a curriculum designed in consultation with the Nigerian Employers Consultative Association (NECA), adding that, “this collaboration is designed to ensure that graduates would be rapidly absorbed into employment on graduation or create businesses for which there is an existing need.
Further, the targeted beneficiaries of the centre are senior secondary school leavers and possibly polytechnic college graduates who would be turned into well-trained technicians and artisans”.
He added, “still in the area of education, the fresh funds are also tailored towards enhancing the infrastructure at the Kwara State University such as its Faculty of Engineering which is in collaboration with the Massachusetts Institute of Technology, one of America’s most prestigious academic institutions. Within its short existence, the university has showed great potential for growth with its modern infrastructure and faculties which boast of internationally recognised scholars especially from the US and Europe. It has also shown promise in skill acquisition and entrepreneurial programs designed to mould its graduates into job creators.
“Perhaps the most illustrative of the continuity model among the new projects is the International Diagnostic Centre. Conceived as a first medical facility that will arrest the trend of Nigerians travelling abroad for medical tourism, the project was designed as public-private partnership funding scheme. However, the 2009 global financial meltdown which coincided with the onset of the project resulted in the foreign partners backing out of the project after N1.4 billion had been expended by the state government on state of the art equipment and superstructure.
“This is expected to be complemented with a first class referral hospital to be privately built by Oschener of New Orleans. Other projects which suffered similar fate but had to be replaced were the Kwara State Truck Plaza, the New Secretariat and Phase Two of the Commercial Agricultural Project.
“The N4.5 billion saved from this went towards projects such as Urban Roads, Ilorin Metropolis Street light project, Kwara Mall Project, Ilorin Township Stadium Project and preparation for the International Vocation Centre. These projects were approved by SEC before the state government commenced implementation.
“Bearing in mind what had already been expended on the projects, the government has no choice but to raise additional funds to complete the project to ensure that the invested funds do not go to waste. Also significant is the plan to complete the apron of the Ilorin International Airport Cargo Terminal at the cost of N600 million”.
Akorede explained that the Cargo Terminal project is designed to capitalise on Ilorin’s strategic position as a confluence between the west and the north as well as its reputation as agrarian state to establish it as a hub for the export of agriculture and other produce from the country.
Faced with the global economic gridlock and foreign partners’ lukewarm attitude, the state government, he said returned to SEC to seek approval to substitute the projects with other capital projects.
“Following the approval, the monies meant for the original projects were used to fund Urban Roads Project, the Ilorin Metropolis Street lights Project, the state electrification project, Rural and Feeder Roads Projects, the on-going Kwara Mall Project, the first phase of the Ilorin Water Reticulation Scheme and as well as the preparatory stages of the Kwara Vocational Centre”, he added.
Akorede disclosed that apart from the above, the government is set to begin implementation of other high impact projects, especially in health, one of its core policy areas, stressing that while the previous administration made significant progress in the area of primary health care, Ahmed intends to moving to strengthen the secondary and tertiary health institutions.
He recalled that governor Ahmed while inspecting the General Hospital, Omu-Aran, Ifelodun Local Government Area of the state last December, had announced his administration’s plan to renovate 5 general hospitals in the state to bring them to globally accepted standards.
This, he said, was part of his administration’s drive to ensure access to affordable and quality health care. The affected hospitals are Ilorin, Omu-Aran, Offa, Share and Kaiama. Akorede agued that, “going by the plans outlined by the state government, the transformation of Kwara into a modern state as Ahmed prefers to put it is on course”.