Obiano Plunges Anambra State Into Fiscal Strangulation Says CLO

At the thick of the campaigns to the Anambra 2013 governorship elections that brought in Chief Willie Obiano and Dr. Nkem Okeke as governor and deputy governor respectively, one of the qualities which Obiano’s ‘marketers’ brandished to sway the electorates to vote for him was his track record of financial probity and expertise.

The ‘marketers’ told us that the state finance will be safe, sound , healthy and will blossom under the Aguleri born Chief since he retired as an executive director in a commercial bank while he had also served as a chartered auditor with a multinational oil firm.

But like the Igbo proverbial bitter kola which they say doesn’t taste as it sounds while it is being chewed, Obiano’s governance in the last 22 months in Anambra has shown that theory in most cases can be far from practical.

Inheriting a state that was free from the burdening issues of backlog of owed salaries, pension and gratuities as well as any financial strangulating encumbrances, Obiano felt that he needed to show Anambrarians that the state is rich and governance cannot continue in the style of his predecessor whom those who misconstrued his governance style then described as araldite and aka gum.

That was how ostentatious living started in full bloom in Anambra, with lavish parties, guzzling of costly champagnes, renovation of government house and governor’s lodge with outrageous amounts among others.

While the economic meltdown and dwindling of oil revenue resulting in sharp drop in the monthly allocation to states hit many states like thunderbolt resulting in austerity measures and alternative sources of revenue, Governor Obiano in order to maintain the tempo as a ‘chopping governor’ also announced a slight increment in the salaries of civil servants.

Number of political appointments continued to swell that sources close to the seat of power told the CLO in confidence that appointment letters for SAs, SSAs and other aides with reckless duplicity of functions became a daily affair often done at the spur of the moment to massage some ego and also to excite a particular host or guest.

When the reality dawned that the treasury has become virtually empty while capital projects have been stalled with many contractors being owed billions of naira, the next option was to go and borrow.

In seeking avenues to justify the borrowing amidst the public perception that ex governor Obi left the state in a healthy financial status with investments and cash, the next move was to address the press to puncture Obi’s hand over notes.

Another large chunk of the cash from the state’s depleting resources was allegedly voted and expended for image laundering and handling the media backlash that trailed the government’s infantile act of denouncing a hand over note after almost two years.

Before the buzz could die down, the governor proved right some analysts who had already disclosed that the hoopla over Obi’s handover note after almost two years of his leaving office was to find an excuse to start borrowing.

Governor Obiano eventually  sent a request to the House of Assembly for the approval of a N10 billion facility loan with some asphyxiating conditions which the people of the state will suffer the consequences in due time.

Findings from the document obtained by the CLO on the conditions attached to the loan facility revealed that the loan has a 9.0% interest rate with a tenor of 20 years or 240 months.

The indicative amortization schedule in the loan facility shows that the accruing interest for the first year is N900, 000,000 while the 20^th year will be N90, 451,218 with a monthly payment of N89, 972.596.

The implication is that the state will cough out N21, 909,295.002 as repayment pattern within the 20 year period with a total interest charge of N11, 909,295.002.

This is a serious yoke and chain to the incoming administrations in the future when the present governor might have concluded his tenure and left office.

Juxtaposed with the total cash value of  local investments of N27.2 billion and  total cash value of foreign currency bond investments of $155.48 million (N26.5 billion done by the immediate past governor , Mr. Peter Obi, which have yielded close to N95.18 billion (as at November 2015 with total cash left in MDA accounts) one could decipher that  a former governor while in office was investing to consolidate the state on a sound economic footing while a sitting governor is fast trying to subject the state into perpetual bondage and financial hemorrhage.

As if the situation is not frightening enough, there have been recent feelers though yet to be confirmed that another negotiation for a fresh loan is already in the offing while one was sealed and delivered recently.

The way out of dwindling economic fortunes for states lies not in borrowing but in cutting of one’s coat according to one’s size.  Reduction in the size of over bloated aides, applying the age long economic principles of Scale of Preference and Opportunity Cost and thinking inwards for avenues to generate income are some of the necessary steps needed to save the step from financial indebtedness.

The implication of the present scenario in Anambra is that if the trend of borrowing is sustained in the state, there will come a time when all the treasury bills of the state will be tied on Irrevocable Standing Orders (ISO) bringing a situation where the state’s financial obligations to lenders will be deducted at source leading to owing of salaries, contractual financing and other fiscal commitments.

Efforts must be geared by all and sundry to rescue the state from the path of economic doldrums and the years of the locusts.

The light of the nation state must maintain its path to greatness and fiscal buoyancy and no force, action or inaction should tamper with this goal. We say no to further borrowing in Anambra.