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True & Accurate Position Of H.E. Chief Peter Obi Administration’s N75 Billion Investments Handover Notes

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 Willie-Obiano

Below are exclusive details of the said monies left behind by the former governor of Anambra State, Chief Peter Obi. The information was received by 247ureports.com from an aide to Governor Obiano in the person of Mazi Obi ‘Mbuze Agulu’.

S/N LOCAL CURRENCY INVESTMENTS  AMOUNT COMMENTS
1. Nigeria Independent Power Projects N9.0bn This investment was effected by the Federal

Government of Nigeria wherein the Federal Ministry of Finance charged a percentage of all State and Local Government FAAC revenues.

Involuntary investment with no individual consent

whatsoever required from Anambra State Government.

2. Orient Petroleum Resources Plc N4.0bn Land resources of Anambra State Government, valued at approximately N2.23bn and cash investment of approximately N1.77bn.

 

Specifically, H.E., Dr. Chris Ngige invested N100m and issued C of O for land acquisitions. H.E., Virgy Etiaba invested N1.17bn while H.E., Peter Obi disbursed N750m and converted the above-mentioned land into shareholding in Orient Petroleum Plc.

3. Onitsha Hotel, Onitsha N1.0bn Amount paid to contractor as initial mobilization for hotel construction.
4. Agulu Lake Hotel, Agulu N1.0bn Amount paid to contractor as initial mobilization for hotel construction.
5. Awka Shopping Mall, Awka N0.9bn Amount paid to contractor as initial mobilization for shopping mall construction.
6. Nnewi Shopping Mall, Nnewi N0.6bn Amount paid to contractor as initial mobilization for shopping mall construction.
7. Onitsha Shopping Mall, Onitsha N1.0bn The previous administration contributed the Former Anambra Broadcasting Service land to the project’s special purpose vehicle in exchange for a 15% equity stake.

It is pertinent to note that Africa Capital Alliance is the financial investor on this project.

8. Intafact Beverages Limited N3.5bn To date, Anambra State has invested N1.9bn in the company. The last administration invested about N1.4bn while the current administration invested N540m to finance expansion plans in April, 2014.

 

No further investments were made by Anambra State Government in Intafact Breweries. This figure should be revised to N1.97bn.

9. Onitsha Business Park I N300m During the last administration, ANSG via the Ministry of Industry, Trade & Commerce built a commercial real estate development in Onitsha at a cost of N300m.
10. Onitsha Business Park II N300m During the last administration, ANSG via the Ministry of Industry, Trade & Commerce awarded a contract to build another commercial real estate development in Onitsha at a cost of N300m.

 

11. Anambra State Independent

Power Generating Company

Limited

N250m The sum of N250m was paid to the project developers, Denca Resources to serve as ANSG’s investment in a proposed 400MW project in Ogbaru, Anambra State.

 

Since the commencement of the new administration, Denca Resources has not been forthcoming with any information. The Company has also not honoured any invitations for an Executive briefing session.

12. E-Force Limited N126m During the last administration, ANSG via the Ministry of Agriculture paid N126m to E-Force Limited. This sum represents 20% of the cost of 100 tractors from

Belarus. E-force Limited provided remainder 80%.

13. Emenite Limited N750m Emenite Limited is a leading manufacturer of fibre cement roofing and ceiling products. Dr. The Hon. M. I. Okpara, erstwhile Premier of the Eastern Nigeria, invested in Emenite Limited in October, 1961. In 1993, during the creation of States in Nigeria, 16.5% equity stake was allocated to Abia, Anambra, Enugu and Imo states.

No additional monies were invested by the subsequent administrations.

14. Quoted Investments Portfolio N350m Current value of equity portfolio is approximately N200m given the current decline in stock prices on the Nigerian Stock Exchange.
15. NSIA Anambra State

Contribution (State + Local

Govt)

N1.5bn This investment was effected by the Federal

Government of Nigeria wherein the Federal Ministry of Finance charged a percentage of all State and Local Government FAAC revenues.

Involuntary investment with no individual consent whatsoever required from the State Government.

16. Investment with Bank of Industry to Support SMEs in Anambra State N500m Counterpart funds (with BOI) for SME facility. Ministry of Industry, Trade & Commerce.

Not an Investment.

17. Investment to Support Micro Credit Bank in Anambra State N500m Counterpart funds (with BOI) for SME facility. Ministry of Industry, Trade & Commerce.

Not an Investment.

18. Investment with Bank of

Agriculture to Support credit to

Anambra Farmers

N480m Counterpart funds (with BOA) for Anambra Farmers facility via the Ministry of Agriculture. 

Not an Investment.

19. Commercial Agriculture Scheme N1.0bn Funds borrowed from the Federal Government for onlending to farmers in the State via the Ministry of

Agriculture and All Farmers Association of Nigeria

(ALFAN), Anambra Chapter. Not an investment.

SUB-TOTAL (1-19) N27.0bn  
20. Foreign Currency Investments (US$155m) N26.5bn During the final months of the last administration, the

State invested a total of US$155m (N26.5bn) in Eurobonds and other foreign denominated securities held with Access Bank, Fidelity Bank and Diamond Bank.

 

Given the current decline in capital markets, this portfolio of Eurobonds had a market value of approximately US$132m (N26.4bn), reflective of prices dated September 21, 2015. If ANSG were to liquidate the portfolio, the State would incur a US$ loss of US$32m (14.8%) and a Naira loss of N100m, respectively.  

21. FGN Approved Refund N10.0bn This sum represents ‘Approved Refunds’ by Federal Government for State funds spent on Federal-owned roads across the State. This figure is at least 100% higher given the investment in Federal infrastructure by the current administration over the last 18 months.

 

Given current economic conditions and the result of efforts made by the current administration to receive reimbursements, it is difficult to estimate a timeframe for the receipt of the said funds.

Not an investment.

22. Expected Bank Balances as at 31 December, 2013 N11.5bn December, 2013 balance. However, the State’s cash balance in March, 2014 (upon handover) was approx.

N9.0bn.

GRAND TOTAL LOCAL & FOREIGN

INVESTMENTS, REFUNDS & BANK

BALANCES

N75.0bn  

ANAMBRA STATE GOVERNMENT

Summary:

 

Based on the figures detailed above which are taken from the Handover Notes from the previous Administration to the current Administration, it is evident that the actual and voluntary cash investments made by the previous administration amounts to approximately N35.5bn consisting of mobilization paid on contracts for shopping malls and hotels, cost of two Business Parks in Onitsha, investments in Eurobonds, amongst a few others. Items such as counterpart funds held jointly with domestic development finance institutions, land contributions, FGN refunds, differences in bank balances and investments made directly by the Federal Government on behalf of the three (3) tiers of government totaling approximately N39.5bn have been reclassified as “Illiquid Investments”, “Not Investments”, “FGN Receivables” and “Involuntary Investments”.

 

However, to provide a true and fair picture of the State’s net position on March 17, 2014, the Investments Handover Notes ought to have captured current liabilities and contingent liabilities also borne by the previous administration as at the time of handover. To put this in context, the total portfolio of inherited projects valued at approximately N185bn was however not captured in the breakdown of the Handover Notes. Nonetheless, given the fact that the true test of Good Governance lies in a Government’s ability to ensure policy continuity and consistency irrespective of perceived political differences, the current administration created a strategic plan titled “the 4Cs strategy” to achieve this. Key components of this Strategy are 1) Continue, 2) Complete, 3) Commission all inherited projects and 4) Commence the implementation of a comprehensive Economic Blueprint centered around achieving sustainable and inclusive economic development.

 

To this end, since March, 2014, Governor Obiano has paid a total sum of N46.8bn to contractors on inherited projects; this figure represents over 50% of total FAAC revenues received between March, 2014 and August, 2015. See Appendix 1. It is also pertinent to note that the foreign currency investments totaling US$155m have not been liquidated to fund any payments of certificates arising from inherited projects. Indeed these investments are presently showing an unrealized (book or notional) loss of -20.8% in US$ or 7.1% in Naira.

 

During this same time period, the current administration has taken concrete steps to improve monthly internally generated revenues (IGRs). These steps include among others, introduction of automation in MDAs systems and processes and implementing a single IGR collection window across all MDAs; these have immediately yielded very impressive results as monthly IGRs have grown at a rate of 260% from N500m to about N1.3bn, largely by closing leakages. Our target is to hit the N3.0bn mark and the administration shall not relent until this is adequately achieved. Although monthly FAAC revenues have decreased by over 50% and this has recently led to 30 peer states accessing CBN bailouts for salaries arrears and bank loans, Anambra State’s finances remain very healthy and robust. Governor Obiano continues to pay salaries (inclusive of a 15% increase earlier this year) and remit pensions on the 25th of every month. In addition, the State also continues to meet fully verified, inspected and certified contractor obligations as and when they fall due.

 

Conclusion – A New Dawn:

 

In March 2014, Governor Willie Obiano presented the Anambra State Strategic Economic Blueprint, a robust, multisectorial master plan designed to transform the State. The key objectives of this blueprint are economic growth, job creation and urbanization of Anambra State. Governor Obiano asserted that these objectives can be achieved through an aggressive investment drive given Anambra State’s investment potentials as well as the State’s ability to attract investors by providing a much-improved business climate.

 

To actualize this dream, On April 14th, 2015, Governor Obiano established the Anambra State Investment Promotion and Protection Agency to initiate and support measures which enhance the investment climate in Anambra State for foreign, domestic and indigenous businesses. The Agency also protects, promotes, monitors and coordinates investment, providing the requisite services for investors to drive investments from coordination to consummation. ANSIPPA’s Governing Council is a team of thoroughbred professionals with international exposure and boasts of over 300 years of relevant industry experience spanning developmental economics, diplomacy & international relations, banking, investment promotion and law.

 

Over the last 12 months, ANSIPPA has taken steps to position itself as the country’s premier investment promotion agency’ providing existing and prospective investors with attractive investment opportunities, business facilitation services and world-class services to ensure and guarantee 100% investor’s satisfaction. This has culminated in the State attracting over US$2.0bn (N400bn) in investments from credible indigenous, domestic and foreign investors across the 4 pillars (Agriculture, Industrialization, Trade & Commerce and Oil & Gas) and 13 enablers of Anambra’s economy.

 

Signed:

 

Prof. Solo Chukwulobelu 

Secretary to the State Government

Anambra State Government

ANAMBRA STATE GOVERNMENT

APPENDIX 1:

 

 

S/N DESCRIPTION  AMOUNT
1. Total contract sum for all projects inherited from Peter Obi’s Administration N185.1bn
2. Total amount paid by Peter Obi’s Administration on inherited projects N78.9bn
3. Total amount paid on inherited projects by Gov. Obiano Administration (Mar’14 and Aug’15) N35.1bn
4. Total amount paid on projects initiated by Gov. Obiano Administration (Mar’14 and Aug’15) N11.7bn
5. Total FAAC revenues received between Mar’14 and Aug’15 N69.2bn
6. As at March 17, 2014, the previous administration had achieved 42.6% completion of the total inherited projects
7. As at July 31, 2015, Gov. Obiano’s Administration had achieved an additional 19.0% taking the completion rate to 61.6% on inherited projects from the past administration
8. Gov. Obiano’s Administration has spent 50.8% of its FAAC Revenues on settling payment certificates arisen from inherited projects from the past administration

 

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