Debt

Debt burden threatens governance in
Taraba
By Charles Akpeji, Jalingo
FROM all indications, the huge expectation of
dividends of democracy by the people of Taraba
State from the incoming government of former
Minister of State for Niger Delta Affairs, Darius
Ishaku may turn out to be a mirage considering
the precarious financial position of the state.
Apart from being hugely indebted to so many
sources, which has made the state to go cap in
hand looking for survival doles, the system
appears incapable of gaining financial strengths
to meet the obligations of the state to the
people.
Following the inability of the out-going governor,
Danbaba Suntai who began his administration on
a good note before the October 25, 2012 plane
crash which forced him out of office, to meet up
with the demands of the people, the
expectations of the people from the governor-
elect, have skyrocketed.
From available indices, it is obvious that the
tenure of Ishaku would face a herculean task in
meeting the yearnings of the people because a
large chunk of revenue from the federation
accounts and other sources would end up in
settling the debts already incurred by the
outgoing government.
Rather than fashioning out ways on how to build
on the achievement of the present
administration, the new government would no
doubt dissipate a lot of energy in managing the
state’s debt burden.
That the state government is presently looking
for funds to foot the bills of Civil Servants is no
longer news. What is news is that contractors
handling various projects have since left the
state due to the inability of government to
effectively mobilize them to their various sites.
This has also brought business activities to a
standstill, as the state is predominately a Civil
Servants state where business only thrives when
the public officers get their remunerations. The
state-owned university is at the verge of collapse
as the institution has embarked on an indefinite
strike for the past months due to the paucity of
funds to run it.
The financial crisis is so bad to the extent that
the state government is unable to pay for
advertisement placed in no fewer than four
national dailies for both President Goodluck
Jonathan and General T.Y Danjuma’s birthdays
that took place on November and December
2014 respectively.
The Guardian gathered that debts such as bonds,
overdrafts and loans are presently tied to the
neck of the state government and there is a
palpable fear that the burden may hampered the
new government from fulfilling its election
promises to the people.
It was also gathered that the debt profile of the
state, which sources disclosed was incurred by
the sacked Acting Governor, Alhaji Garba Umar,
has risen to over N27 billion.
While the debt profile continued to increase like
the HIV/AIDS prevalence rate in the state, the
state Internal Revenue has continued to dwindle
because not much attention is being given to the
sector.
Confirming the bad financial situation of the
state, Commissioner of Finance, Emmanuel
Gowon, in a recent chart with newsmen, agreed
that the “ present financial situation of the state
is so bad that the state is finding it difficult to
pay salaries.”
Describing Umar as the architect of the
precarious financial situation of the state, the
new administration held by the reinstated Deputy
Governor, Sani Abubakar Danladi (now Acting
Governor) according to him “inherited about N20
billion debt from the sacked Acting Governor.” A
breakdown of the debt profile according to him,
include N9.5 billion overdraft, N5.6 billion term
loan and another N2.7 billion unpaid cheques to
various ministries and contractors as well as
other liabilities and claims that added up to
about N20 billion.
He said to ensure that salaries are paid, the
present administration had to negotiate with
banks to convert the N7.5 billion debt of
overdrafts into a term loan for a duration of 20
months.
This means that out of Taraba’s monthly
statutory allocation of between N3.5 to N3.6
billion, the state pays close to N1 billion for the
term loan.
The state is then left with N2 billion to pay the
revolving loan, which it takes back to pay staff
salaries of about N1.8 billion.
In an attempt to salvage the situation, it was
learnt that government has to negotiate for a
N30 billion bond. Gowon said it would take a
long time for Taraba, a state which
monthly Internally Generated Revenue (IGR) is
only about N140 million, to come out of the its
present situation unless it secures the bond.
He said if the state can access the facility, the
first tranche of N20 billion could be used to
offset the term loan and have a balance while
the remaining loan would be paid in a period of
seven years with N390 million monthly, without
stifling the running of government and yet
embarking on some capital projects.
The State Executive Council (SEC), according to
him, has collectively agreed on the bond and had
communicated the House of Assembly to seek
their approval.
The Commissioner sought the understanding of
Taraba people as he maintained that it was not
their fault but a mess inherited from the sacked
government, which he said would have crumbled
the state to a level of not paying salaries for
more than three months if they had not
negotiated.
Though a committee to ascertain the alleged
financial recklessness of Umar was constituted
by Danladi, who on assuming office on November
21, 2014, made it known that he met an empty
treasury, the people are however not convinced
that the findings and recommendations of the
committee would see the light of the day.
Not comfortable with the fraud that allegedly
characterized the sacked administration, several
persons who bared their minds to The Guardian,
said that the only way out of the quagmire is to
bring to book those indicted by the committee to
serve as deterrent to others.
A top official of one of the banks that the state
government is indebted to, said most of the
funds coming in from the federation account are
paid into its coffers.
He said, “I must confess to you that my heart is
bleeding for the incoming governor.
This is because I don’t known where he is going
to start. As we are talking now, our bank and
other banks are bent on retrieving their money
from the state government. So all the money
presently coming in through our banks no longer
get to the state government.”
Corroborating the Commissioner of finance, a top
staff of the Board of Internal Revenue revealed
how fund revenue generated by the Board went
down the drain.
Like the Banker, he expressed sympathy for the
incoming governor stating “ I wonder how he is
going to cope with the huge debts he is going to
inherit.”
While calling on the present government and
anti-graft agencies to bring to book, all persons
that have hands in the financial mess presently
ridiculing the state, he said the incoming
governor should the financial position of the
state public on assumption of office.
A breakdown of the debt profile according to
him, include N9.5 billion overdraft, N5.6 billion
term loan and another N2.7 billion unpaid
cheques to various ministries and contractors as
well as other liabilities and claims that added up
to about N20 billion. He said to ensure that
salaries are paid, the present administration had
to negotiate with banks to convert the N7.5
billion debt of overdrafts into a term loan for a
duration of 20 months.