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Delta State And N700billion Debt

 

By Sunny Okoro

{In the words of His Excellency Sen Dr. Ifeanyi Okowa, during his address of members of the state House of Assembly recently, the revenue receipts from Federation Accounts Allocation Committee (FAAC) has dipped significantly, dropping to just N8.03 billion in April,(as received in May 2015), from a high of over N20billion in previous years. The State is grappling with a Revenue Bond and indebtedness to commercial banks totaling N98.62 billion (Principal sum), while outstanding contractual obligations is N538, 601,962,421.50. In 2011, the State Government took a N50 billion facility from the bond market, with a repayment period of seven years in 84 installments at N1.098 billion each month. This facility will terminate in September 2018 with 40 more installments (totalingN43.92 billion) to pay with effect from June 2015.
In November 2014, Delta State also acted as guarantor to some selected contractors supported by the issuance of an Irrevocable Standing Payment Order (ISPO) of N2.23 billion monthly, for which the contractors received the total sum of N40 billion. The State now having paid four installments has 20 more monthly installments totaling N44.60 billion (including interest payments) extending through year 2017 to pay. We also have a N19 billion and another N715 million overdraft facility outstanding with Zenith Bank Plc. Some other smaller loans and overdraft facilities totaling about N2 billion with other banks.
As it stands today, a total monthly deduction of N4.60 billion will be made from our FAAC receipts with effect from this June through to March 2017, and thereafter N1.098 billion monthly until September 2018. This leaves us with a balance of N3.4billion assuming the FAAC allocation stays at N8.03 billion. Currently, the receipts from Internally Generated Revenue (IGR) is about N2.0 billion monthly, after deducting cost of collection

Based on the above, the governor went on to say that Unfortunately, the available fund of N5.4b is insufficient to offset our monthly wage bill, let alone fund overhead costs or for government to embark on capital projects. The State workforce as at May 28, 2015 stood at over 60,000 persons with a monthly personnel cost of N7,437,940,015.38 inclusive of the N678m State Government support to Local Government Councils for the payment of primary school teachers salaries.
The 2015 budget of N409 billion as passed is no longer realistic in the wake of current realities, which clearly show that our expected revenue is now far below what was projected. This budget, therefore, has to be reviewed. It is obvious from available statistics that the State will run a monthly deficit of about N2 billion, and would need to borrow to pay salaries of its workers, and finance the running cost of government. This is the dilemma that we face as we strive to deliver on our campaign promise of prosperity for all Deltans}.

The above extract was gotten from His Excellency’s speech to the State House of Assembly Members while explaining the current financial burden of the state. This obviously is not a good report card if it was to be presented by the man who led the state in the past 8years without any meaningful development to show for it. while I may not want to go into the level of mismanagement and total lack of performance of the last administration, I will want us to just reason together on certain facts surrounding this level of indebtedness of our precious state, and why it is totally unacceptable by the people of Delta, and therefore will love to see some level of explanation or probing of the past administration.

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Firstly as an individual and a Delta citizen, I find it very appalling that with the level of underdevelopment which has grappled the state under the Uduaghan led administration, we can still find ourselves in such high level of indebtedness, couple with the fact that, the country within the period of the last administration, actually enjoyed high volume of financial inflow due to high price of crude oil in the international market, and by virtue of the our position as one of the oil producing states and third highest revenue allocated state in the country, Delta state actually received more than enough revenue from FAAC within the last four years. According to the Vanguard of 16/07/2015 where it was stated in an article that states collected N9.6 Trillion in 4years and of this, Delta state collected a total sum of N714Billion and this amount is excluding of the states internally generated revenue (IGR) of about N2Billion monthly.

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From the extract above, His Excellency made us to understand that as of may 2015 the total work force of the state stands at 60,000 personnel, with a monthly wage bill of N7.4Billion. Let’s assume the total wage bill stands at N8Billion, in 12 months (1year) that will be N96Billion, and for 4years it will be N384Billion. When you subtract N384Billion from N714Billion, you will have N330Billion. Therefore, after excluding the entire wage bill of the state for 4years from what the state got from FAAC for 4years, we are left with N330Billion to be spent on developmental projects.

Not many of us will understand how much N330Billion is until you understand that many states in Nigeria actually live on an annual budget of less than N100Billion and if you divide N330Billion by 4, you will discover that in the last 4years, Delta state had an average of N82.5Billion per year for developmental projects “ALONE”. Same amount that some states spend on both monthly wage bill and still provide basic developmental projects for their citizens.

Now without being immodest one will expect that with such level of privilege amount, Delta state should be way ahead of many of its contemporary states when compared to development and well being of citizenry. But it is very obvious, that is not the situation presently. like i said earlier i am not going to talk on developmental issues, therefore i will just stick to the main issue at hand. So, if Delta state was privilege enough to have collected N714Billion from FAAC within the last 4years, and from our calculation after removing our estimated wage bill for 4years we still had a balance of N330Billion excluding a monthly IGR of N2Billion that will amount to N24Billion annually. How come the Uduaghan Government was able to spend all of these and still left a surplus debt burden of N700Billion?

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I don’t know about any other Deltan, but from my Local Government of Ughelli North, I cannot lay my eyes on any project that has gulped N30Billion, the entire roads in Warri are the worse I have seen in any of the major cities in Nigeria. Therefore can the state please come out in plain language and explain to Deltans how these monies were spent, and on what projects, and who are the contractors we owe these huge debts. Because we the youths and people of this great state will no longer bear the brunt of the illicit acts and actions of a few in government.

Therefore your Excellency we appreciate your effort in bringing to the open the current financial state of our beloved Delta but, we truly want a holistic explanation, if possible a forensic audit and probe of most of the activities and contract dealings of the past administration, as all of these cannot be phantom or explained by a sane minded individual. Until this is done, we the people and youths of Delta will keep asking this government for explanations.

Long Live Delta State.

About Sunny Okoro:

Sunny Okoro is the deputy publicity Secretary of Rethink Nigeria. He is a businessman, writer, public affairs analyst and an advocate for human rights and good governance. You can follow him on Twitter via @irosky007.

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