Ondo: N50bn Bond Strictly to Finance Infrastructural Projects

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James Sowole in Akure

The Ondo State Government at the weekend said the N50 billion bond approved for the state by the House of Assembly would strictly be for the completion of ongoing infrastructural projects and to fund new ones to be initiated by Governor Oluwarotimi Akeredolu’s administration.

The state Commissioner for Information, Mr Donald Ojogo, stated this in Akure, the state capital, during an interaction with journalists at the Press Centre of the Ondo State Council of the Nigeria Union of Journalists (NUJ).

The clarification, according to Ojogo, became necessary against the backdrop of insinuations in some quarters and particularly the opposition that part of the bond would be spent to prosecute the 2020 second term ambition of Akeredolu.

The House of Assembly had last Thursday approved the request of the Executive to raise N50 billion from the capital market, which would be in two tranches.

The commissioner said the raising of the bond became imperative in view of the dwindling federal allocation and enormous responsibilities of the government on infrastructural developments.

“By the time this government was coming, every state experienced very drastic reduction in the revenue that accrues to the states. There was a time some states were collecting N15 to 20 billion and I know of course at a point that this state collected N13 billion because there was money. FAAC at a point distributed close to N900 billion but now what is distributed?

“I don’t think this government has received up to N6 billion in a single month from FAAC since it came on board. It is as low as N4 billion in some cases which mainly went into payment of workers’ salaries including seven months arrears out of which six months had been paid.

“Do we now complain that because we are paying salaries we will not construct roads, upgrade our hospitals and desirable structures will not be put in place?

“So, the governor had to think outside the box. What the government decided to do is that rather than going to the bank to obtain a loan, it is better to go through the bond process.

“From that bond of N50 billion, 50 kobo or 50 cents of that money is not coming into government purse. It is between the capital market and the banks where the fund will be domiciled.

“The best way to fund a project is only through the bonds because the maximum interest rate is between 14 and 16 per cent. But if you go to the bank, it will attract 19 and in some cases 20, 21 per cent. So, it is of no burden to the state. This bond is targeted at specific projects.

“It will be highly unfortunate if with the zeal that the contractors have been deploying themselves to the state, lack of funds hinders what has been put in place,” Ojogo said.

The commissioner said contractors were not given any money as mobilisation fund but get paid based on the level of work done.

The commissioner debunked the insinuation that the money would be used to prosecute the second term ambition of the governor.

“It is not true when people say it is because we want to go into that we are raising bond.

“Akeredolu won the last election without taken bond. We don’t need a bond to fund Akeredolu’s second term, that is if he so desires to run for second term.

“If he didn’t use a bond to prosecute the 2016 election, he will not need a bond to do this, because the bond’s conditions are so stringent.

“In any case, if the opposition did not say anything about the N50 billion bond where will they say something. So, we must allow them to say something. It is our responsibility and duty to explain to the people that we need this thing to fast-track development but to also take development to the next level we have earmarked,” Ojogo stated.