PDP: With N111bn Debt, Akeredolu Can’t Justify N50bn Bond

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· We need money for infrastructure projects say govt

James Sowole in Akure

The Peoples Democratic Party (PDP) yesterday deplored the Ondo State House of Assembly for allowing the state governor, Mr. Oluwarotimi Akeredolu to raise a whopping sum of N50 billion through bond issuance programme.

Besides the state’s fresh N50 billion bond issuance programme, the party expressed discomfort with the penchant of the governors in the South-west state to putting their states under burden of debt.

The PDP Publicity Secretary, South West, Mr. Ayo Fadaka criticised the decision of the state government to borrow additional N50 billion through bond issuance apart from its debt stock currently standing at N111.709 billion in an interview with THISDAY yesterday.

Fadaka said Akeredolu had no justification “to put the state under another burden at this time with the huge debt on the neck of the state.

He claimed that the debt stock of the state according to data gathered from the Debt Management Office through website stood at N111.709bn.

He alleged that the Ekiti State Governor, Dr Kayode Fayemi did the same thing during his first tenure which became problem for the state till date.

He added that the same thing was done by the former Osun State Governor, Mr Rauf Aregbesola, who borrowed money to execute white elephant projects and many of which he was unable to complete.

Fadaka observed that the debt burden of Osun State made it impossible for the state “to pay salaries of workers because of huge deductions on monthly basis.”

According to him, it is absolutely unfortunate that Ondo State is embarking on the same voyage despite the huge debt on ground just as the Federal Government had just said that it would start to deduct bail out fund given the state’s from their allocations.
“There is nothing to justify the need for such bond. We all know some of the revenue accrued to the state lately. The current administration has fallen short of accountability.

“The wealth of any state is not pocket money of any governor that can be spent anyhow. As far as we are concerned, the essence of taken the money now would be defeated.

“The governor wants to take the money to brighten his chance for his second term ambition among the other contestants for the party ticket and also to prosecute the real 2020 election in the state. This will fail.”

He explained that the people of the state “are more enlightened and cannot be bribed again during election. The people want somebody that would impact on their lives.

“The people remember that before Akeredolu got into office they enjoyed free maternal and child healthcare, free education at primary and secondary levels while students of the state’s higher institutions were paying cheapest tuition and they know how much they are paying now.”

He noted that it was visible “to anybody now that people are now paying for their wards to access secondary education while they pay through their nose for maternal and child health, which they enjoy freely before Akeredolu came on board.

“We maintain that there is no justification for the new loan but if he is hell bent on taken the loan, he should be ready to account for every kobo because we are going to ask for everything when the PDP takes over the government,” Fadaka said.

However, the State Commissioner for Information and Orientation, Mr Donald Ojogo said that the bond would strictly be spent to complete ongoing infrastructure projects and to fund new ones to be initiated by the administration of Akeredolu’s in the state.

Ojogo defended the decision of the state government to initiate the bond issuance at the weekend, noting that it was not true that the governor planned to use the money to prosecute the 2020 governorship election as being insinuated by opposition.

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

At the time the Akeredolu administration came in, Ojogo said every state “experienced very drastic reduction in the revenue that accrues to the states. There was a time some states were collecting N15 to N20 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 do not think this government has received up to six billion in a single month from FAAC since it came on board. It is as low as four 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 was 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 percent. But if you go to the bank, it will attract 19 and in some cases 20, 21 percent. 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 if lack of funds hinders what has been put in place”, Ojogo said.
He explained that contractors were not given any money as mobilisation fund but get paid based on level of work done.
According to him, it is not true when people say it is because we want to go into election 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.

He said: “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.”