Review & Outlook: Stop Criminalising Aregbesola With Debt, Declare Inherited Assets

Byhvzclarence

PublishedMarch 25, 2022

BY WALE BOLORUNDURO

THAT an administration is still agonizing over its ill-perceived challenges left by his predecessor after three and half years in government is a clear testament that such administration is not fit to govern the state.

Aregbesola definitely met multiple of humongous problems and challenges when he became governor of Osun on November 27, 2010, and was joined by Chief Gboyega Oyetola on the 7th January, 2011, as the “Governor-in-waiting”. He later stayed on for eight years as the Chief of Staff and if Oyetola was compelled by his brother, Asiwaju Bola Tinubu to join in the first instance, then the followings must have kept him during the second term; the benefit of succeeding Aregbesola, the frills of the office and the creation of the assets, which are being dubbed challenges now by Oyetola and being used as excuses to abandon projects and programs that have endeared Ogbeni to the people of Osun.

I have no beef with the abandonment of projects by the current governor of Osun or his “lack of skin” in the inherited projects. It is his choice and he is entitled to it, but using the debt that he can refinance or restructure as an excuse for his choice, is a sacrilege for a government, headed by a man, who was the Chairman of the governing board of the Osun Debt Management Office and the “Chief Host” of the State Tender Board, during Aregbesola’s first term. I never heard him complain or nudge anybody in the administration of any misgiving or reservation in whatever form on the debt financing strategy or the choice of assets.

Debt financing is never a disadvantage to any administration, especially when it has been used for the transformation of the state, for the roads’ renewals of highly populated towns and for the development of the state capital, Osogbo, that was previously, a glorified local government headquarter. The fact is that the assets behind those debt now, at current or prevailing prices worth much more than the value of the debt because of inflation and exchange rate effects on goods and services in Nigeria. Ogbeni definitely, met the lowest internally generated revenue in the last decade and worse conditions of infrastructures than Oyetola, subsequently met.

Aregbesola had to make a choice to solve the problems and it is high time, Oyetola stopped making it looks like a crime for Aregbesola to have done so.

Also, the richest country in the world, United States of America, uses debt to finance its infrastructures and to stimulate its economy. Some few months ago, Governor Babagana Zulum of Borno State announced that he had obtained an approval from his State Assembly to borrow to clear N32bn outstanding pension, gratuities and arrears. Similarly, Osun being a legacy state from old western state and old Oyo state had arrears of pensions and gratuities due to be paid to about 10,000 state and LG retirees, who had been retiring from the state services since 1991 and the retirees of the old Oyo State that were deported to Osun in 1991. When Aregbesola came in, the workers were threatening previous administration with a strike because of outstanding minimum wage and salary adjustments, which had not been done in the previous seven years. The backlog of arrears was compounded by the military and successive administrators, who also left humongous gratuities and pension arrears of state and LG retirees. Aregbesola made a choice to borrow and to clear them as well as to fund the salary increases that were implemented thrice between 2011 and 2014. The sum required, totaling N35.50bn was part of the state’s N86.7bn that was restructured and refinanced by FGN bond in August 2015.

Other items in the FGN restructured bond included N8.2bn on LG projects (10 km roads in each of the 30 LG and LG sanitation projects) part financed and rolled into the FGN bond. Very soon, we will be listing other capital projects and developmental programs, which were included and rolled into the FGN restructured bond, totaling N43bn. In the interim, the items in the FGN bonds include balances from (1) Initial part-financing of Adesoji Aderemi (circular road) with four (4) flyovers/bridges/underpass in Osogbo to the tune of N8.6bn at initial drawdown (2) Osogbo Old Garage-Ikirun-Ila-Odo- Kwara Boundary Dual Carriage N6.25bn at initial drawdown (3) MKO Abiola Airport N2.6bn part funding at initial stage, out of N3.6bn completion certificates approved by Ministry of Works (4) Opon Imo (Tablet of Knowledge) project, part-financed to the tune of N1.0bn (5) 20 units of armored personnel carriers, part-financed to the tune of N1.56bn. These five (5) items were extracted and summarised from the list of about 48 payment items that will be presented in the next publication and if space permits, the contracts and names of the contractors will be listed too.

For the mischief makers, further funding of items (1) and (2) were made from other sources to push the projects above 50 percent before Aregbesola left on the 26th November, 2018.

To accuse Aregbesola of accumulating debts without also letting people know what the debts were used for is dishonourable enough, to start playing politics with the debt figure is mortally immoral and to disown your own debt figure, previously confirmed in the front of a recording camera during a public debate is much more ignoble in purpose and in character; it is the highest form of perfidy ever displaced in public office. Just about the time to wrap up this piece, so as to have time to descend heavily on the potpourri of lies, recently churned out by the current Commissioner for Finance of the state Bola Oyebanji, someone sent me a publication by Daily Post of 23rd March, 2022, three days after an official of the State issued an abominable statement that Osun domestic public debt inherited from Aregbesola was over N200bn. It was another figment of their weird imagination that could only come from hallucinated mind and far from that of the Federal Agency, Debt Management Office’s figure , published by Daily post, which put the debt figure of Osun at N134.7bn as at December 31st, 2021.

The figure from the federal government agency (DMO) can be reconciled with the debt figure announced in September 2018 by Oyetola publicly during the 2018 governorship debate, in which he put the domestic public debt of Osun at N141bn. Truth is ever constant and we are satisfied. The domestic public debt figure passed on to Oyetola has been laid to rest. We have said the weighted average of the interest rate is about 12 percent per annum and that the portfolio is long term portfolio; none of the components is with any commercial bank. The position confirmed by Abuja DMO is expected, considering the long-term nature of the portfolio and being in its highest yield period for the investors, until the yield curve turns, then, the repayment will start having significant effect on the principal. Also, the position is also expected because the FGN backed portions of the debt portfolio also had forbearance periods during and after COVID-19, when the states were not expected to service their FGN-backed debts.

For Governor Gboyega Oyetola to sleekly allege that his predecessor has bequeathed debt to him, without letting people know the assets behind the debt and what the debt was used for is tantamount to cheap vilification of his predecessor.

Wale Bolorunduro, PhD, Former Commissioner of Finance, Economic Planning and Budget writes from 6B Lase Ogunleye Street, off Fadahunsi Avenue, Ilesa, State of Osun.