N50BN BOND: IT WILL ACCELERATE DEVELOPMENT â€“ OGUN COMMISSIONER
Ogun State Commissioner for Information and Orientation, Mr. Sina Kawonise
In this interview with ADEMOLA ONI, Ogun State Commissioner for Information and Orientation, Mr. Sina Kawonise speaks on the disagreement between the state executive and legislature over 2010 budget and N50bn bond. Excerpts:
The state Governor, Otunba Gbenga Daniel, delayed the signing of the state 2010 appropriation bill for three weeks after the State House of Assembly passed it. What was responsible for this?
Quite frankly, the executive arm of the government has some issues with certain aspects of the budget. But I can also tell you that consultations are ongoing to resolve disagreements between the House and the executive arm of government. The commitment that we have got from the lawmakers is that we can present some of these items as a supplementary budget because they have seen the errors contained in the budget. Their excuse was that the executive did not give them enough information on certain areas.
I will give you an example. The contingency vote was reduced to zero. What is the contingency vote used for? They are things that you do not anticipate? The South-West Obas came to Ogun State recently and we hosted them.
Another area is the insurance for government's property in the state. We have arrears of about two years now. So, N400m was proposed to offset all these, but it was reduced to N140m.
What that means is that our physical assets are exposed. But as I have said, there is really no fundamental disagreement. They have said the executive could raise a supplementary budget which would be assented.
What are the fundamental issues which both sides disagree on?
I have mentioned two: insurance and contingency. I think another very fundamental area is in the Internally Generated Revenue. The budget actually says that the IGR of the state should be improved. In fact, they (House members) even projected bigger figure than we actually proposed but at the same time, the remuneration for the consultants, who actually assisted in getting this thing, was slashed. So, what that means is that we cannot meet that target.
The lawmakers said they removed N9.8bn, which the state government proposed to use to service the bond it had not collected. They also removed N3bn from the budget of the office of the economic adviser. They are saying that if you have not taken the bond, how can you allocate money to service it?
The budget was prepared in anticipation of the House's approval of the bond. The House has not said it was not going to grant the bond. What the House said was that we should give it more information on what we were going to use the bond for. That also is being done. The N3bn removed from the office of the Economic Adviser is very key. We have some economic projects. We have to construct some bridges and some roads . As I am talking to you, in the last 15 months, Ondo State has spent N12bn on its own side of Olokola Deep Sea Port and OK LNG. Investors are now settling down on the Ondo side. So, if we do not have the fund to provide infrastructure, we are going to lose out on both the Deep Sea Port and the OK LNG.
On the side of the economic adviser, you said your proposed budget was slashed to N1bn. The governor said he would not like to start any project that he would not be able to complete. Will the current administration in the state be able to complete those projects with the N3m voted for?
No, what the government needs the N4bn for is not the feasibility study but projects that had been approved and whose feasibility studies had been done. Their economic bases had already been established. This one is just implementation. In fact, that aligns precisely with the principle that we do not want to start what we cannot finish. So it is not about any new project.
If you start the international airport now, when are you likely to complete it since it is not likely to be completed in one year?
Yes, the governor has said basically it is not good for him to start a project that he cannot complete. But the site has been cleared and the project has started. That should not be misconstrued to say that the government would not do something it can't complete because government is a continuity. When this government is leaves, another one is comes in. So, it is practically not possible to say that it is only things that you will complete that you will start.
The cargo airport is a long term project and it has long term economic benefits. The government cannot even exhaust the whole of the N50bn bond that we are talking about on it because we have just barely a year to leave office. There is a master plan which this administration has put in place. We have the city centre project. It has not started but some private investors have been coming around.
Is there any indication that the bond will be approved?
Yes, there are, because the House has not said it will not approve the bond. It is only talking of the details and we will still continue to discuss.
The House wants the debt profile of the state. This has not been provided.
It is being done. Even, we addressed a press conference and we told you the total debt profile of Ogun State. So, if we told you, the press, why are we not going to tell the House because even the appropriation bill had all of that and in the review that we did on the 2009 budget you also saw all of these things there because all of these details were provided.
Immediately the budget was passed you made a statement that the people of the state should prepare for a tight fiscal regime.
No, that was said in the context of the larger economy of the country because the truth of the matter is that the monthly allocation continues to reduce except for last month when the Excess Crude Fund was shared and that has been depleted. And unfortunately for us in Ogun State, we had some challenges in IGR, not of our own failure but the general state of infrastructure. When the PHCN is not working well, the industries are not working optimally. This makes it difficult for us to collect taxes and other levies.