Cleaning The Mess In The Finances Of Imo State Is A Must Task Before The Incoming Govt. Of Emeka Ihedioha …Intersociety
(Chima Ubani Center, Onitsha Nigeria: 27th March 2019)-It is a settled opinion in several informed quarters that the finances of the outgoing Government of Imo State are deeply in a mess. It is also a settled opinion in same quarters that the mess in the finances of the State is a major threat to the incoming Administration of Mr. Emeka Ihedioha and that unless the mess is holistically addressed and cleaned; otherwise the incoming Administration will end up not satisfying the high expectations of the People of Imo State. To do this, at least, the first three months of the incoming Administration must be spent on holistic investigation and verification of the finances of the State.
The hallmark of any popular new democratic Administration is stocktaking or formal enquiries into the state of finance of out-gone/former Administrations so as to truly ascertain the financial conditions handed over or left behind and how best to address the hiccups to avoid caging or bottling its development plans for the State or governing area and its People.
It is not enough to obtain input legitimacy by winning election and rolling out drums in celebration. Rather, it is more fulfilling and record breaking when the electioneering expectations of the people are fully met through the combination of input and output legitimacies. The former is achieved by winning an election though popular and credible means while the latter is achieved by recording development successes or achievements while in office.
Using Anambra State as a study example, stocktaking or investigation into the state of its finance or fiscal governance and handover was applied in 2006 by the then new Administration of Peter Obi. This was immediately after the court-declared interloper Government of Dr. Chris Ngige was judicially ousted on 15th March 2006.
The corroborative findings from the ordered investigation disclosed that “N9b cash was left in the coffers of the State with N13.5B unpaid debts owed contractors for projects mainly roads; some of which already completed and many ongoing”. It was further found that “the State had total borrowed debts comprising foreign and local borrowings of over N40B mainly borrowed under Mbadinuju Administration (29th May 1999-29th May 2003)”.
There were also “tens of billions of naira worth of unpaid salaries, pensions, gratuities and other allowances belonging to the State and Local Government active and retired workforce including serving and retired personnel of various parastatals in the State dating back to 1992”. Also investigated was the state of “contracts especially roads awarded, their costs and those in zero or quarter or half completion as well as abandoned projects; likewise quality of works done on the completed and ongoing projects as well as circumstances of the contracts awarded or criteria for award of the contracts”, etc.
The Obi Administration also ended on 17th March 2014 with self and independent stocktaking, covering “projects done and completed and the newly awarded contracts including those in quarter, half and final stages of completion”. Others were “monies left for the State including cash and stocks in naira and foreign currencies; investments procured, inherited arrears of the pensioners and workers of the State and LGAs, most of which paid or liquidated as at the terminal date of the Administration in 2014 and the amount of borrowed local and foreign debts owed by the State as at 17th March 2014”, etc.
Intersociety had found then through officially and independently verified sources that “over N35B was spent in liquidation of the arrears of the State and its 21 LGAs’ retired and active workforce including those inherited and owed from 1992; with the exception being those owed retired and serving personnel of some State parastatals including Anambra State Broadcasting Service (ABS), Anambra State Water Corporation and the State owned National Light Newspaper”.
In the case of Anambra State Water Corporation, “the N1.8B left by the Obi Administration in a first generation commercial bank was judicially ordered to be transferred to its workers as a result of a Garnishee Order” arising from protracted industrial dispute between the workers of the State Water Corporation and the Obi Govt.”
Instructively, through the policy of “get paid according to kilometers of road or phase of work completed”, no contractor in Anambra State under Obi was owed a dime for job duly completed; except unpaid contract sums for phases of work yet to be completed or certified “completed” by the supervising ministries.
Intersociety also found that out of over N40B inherited debts, majorly incurred during the Mbadinuju Administration, “the Obi Government liquidated its substantial portion and left it at N11.7B as total borrowed local and foreign debts as at 17th March 2014”. With this, it is now a simple arithmetic to easily ascertain what the present Obiano Administration had incurred as “total borrowed debts of Anambra State (local and foreign)” when his Administration must have ended a day after 17th March 2022. This can be done by deducting the total debts from the N11.7B debts inherited or left behind on 17thMarch 2014.
Therefore, assuming the Governor-Elect of Imo State, Mr. Emeka Ihedioha truly wishes to govern the People of Imo State purposefully and constructively, his Administration must start with holistic investigation and cleaning of the mess in the finances of Imo State. Going by several advocacy investigations carried out by Intersociety in recent times on the state of the finances of the States in the Southeast Nigeria, the past and outgoing Governments of Imo State have consecutively run huge budget deficits over the years. This is despite several “external funds interventions” such as “Paris Club refunds”, “Federal Government credit or soft loan facilities” and “international financial/development assistance”.
This is more so when Government borrowings are easily determined by the amount of its annual deficit budgets or a situation where such Government’s projected annual IGR, Federal allocations, cornered LGA allocations and zero borrowings or financial assistance are doubly overtaken by its projected annual budget (recurrent: overheads and personnel costs and capital budget).
For instance, if a Government such as the outgoing Government of Imo State budgets, say, N150b as its total annual budget, out of which N90B is expected from IGR, Federal allocations, cornered LGA allocations and other zero borrowings or financial assistance; it simply means that the same Government will unstoppably borrow N60B elsewhere to fund the budget deficits; especially when there is no supplementary budget for cutting down the mother budget and its huge deficits.
Consequently, the incoming Administration of Emeka Ihedioha in Imo State must do the following:
1. Set up a Verification Panel of Auditors to investigate and verify the mess in the finances of the outgoing Government of Imo State so as to:
b. ascertain the true state of finance of the State
c. what is left in the State coffers (if any)
d. total amount of unpaid arrears of salaries and other remunerations belonging to serving workforce of the Government of Imo State and those in its 27 Local Government Areas between 29th May 2011 and 29th May 2019 and those owed by previous Administrations in the State before 29th May 2011.
e. total amount of unpaid pensions, gratuities and other retirement benefits belonging to retired workforce of the Government of Imo State and its 27 Local Government Areas between 29thMay 2011 and 29th May 2019 and those owed by previous Administrations in the State before 29th May 2011.
f. total amount of unpaid judgment debts by the outgoing Government of Imo State, dates of their obtainment and parties and persons owning them.
g. total amount of unpaid contract debts by the outgoing Government of Imo State for contracts already completed and commissioned (if any)
h. total amount of unpaid contract debts in the State for uncompleted projects including roads (if any) and their various stages of completion as well as terms or circumstances of award of the contracts
i. total amount of foreign loans or unpaid debts borrowed externally by the outgoing State Govt., between 29thMay 2011 and 29th May 2019 and those borrowed by the previous Administrations in the State before 29th May 2011
j. total amount of local loans or unpaid local debts borrowed from commercial banks by the outgoing Government of the State between 29th May 2011 and 29th May 2019 and those borrowed by the previous Administrations in the State before 29thMay 2011
k. illegal seizure or acquisition of Government lands or properties (if any) within the State or beyond by outgoing top elected and appointed officials in the State for personal use or criminal acquisition between 29th May 2011 and 29th May 2019.
l. illegal or unlawful withdrawals from the State coffers, other than for defraying statutory and legitimate monthly wage bills including payment of workers’ salaries, overheads and pensions; or for payment of duly certified completed public contracts or projects
l. holistic investigation into all local borrowings between 29th May 2011 and 29th May 2019 other than foreign borrowings; authentication of names and addresses of the lenders, purposes for obtaining the loans, their uses, agreed percentage interests and default penalties; repayments already done and specific and general terms or conditions for repayment of such loans or debts.
m. Blacklisting including court actions against the lenders of loans found to have been fraudulently obtained in law, through investigation under demand; by the outgoing Government of Imo State particularly those that fall outside loan lending laws of Nigeria and those possibly obtained between 12th March 2019 and 29th May 2019 or those obtained within the period but got backdated to evade traces and culpability.
n. Cancellation of such loans found to have been fraudulently obtained under paragraph “m” (if any) and abrogation of their repayment or servicing obligations and agreements with the Government of Imo State.
o. Publication and wide media circulation including advertorials, of the abridged findings of the Verification Panel of Auditors for specific and general public knowledge by the People of Imo State, Nigerians and members of the international community.
For: For: Int’l Society for Civil Liberties & the Rule of Law (Intersociety)
Emeka Umeagbalasi, Chair
Mobile/WhatsApp Line: +2348174090052
Email: [email protected]
Chinwe Umeche, Esq.
Head, Democracy & Good Governance Program
Email: [email protected]
Chidinma Udegbunam, Esq.
Head, Campaign & Publicity Department
Email: [email protected]