States and empty treasuries, By Dr. Amanze Obi

Posted by News Express | 22 October 2015 | 3,792 times

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Just as we pointed out last week in this column that state governors are demanding bailout funds as of right rather than find creative and enduring solutions to their parlous financial status, some of the governors, for­mer or serving, under whose tenure the issue of empty treasuries in the states got exacerbated, are not embar­rassed to tell us how ineffective they were in the finan­cial administration of their states.

What readily comes to mind here is the recent de­fence put up by Gabriel Suswam, the former governor of Benue State, on the state of finances of many states of the federation. Suswam, as if in reaction to the points raised here last week, had sought justifications for the messy financial state of the states, a situation which has led to the mad rush for bailout funds. The former gov­ernor had argued in a recent media report that most ex-governors like him left empty treasuries because they depended on only one source of revenue – the federation account. According to Suswam, there is no way any state of the federation that relies heavily on the money from the federation account can have savings. His ar­gument was that once salaries are paid, and projects (where funds permit) are executed, there is usually no money left for savings. This, he said, explains the new phenomenon called empty treasuries across the states.

Suswam used his own situation as an example. He said he met an empty treasury when he came into office in 2007. Significantly, but sadly, he also left an empty treasury after eight years in the saddle.

I pity Suswam on this score. By the time he was leaving office, he had four months of salary arrears to contend with. He could not pay because there was no money with which to do so. Today, his successor, Samuel Ortom, is up in arms against him. Ortom has vowed that he must probe the Suswam administration over alleged mismanagement of the resources of Benue State. The governor has already put together a probe committee for this purpose.

Suswam, to be fair, may have had his challenges in the governance of Benue State. But he slipped into an error which, unfortunately, is the bane of most govern­ments across the states. Suswam had argued in his sub­mission that it was only one or two or three states of the federation that are metropolitan in outlook that can boast of other sources of revenue. Otherwise, the only source, he held, remains the allocation from the federa­tion account. That is Suswam’s logic. He also explained away why he could not diversify the revenue source of the state. But we know that excuses will not do, espe­cially in a country like ours where we have, over the years, been voicing our worry about our mono-product economy. However, it looks like the whole thing is fast becoming a mere precept. We merely talk about it. We do not appear prepared to take the bold step towards diversification. Suswam must have been a victim of our collective inaction.

But then, he was still wrong when he posited that only metropolitan states like Lagos can make money outside the revenue allocation from the centre. Perhaps, someone needs to remind Suswam that there are ex-governors like him that did not leave empty treasur­ies, in spite of the largely rural nature of their states. In Anambra State, for instance, Peter Obi, who left office just last year, left some N75 billion in the state’s coffers. Yet, a lot of life-changing projects in the state can be traced to the Peter Obi administration, contrary to Sus­wam’s claim that any ex-governor that left any money behind did not embark on any development project. Peter Obi applied a business model in the administra­tion of Anambra State during his tenure. He was not merely collecting allocations and spending them freely without planning in the hope that another month would have its own share of revenue allocation. He did not just embark on development projects, he also invested the state’s resources wisely. Today, Obi’s successor, Wil­lie Obiano, is the happier for it. Only a few weeks ago, Obiano publicly acknowledged the good job Obi did in Anambra. Obiano said he was happy that Obi laid a solid foundation upon which he, Obiano, is standing. Because Obi left good money in the coffers of Anam­bra state, Anambra has no need for bailout funds. And, Obiano, accordingly, did not apply for one.

To further illustrate the fact that states are not all about empty treasuries as Suswam would have us be­lieve, we can take the Benue ex-governor back in time and remind him that seven years ago when he said that he met an empty treasury in Benue State, Attahiru Bafarawa as governor of Sokoto State left N12 billion in the state’s treasury as he was leaving office then. Bafarawa left this huge amount of money regardless of the many development projects he executed in the state. It is on record, and it is to his eternal credit, that Bafarawa constructed over 1000 Kilometres of roads in the state during his tenure, a feat that earned him the accolade of “road master” from the then president, Olusegun Obasanjo.

Perhaps, the difference between Bafarawa and Obi in this matter is that whereas Obi’s successor is building on the good foundation laid for him, Bafarawa’s suc­cessor, Aliyu Wamakko, for political reasons, refused to acknowledge Bafarawa’s good works. Wamakko operated as if there was no yesterday. The result is that eight years after Wamakko, Sokoto is in the throes of a debt overhang. The new governor, Aminu Waziri Tam­buwal, has been too scared to let the cat out of the bag. That is how bad the situation in Sokoto is.

Rather than run from pillar to post in search of jus­tifications for empty treasuries in many states of the federation as Suswam is doing, I recommend the Pe­ter Obi model to some of the new governors who may not know how to grapple with the financial situation in their states. They will benefit immensely from it, espe­cially now that they are queuing for bailout funds.

This leads us to an aspect of the bailout rush that we are not talking about. The bailout fund, as we all know, and have noted in our earlier interjections on this matter, is a loan which the concerned states must repay with a nine per cent interest over a period of 20 years. This being the case, no governor of any state is sup­posed to borrow any such money without the approval and concurrence of the state House of Assembly. That is what the law says. But it is obvious from what we are seeing that state governors are acting unilaterally in this matter. I do not know of any state governor that has approached the legislature in the state to seek approval for the loan. What this means is that the governors are acting illegally. They need to be called to order before this illegality becomes the norm.

As if this brazen illegality is not enough, some states like Imo whose governors did not handover to anybody are enjoying the best of all possible worlds. Governor Rochas Okorocha is borrowing the highest amount of N26 billion. The people do not know why. They also do not know the level of insolvency of the state. They do not even know why the state should be insolvent at all. Nobody is telling them anything. It is double tragic that Imo people are groping in the dark in this all important issue.

•This piece by Dr. Amanze Obi originally appeared in his column BROKEN TONGUES in today’s edition of Daily Sun. Amanze Obi can be reached via

Source: News Express

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