I am constrained to react to various comments credited to Gov. T.A. Orji in the media on the financial crisis rocking Abia state especially claims of inheritance of debts from his predecessor in office.
I am constrained to react to various comments credited to Gov. T.A. Orji in the media on the financial crisis rocking Abia state especially claims of inheritance of debts from his predecessor in office.
I happened to have had the privilege and honor of serving Gov. T.A. Orji as his first commissioner for finance and economic planning for about 12 months before moving to the education ministry.
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Obviously there is need to set the records straight as a professional who played a major role in the management of the state's finances both as Banker to the state government for about 6 years and as commissioner for finance and economic planning.
Between 1999 and May 29, 2007, the state government maintained its major accounts with the defunct Hallmark bank plc and later Bank PHB after the banking consolidation exercise concluded December 31, 2005 as well as one and only loan account of N2billion (two billion naira) taken from GTBank for the payment of major contractors during the tenure of Dr Orji Uzor Kalu.
The Abia state government paid off all its outstanding overdraft by netting same off with credit balances in some state parastatals' accounts, notably that of ASUBEB and moved to Bank PHB on a clean slate.
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At the time Gov. T.A. Orji took office, the overdrawn position of about N1.7bn (one billion seven hundred million naira) with Bank PHB had been cleared on receipt of the statutory allocation of the state. The existing overdraft was renewed to enable government avoid financing gap and pay salaries, pensions, subventions, security vote and sundries, thus creating fresh overdraft at the inception of the administration. The N2bn (two billion naira) loan from GTbank was also completely liquidated as it was processed to terminate with the administration that contracted it.
Apart from the outstanding foreign loans which pre-date the Orji Uzor Kalu administration and for which deductions continued unabated from statutory allocations as well as excess crude proceeds due to the state to refund surplus states whose resources were used by the federal government to obtain debt relief and exit Paris and London club creditors. The records are available at Debt Management Offices Abuja and Debt management unit of Abia state ministry of Finance and Economic planning.DMO officials from Abuja even made a presentation of Abia state's external debt profile complete with history, dates, projects and servicing information at my invitation as state’s commissioner for finance and economic planning.
It is true that as a new administration, there was need for funds for the state Governor to make impact and deliver dividends of democracy to the people but he was rather impatient and exerted so much pressure against my professional advice to embark on short term borrowings that led to the current financial crisis facing the state. what the state needed was longer term funds and the only source was through the then emerging bond market. We were working with the Debt management office, Abuja and were getting technical input/assistance from them. Before we could make any meaningful progress(following due process)the Governor had authorized short term borrowings from local banks and within six months our local debt portfolio had hit N11.8bn(eleven billion, eight hundred million naira).I raised alarm and discouraged further borrowings at every available opportunity as the impact of servicing these debts , over reliance on statutory allocation , monumental revenue leakages and huge running expenses made payment of salaries and subventions a protracted struggle. These naturally led to my face off with the Governor and by the time I resigned from government on 19th of January, 2009, the state was owing various local banks over N18bn(eighteen billion naira).The rest is history.
Records are available and the veracity of some of the governor's claims of inheritance of debts and payments to perceived political godfathers are verifiable in the public domain using appropriate financial surveillance agencies of government who are empowered by law to have unrestricted access to financial records of every strata of government. The truth is incontrovertible no matter how hard we try. I decided to put these facts on record, so that it becomes easy to know who is fooling who.
Because of my role as a member of the Abia state executive council then, I could not but explain and put records in the right perspective.
"A lie gets halfway around the world before the truth has a chance to get its pants on. "Sir Winston S Churchill.
This piece is contributed by Hon. Richard C Harrison, FCA, FCIB, MBA
Richard. C. Harrison
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