Friday, 26 June 2015

I inherited N636bn debt – Okowa


ASABA—DELTA State governor, Dr Ifeanyi Okowa, yesterday, decried the financial position of the state and disclosed that the government had over N636 billion debt, including contractual obligations, to contend with in the next three years.

Addressing the state legislature, Okowa said: “A total monthly deduction of N4.60 billion will be made from our FAAC receipts with effect from this June through to March 2017, and thereafter N1.098 billion monthly until September 2018.

sponsored post

‘’This leaves us with a balance of N3.4 billion assuming the FAAC allocation stays at N8.03 billion.

“The receipt from Internally Generated Revenue, IGR, is about N2.0 billion monthly, after deducting cost of collection.

“The implication of the above scenario is that the funds available to run the state is N5.40 billion monthly in the next two years, except there is a significant rise in oil receipts and therefore FAAC earnings, as well as our IGR.

“Unfortunately, the available fund of N5.40 billion is insufficient to offset our monthly wage bill, let alone fund overhead costs or for government to embark on capital projects. The state workforce as at May 28, 2015 stood at over 60,000 persons with a monthly personnel cost of N7,437,940,015.38 inclusive of the N678m state government’s support to local government councils for the payment of primary school teachers’ salaries.”

The governor lamented that the 2015 budget of N409 billion as passed by the legislature, was no longer realistic in the wake of current realities which clearly showed that their expected revenue was now far below what was projected.

While calling for a review of the budget, Okowa said: “It is obvious from available statistics that the state will run a monthly deficit of about N2 billion, and would need to borrow to pay salaries of its workers and finance the running cost of government.

“Prior to my assumption of office, the state government had been hard put to pay workers’ salaries. Ministries, Departments and Agencies of government have been running at half steam due to the inability of the state to provide money for their operations.

‘’The staff of most local governments in the state have been on strike due to non-payment of salaries.”
Continuing, the governor, who was accompanied by his deputy, Mr Kingsley Otuaro, SSG, Mr. Festus Agas and the State Head of Service, Mr

Patrick Origho, said further: “This is the dilemma that we face as we strive to deliver on our campaign promise of prosperity for all Deltans.
‘’I have gone into this much detail regarding the state of our finances to put the legislature on the same page with the executive, so that we can think together, plan together and tighten our belts going forward.

“We must muster the resolve and political will to boldly and decisively confront the challenges that we face, right the ship of our state and lay a solid foundation of prosperity both now and for future generation of Deltans.

‘’It won’t be easy. It is not supposed to be easy. But there is no gain without pain, no prize without a price.

“A good place to start is for us to reject the old ways of doing business. First, beginning with me and this honourable House, we must be ready to make the necessary sacrifices to reduce the cost of governance.
‘’Secondly, the endless turf battles and approach to legislative action would need to give way to civility and respect for each arm of government.

Thirdly, the House must make laws that protect and promote the interest of the state and our people.
‘’Fourthly, we must act with the sense of urgency that our current situation demands, and navigate the ship of state aright.

“I have already directed the Ministry of Finance and the Accountant-General to restructure the Irrevocable Standing Payment Orders, ISPOs, on contractors’ guarantee and overdraft facility over a period of 42 months as a first step to reduce our monthly exposure.

“We are frantically working at putting the necessary machinery in place to boost our IGR, and steps will be urgently taken to plug the loopholes in our revenue collection process. In our land resource management, action will be taken to re-certify Certificates of Occupancy (C of O) beginning with our urban settlements, while MDAs will be made more accountable in the generation of revenue.”

Drop your comment || Send us your Article, Stories/Video of rare events to: info @