Dissecting The N75 Billion Handover Brouhaha In Anambra
To some people, the social media today is a thriving platform for a flourishing trade in inanity. Ironically, the platform is easily where a fair number of unreflective people is effectively held captive with enthralling junks, which explains why the talk of a N75 billion cash in hand-over has become a worrisome matter in the minds of Anambra people despite Governor Obiano’s excellent 18 months in office. Obviously frustrated by the silence of Government, I was told that the merchants of the N75 billion tale devilishly went underground, seeking the false enticement of respectable affinity groups through the Bishops and Traditional Rulers. I heard that the hand that bears the beguiling papers is the hand of Esau; but the voice in the social media is Jacob’s.
To disabuse the minds of the citizens who the Governor ordinarily holds dear, the Principal Officers of the state, led by the Secretary to the State Government, Professor Solo Chukwulobelu addressed the press Saturday, November 14, 2015 at the Conference Hall of his office at the Government House Complex in Awka. In somewhat pedagogic deliberateness, the SSG went through a six-page verbatim extract from ex-Governor Peter Obi’s Handover Note.
At the end of the press conference, the items that made up the N75 billion were laid bare. The headline item was a N9 billion involuntary investment charged on Anambra State from the Federation Account to fund Nigeria’s Independent Power Projects. This is a non-tradeable equity in a long-term investment. The subsequent 12 items on the extract are similar long-term investments, each in differing level of completion like the state’s equity investments in Orient Petroleum Resources; investments in Onitsha and Agulu Lake Hotels as well as in the three Shopping Malls in Awka, Onitsha and Nnewi; the State’s equity investment in Intafact Beverages Limited, the brewers of Hero Lager and investments in the two Onitsha Business Parks. The last item in the row of long-term investments is a N750 million Anambra State’s share in the old Eastern Nigeria’s First Republic investment in Emenite Limited, a manufacturer of fibre cement roofing and ceiling products. In all, the long-term, non-earning assets in the fairy N75 billion sums to N22.73 billion or 30 per cent. It is analytic to reason that seven out of the 13 long-term assets are uncompleted yet; they therefore cannot begin to earn cash until they are completed, off-taken, let or attain critical mass as should in the case of Orient Petroleum.
Included also is a N350 million investment in quoted stocks. This, no question, is tradeable, which means that the investment can be sold and realised into cash. The stock is worth currently about N200 million following falls in the value of shares. The number 15 item on the Hand-over extract is a N1.5 billion computation of the state’s share of the Excess Crude Account contributed as capital to the Nigerian Sovereign Investment Fund in 2010. At best, this can be regarded as a State Reserve Fund, a kind of saving for the rainy day. It is not realiaable yet into cash. Items 16 to 19 in the Hand-over extract, amounting to N2.48 billion are the state’s counterpart funds or contributions to Funds held by federal financial institutions. These institutions administer the contributions as soft lending for small-scale businesses, agriculture and small industries in the State. Having been contributed, the cash is not available to the state any more. For reason that will be obvious shortly, let me skip item 20 and treat item number 21 which is a N10 billion spent by the state on federal roads across the state and had been verified for refund by the Federal Government as at Hand-over date. In fact, the verified figure has risen to N25 billion on Governor Obiano’s efforts. It is pertinent to state that this is pure and plain IOU by the Federal Government, which can be cash only when it is refunded.
The nearest to cash in the foregoing is item 20, which is a USD155 million investment in Eurobond and other foreign currency-denominated securities made by the previous administration at its twilight. In naira terms, this was worth N26.5 billion at handover. The Press Conference came out informed that this is intact in the three managing banks and unliquidated. In simple language, Governor Obiano’s administration has not touched one dollar of it.
Item 22 is a statement of real cash handed over. By the Hand-over Note, cash at bank as at December 31, 2013 was N11 billion.
Three months after, precisely on hand-over on March 17, 2014, the cash had dwindled to just about N9 billion.
The foregoing has been items on the asset side of the Hand-over Note. Now follow me over to the liability side. Total contract sum for all projects inherited from Peter Obi is in the amount of N185 billion. In keeping faith with the promise of continuity, completion, commission and commencement, Governor Obiano has silently been paying down the inherited contracts strictly from Federal transfers received in the period of his administration. Someone whispered to me at the Conference that by sticking to his own earnings, Governor Obiano has acted as though led by a premonition that a N75 billion sing-song would soon be in the offing. Thus, from March 2014 through August 2015, a total of N69.2 billion has been received as federal transfer, out of which N35 billion has been utilised in whittling down the inherited liability, unannounced. The chorus in the N75 billion folklore may as well be to keep the grave silence of the huge liability ever silent.
Nwokoye Principal Secretary to the Governor
No Comments yet