Wednesday, January 30, 2013

13.3 BOND PROCEED: A SERIOUS MATTERS ARISING


Early morning of Sunday January 27, 2013 in a broadcast on Orient F.M Imo State broadcasting corporation, the Commissioner for Finance stated that they have obtained a variance or change of purpose for the proceeds of the bond money from the Securities and Exchange Commission. He informed Imo people that the Securities and Exchange Commission has granted Okorocha’s government the authority to apply this bond proceeds into the construction of 305 school blocks in the 305 INEC wards of the
state, and the twenty seven (27) new hospitals under construction in the 27 local governments of the State.
The question raised by this broadcast is: Whether there was an amendment to the Imo State bond law which was the authority for the bond?
It is pertinent here to avert our minds back to the acquisition of the Bond. First, Imo State House of Assembly at the time passed a bond Law upon which the bond was issued by SEC. Has that bond law been amended?
I raise this question, because of the nature of bond. A bond is not necessarily a loan that is why the interest rate is considerably lower than commercial bank loans. In passing the bond law, the uses of the proceeds must have been detailed in the law. In order to grant a variance therefore, one must suspect that there should be an amendment to the law in other to meet the state law requirements.
In the entire discussion of this variance by SEC, we all tend to forget that the primary purpose of approaching the Capital market by the Ohakim’s administration was the Wonder lake project.
The wonder lake project, a development vision in the Niger delta area of Imo state, by Governor Ohakim for over 15 years – starting from when he was a commissioner for Commerce and Industry in 1992 under the Evan Enwerem administration, came to fruition; it seems by the approval of the development bond. It was on the bases of the wonder lake project and the approval of this bond for its construction that the same Ikedi Ohakim appealed to the then president for the requisite adequate Security and other Federal presence in the general area of the wonder lake project.
Based on Governor Ikedi Ohakim’s appeal to the presidency, naval base was attracted to Oguta under Yaradua’s regime. But now, that the wonder lake project was jettisoned by the Okorocha’ administration, the Naval base has been relocated to Ondo State. It is as a result of this wonder lake project that the Federal Government agreed to have stationed around the Oguta lake a Marine police outfit to complement the Naval base in provision of the needed Security in the Area.
It was due to the Wonder lake project that the mini port was attracted to Oguta. But with the change of purpose for the bond proceeds, all these Federal presence in Imo state has become history with the exception of the mini –port.
Yes, it is true that every administration has its vision, but should the vision of an administration trump the development of the state? Wonder lake was projected to create over 20,000 jobs and spin-off another ten thousand (10,000) job in the Niger delta zone of Imo state. But these jobs and the aborted Federal presence have become the opportunity cost of the diversion of this bond proceeds.
It is therefore pertinent that all well meaning Imo people must demand the enabling authority for the petition for variance to SEC by Okorocha’s administration. Since the authority for the bond was by Imo state law, the Okorocha’s government must show an Amendment to the law or some type of a resolution from the house empowering it to apply for the Variance, otherwise, our laws means absolutely nothing.
This Imo House of Assembly, in my knowledge has passed no such amendment to the original bond law. Was this responsible for EFCC’s snooping activities in the Imo House of Assembly last week?
In this case, the broadcast on Orient FM by the Honourable Commissioner for Finance with regards to the claimed handing over of 13.3 billion naira bond money to this administration, It must be recalled that it took months for this administration to acknowledge that Ohakim left such huge sum of money.
The interesting thing about the revelation by the Honourable Commissioner for Finance was in the projects for which the bond proceeds allegedly were spent.
It is important here to recall the official statement regarding the leasing of Adapalm to Roche at N3.5billion. The official statement was that Roche will use the N3.5 billion to build the same school blocks in the same 305 INEC wards of the State. Additionally, Ohakim left N3 billion in SUBEB account that has also evaporated. The official information is that the N3 billion of SUBEB money left by the Ohakim’s administration was applied in the payment of Owerri Township School, built by Roche
The question then is; what percentage of the bond proceeds was applied in the school block projects? And what percentage of the Adapalm lease proceeds were applied to the same school block projects?
When you add, the N3 billion proceeds from the Adapalm lease, to the N13.5 billion bond proceeds, plus the N3 billion SUBEB money left by Ohakim, you will have N19.5 billion. If N19.5 billion has already been spent on school blocks in 305 INEC wards, why is there less than five school in entire state completed?
With regards to the on-going hospitals in the 27 Local Governments the matter gets curiouser. We all remember that the state hospital were said to have been leased or sold to a Muslim hospital management company from Abuja. But the sectarian concern of Imo public who are Christians regarding leaving their health delivery industry to a Muslim outfit drowned the issue of the amount Imo realized from the deal. How much did the Muslim outfit pay for the deal? What percentage of the amount realized from this deal was committed to the building of the new hospitals? I ask this question because the construction of these hospitals stopped over six to eight (6 – 8) months ago and each of the hospital construction site looks like an abandoned project.
We must endeavour to believe any official information coming from our Government. That is a mark of a good citizen. But when the official information is contradictory and muddled, it is also the mark of a good citizen to ask pointed questions.
We have been told that Addapalm lease proceeds was to be applied to building of 305 school blocks in the 305 INEC wards of the state and we believed. As a result this proceeds were never captured in the appropriation bill of 2012. We are now being told that the 13.5 billion naira bond proceeds left by the Ohakim’s administration is being used for the exact same construction of school blocks and the same bond proceeds did not show up in the appropriation bill of 2012 or 2013, Haba.
Furthermore, we were told that a professional Hospital Management outfit has leased the state hospitals but we do not know the amount of this contractual agreement. Upon entering into the sale or lease of the state hospitals, we immediately embarked on building new ones. Now we are expected to believe that the construction of these new hospitals are being done partially with the proceeds of bond money acquired based on a law detailing the infrastructural usage of its proceeds.
If the recent information coming from the Commissioner of Finance is the case, then the credit for the on-going 27 hospitals in the 27 local governments, and the 305 school blocks in the 305 INEC wards of the state should go to ex-Governor Ikedi Ohakim and not Okorocha’s administration. It was Governor Ikedi Ohakim who led his administration to the capital market to make these funds available. It is by the leadership of Governor Ikedi Ohakim that an executive bill was sent to the house and passed hence Imo State bond law was born. Without the leadership of Governor Ikedi Ohakim there would not have been a bond law and no bond proceeds to make the construction of the hospitals and school blocks, possible.
Many states apply for bond in Nigeria, but because of the stringent requirements just a few are approved. This is why most state governments rely on very high interest loans which are never advisable for infrastructural development.
The Okorocha’s government has taking many loans and overburdened Imo state with loans today, that three banks refused to grant her just five billion loan over the Christmas period. The controversy in the state today which is partially responsible for the incessant trips of EFCC to the state is the N47 billion loan from Zenith bank secured with local government allocations.
No discernable infrastructural development was achieved by this government with this huge sum. But the interest payment has so overburdened the state that no bank grants her a five billion naira loan last December.
Finally, the Honourable Commissioner stated in the IBC Broadcast that Imo government had obtained a variance on the bond proceeds from SEC. But the Commissioner did not say when the variance was granted. Was the variance granted before or after the bond proceeds were spent? It is being alleged that the bond proceeds had been spent and that UBA account of the Imo bond proceeds shows that there is no longer any money in the account. If the bond proceeds have been spent before the change of purpose granted by SEC is that a crime. SEC is supposed to monitor because she must protect her subscribers to the bond.
The important question that should have been answered by the Hon Commissioner for Finance is whether the grant of change of purpose was based on the first application or on appeal? This question is important in light of the fact that it is alleged that the entire bond money had been used. The issue of when the money was used is important to understanding the financial responsibility of this administration.
The final question invariably becomes, was the concerted effort by the administration to shield the fact that Ohakim left 13.5 billion naira bond money to deny Ohakim the credit for its usage in building the 305 school blocks and 27 hospitals, or because of the alleged misuse of its proceeds. Whatever the answer to this question is, this administration has built a tangled web around the proceeds of this bond to deceive Imo public and it is coming back to hunt the administration.
Imo must be better, but she can only be better when we return her back to the hands of God.
BY
DR. KELECHUKWU C. OKPALAEKE