By Omodele Adigun
As many Nigerians continue to frown at the borrowings at the national level, mallam Muhammad Gambo Magaji, Commissioner for Finance & Economic Development, Gombe State, says borrowing shouldn’t be the problem but utilisation of the proceeds of borrowing should be citizens’ interest.
According to him, “if you are able to borrow any amount, and the people benefit in terms of infrastructure; projects; uplift of their livelihood, then the reason for that borrowing has been met. But any time you borrow funds, and you don’t see these elements, then it means that there is a disconnect. That is where the problem is.”
At a recent interface in Gombe, Gombe State, Magaji explained what the government is doing with the bank loans, counterpart funds and proceeds of its bonds to move the state forward in spite of strident opposition from the naysayers.
Excerpts:
Liabilities
As you are aware, this administration came on board almost two and half years ago, precisely on May 29, 2019. We came into office and inherited huge liabilities.Of course, you know, government is in a continuum. We are not blaming anyone but we are only bringing to fore information that we received on assumption of office.
We inherited N124 billion liabilities which included contractors’ arrears, pension and gratuities arrears, bank loans and bonds. Cumulatively, this government inherited almost N900 million monthly on loan repayments.
The truth of the matter is that, if you. But that did not stop us from ensuring that we continue to move forward. The first thing we did was to ensure that salaries and pensions are paid monthly.
Borrowing
At the moment, what we have borrowed as government, outstanding for the Mohammed Yahaya administration is N20.5 billion.All these will be paid within the first tenure of this administration, except for one facility which we inherited and concluded. That was the third bond, and we will run it into the second term of this administration.
You must have read the news that Gombe State should not borrow, that we should not be allowed to borrow. Governance can not move without money; projects can not be delivered without money. And borrowing is not the problem but utilization of the proceeds that you borrow. Now if you are able to borrow any amount, and the people benefit from what you have borrowed in terms of infrastructure; in terms of projects; in terms of uplift of their livelihood, then the reason for that borrowing has been met. But any time you borrow funds, and you don’t see these, then it means that there is a disconnect. That is where the problem is. And that is why we are not happy with what we have inherited.
We inherited Federal Government loans; facilities and the bailouts. You know that the bailouts granted to the state and local governments during the last administration was N11 billion, we inherited it; we inherited the Federal Government infrastructure facility of N10billion; we also inherited the N17 billion that was given to states as reliefs. Now all of these were collected by the past administration. The salary bailout, which was supposed to be utilized to pay all outstanding salaries and gratuities was utilized by the past administration, But we inherited N24 billion of unpaid gratuities and pensions. This dates back to 2014, which means that that money came into the system for that purpose and was not utilised for that purpose, If it was utilized for that purpose, we wont have had liabilities of pensions dating back to 2014.We are now in 2021 and we are still grappling with that. Happily, the governor has paid over N2.5 billion of gratuity arrears we inherited. And he is poised to pay additional N750million before the end of this year. So these are the things we have looked at and we are not happy about them.
But then, you also had some bonds: thre was a N25billion bonds; N20 billion and N5 billion, which we are still paying for. cent completion. So these are the issues: loans collected, projected not completed and we are paying for them. And now the same group of people are asking why do we need to take loans. The question is do we still need infrastructure? Yes we do! Do we need to complete their projects that have been abandoned? Yes we have to, otherwise, we will leave these infrastructure to decay! And what will happen is that the loss is for in Gombe. You have taken loans of N20 billion;N30 billion to do those projects. You have not completed them.If we allow them to waste, it means that those N20 billion, N30billion gone down the drain. And, of course, no responsible government will allow that. So that is whr we felt there was need for us to take a bond. That is why you are hearing about the N35billion you are hearing about.
Industrial park
Aside that, we have the Muhammadu Buhari Park, it is an industrial park; it is a 1000 hectare park which this government is passionate about. The main reason this government is passionate about this park is because we feel that would provide employment for our youths.Gombe State is 60-65 per cent youths.Then how do we engage them if we don’t have industries; if we don’t have work for them?And of course, we want to expand our tax base.How do you expand your tax base? You need businesses to thrive; you need to bring in new businesses. That is why we need the industrial park
Turnaround
And what we discovered at the inception of the administration was that the state government was able to pay salaries but the local governments were not able to pay their workers’ salaries until they borrowed N1.3 billion monthly to pay. But with the focus and tenacity of the governor, by the fourth month of the administration, we were able to stop borrowing that N1.3 billion to pay local governments’ salaries and pension. So, it means that the local governments are now able to pay salaries on their own without borrowing from the banks.
Now two years down the line, the local governments in Gombe State now pay their salaries without borrowing. And they have credit balance of over N5billion.That is to say they have financial turnaround and they are able to undertake projects on their own.
IGR
As you are all aware, last year, Gombe State recorded the highest ever internally generated revenues in history. And we are poised to move our IGR to a new level that will ensure that Gombe State becomes independent economically. What I mean is that, we should be able to pay our salaries and do recurrent expenditurewith our IGRs. That is the dream of the governor at the moment , and that is the mandate he has given us to ensure that, at the end of his tenure , Gombe is independent in terms of paying all recurrent expenditures rather than waiting for Abuja to send us money through the federation account to meet our recurrent expenditures.
Before this administration came on board, we had IGR of N5billion to N6billion.
We inherited a wage bill of about N1.2 billion; and right now, we are one of the very few states that are paying the new minimum wage. That is an addition of about N237million to our wage bill.
We were able to do N8 billion last year. And we are hoping that we will do much more this year. We are also doing reforms in the land registry where Gombe Geographical System (GOGS) has to come in. That will also allow us to collect more revenues that were hitherto not available to government to access.
take out N900 million from the statutory allocation of any state, especially a state like no 35 or 36 on the list of states in the federation account; we are number 35 or 36 almost every month.
That is just one. And don’t forget we have a wage bill to pay. We inherited a wage bill of about N1.2 billion; and right now, we are one of the very few states that are paying the new minimum wage. That is an addition of about N237million to our wage bill. We have consistently paid the minimum wage bill in the state every month till today. Monthly, what we get from the federation is about N3billion. So take out the loans (repayment), take out the salaries, so what do you have?
Tenure
During the course of this government, we took facilities. The first facility we took was a N10billion infrastructure facility from GT Bank. At the moment, we’ve paid more than half of it, and we have been responsible to ensure that we do not take loans that are outside the tenure of the administration. The N10 billion we took from GT Bank will expire in February 2023, which means that that loans will have been paid before the end of first tenure of this administration.
We also took another facility for our 2019 UBEC Counterpart Funding, which was N1.5 billion and N500 million for other donor agencies. If you recall, Gombe has been in the news for the rehabilitation of 114 primary healthcare centres across all the wards in the state. What we did was through the NSHIP project. The NSHIP project asked for $2million counterpart payment, which Gombe State government paid promptly. And with that, they were able to provide another $1.5 million counterpart fund, which was used to renovate, upgrade and enhance the capacity of our 114 primary healthcare centres across all wards in the state. I can make bold to state that there is no state that has renovated all primary healthcare centres in, at least, one ward. What we have done was to fully renovate the healthcare centres, provide laboratory equipment with 24-hour solar-powered light and all facilities that will cater for the primary healthcare needs of our people. That was achieved with the donor contributions,
Along the line, we also took N2billion healthcare facilities, which we were given during the COVID-19 pandemic. You all know, when the pandemic came, it was another issue, it affected all finances of everybody. That did not affect us. Gombe did not go out to cry or stop payment of salaries and government mandatories or whatever. All we did was trying to see how we can reduce our recurrent expenditures that were not necessary. I can tell you that last year, 2020, our recurrent expenditure went very low. In fact, government spending dropped to the barest minimum. Something that we had never seen in Gombe for a very long time. All the costs associated with government, such as travels, tours and all of them came down very low. It was a sacrifice the government had to make. That is the reason we kept our projects going and we didn’t have to borrow much to do what we are doing. Whatever savings that came after we had pay our salaries and all our mandatories would go into our projects.
At the moment, what we have borrowed as government, outstanding for the Mohammed Yahaya administration is N20.5 billion.All these will be paid within the first tenure of this administration, except for one facility which we inherited and concluded. That was the third bond, and we will run it into the second term of this administration.
Abandoned projects
I hope you went to the mega park which we inherited with about 38 per cent completion. Now, it is about 80 per cent completion. But what it is costing this administration is additional N3billion.So if you have collected bonds for that project and the project was not delivered and you left it at 38 per cent, and we are putting in additional N3billion, they should be cautious about what happened.
And then we have Gombe State University which was established in Kumu. This is another questionable project entirely. We have the Gombe State University inside Gombe, which we are grappling to fund, That university costs the state government over N200million every month, for which the state is committed to be paying and we do pay every month. We have not reneged on that. And then you have another one which has been established by another administration but not completed, It cant sustain itself. That would also be another burden on the state. Nobody is querying why you established new school or new higher institution but if you are going to establish an institution, you must be able to provide a sustainability plan and be able to make sure that that school is self-sustaining, Otherwise, there is no reason why you should have another school.