By James Eze
If nothing else comes out today from the flag-off of PDP campaign in Onitsha, the controversy over the amount of money that former governor Peter Obi and his group bequeathed his successor will definitely dominate. It is in anticipation of this obvious attempt to perpetuate a lie that the Government of Anambra State has decided to restate the facts about this phantom N75 billion once again to erase all doubts.
Anyone who has followed political developments in Anambra State in the past three and a half years may remember that about three months after handover, there was a deliberate campaign of calumny against Governor Willie Obiano who had just marked his first 100 Days in Office. The campaign came as a shock to all and called for a lot of tact from Obiano given that former governor Obi who was suspected to be behind it was not only his predecessor but was also belonged to the same party at the time. It soon became clear that all was not well between the two and sadly, subsequent efforts to reconcile them did not yield fruitful results. Soon also, there were whispers that former governor Obi was allegedly demanding a refund of the sum of N7.5bn, which he claimed he had expended on the campaign for Obiano’s emergence as governor. This particular demand has dominated discussions in the media in recent times leading to unfair criticisms and comparisons of Obi’s 8 years in office to Obiano’s three years. Therefore, as we go into the intensive weeks of campaign in the build-up to the November 18 2017 gubernatorial election in the state, it has become necessary to address the N75bn controversy so that Ndi Anambra are properly guided in choosing their leader.
THE TRUTH IS AS FOLLOWS
OBI LEFT LIABILITIES IN EXCESS OF 127BN FOR OBIANO TO SETTLE. A key part of Obiano’s first election campaign was what the party called the 4Cs. One of the Cs is “continuity” and another is “completion,” while the last is Commencement. In other words Obi had committed that Obiano would continue his projects and complete them. In line with this Obi left 101 roads uncompleted, left several power projects uncompleted, left various hotels uncompleted etc. If we use just these three classes of projects, we shall find that Obi left net liabilities of well over N100BN.
101 roads estimated to cost over N127bn were left behind uncompleted (Originally N185bn but he had paid N58bn). Obiano has quietly completed 51 of these roads in three and half years in fulfilment of the promise of Continuity and has progressed to between 60% and 75% on the balance of 50 roads.
Hotels , shopping malls and power projects Obi started but left uncompleted have gulped an additional N5bn from the current administration in the same spirit of Continuity
Please read through this table of investments handed over totalling N75bn (largely non-cash investments and some of them older than Obi’s administration)
|
S/N |
LOCAL CURRENCY INVESTMENTS |
AMOUNT |
COMMENTS |
|
1. |
Nigeria Independent Power Projects |
N9.0bn |
This program was conceived in 2004 by the Obasanjo administration. The Federation account was charged to fund this initiative. Involuntary investment with no individual consent whatsoever required from Anambra State Government. |
|
2. |
Orient Petroleum Resources Plc |
N4.0bn |
Land resources of Anambra State Government, valued at approximately N2.23bn and cash investment of N1.77bn. Specifically, H.E., Dr. Chris Ngige invested N100m and issued C of O for land acquisitions. H.E., Virgy Etiaba invested N1.17bn while H.E., Peter Obi disbursed N750m and converted the above-mentioned land into shareholding in Orient Petroleum Plc. |
|
3. |
Onitsha Hotel, Onitsha |
N1.0bn |
N1.0bn was paid to the contractor on this project by the past administration as at handover in March 2014. The current administration concessioned the project to a reputable real estate development company, Cardinal Developers. The company will complete the Hotel, build a 2,000 seater convention centre and luxury apartment estates. Current economic realities and the naira devaluation have heavily impeded progress on this development. |
|
4. |
Agulu Lake Hotel, Agulu |
N1.0bn |
N1.0bn was paid to the contractor on this project by the past administration as at handover in March 2014. The current administration has settled certificates totaling N2.55bn till date on this project. We have also secured a partnership with a world class operator, Golden Tulip to manage the operations of the hotel. The hotel is scheduled to open for business in November, 2017 (later this year). |
|
5. |
Awka Shopping Mall, Awka |
N0.9bn |
N0.9bn was paid to the contractor on this project by the past administration as at handover in March 2014. About N1.0bn in contract certificates has been settled by the current administration till date. Project design was also amended to include a cinema in the shopping mall. The State, while finalizing agreements with Genesis Deluxe Cinemas and Spar to serve as anchor tenants, we are exploring PPP options to complete the mall and manage its operations. |
|
6. |
Nnewi Shopping Mall, Nnewi |
N0.6bn |
Amount paid to contractor as initial mobilization for shopping mall construction. About N860m in contract certificates have been settled by the current administration till date. The State is finalizing agreements with Spar and Dubai-based entertainment companies to serve as anchor tenants while simultaneously exploring PPP options for completion and management of its operations. |
|
7. |
Onitsha Shopping Mall, Onitsha |
N1.0bn |
It is pertinent to note that Africa Capital Alliance is the financial investor on this project. The previous administration contributed the former Anambra Broadcasting Service land to the project’s special purpose vehicle in exchange for a 25% equity stake. No actual cash was invested by Anambra State in this project. |
|
8. |
Intafact Beverages Limited |
N3.5bn |
To date, Anambra State has invested N1.9bn in the company. The last administration invested about N1.4bn. While the current administration invested N540m as part of a rights issue exercise to finance expansion plans in April, 2014. No further investments were made by Anambra State Government in Intafact Breweries. This figure is a discrepancy and should be revised to N1.97bn. |
|
9. |
Onitsha Business Park I |
N300m |
During the last administration, ANSG via the Ministry of Industry, Trade & Commerce built a commercial real estate development in Onitsha at a cost of N300m. |
|
10. |
Onitsha Business Park II |
N300m |
During the last administration, ANSG via the Ministry of Industry, Trade & Commerce awarded a contract to build another commercial real estate development in Onitsha at a cost of N300m. This project has been completed during the current administration. |
|
11. |
Anambra State Independent Power Generating Company Limited |
N250m |
The sum of N250m was paid to the project developers, Denca Resources to serve as ANSG’s investment in a proposed 400MW project in Ogbaru, Anambra State. After numerous attempts to engage representatives of Denca Resources, the Company eventually honoured the State’s invitation to the Executive Council briefing. The project is under review by ANSIPPA and its execution is currently experiencing significant delays as a result of the slowdown in the economy. |
|
12. |
E-Force Limited |
N126m |
During the last administration, ANSG via the Ministry of Agriculture paid N126m to E-Force Limited. This sum represents 20% of the cost of 100 tractors from Belarus. E-force Limited provided remainder 80%. |
|
13. |
Emenite Limited |
N750m |
Emenite Limited is a leading manufacturer of fibre cement roofing and ceiling products. Dr. The Hon. M. I. Okpara, erstwhile Premier of the Eastern Nigeria, invested in Emenite Limited in October, 1961. In 1993, during the creation of States in Nigeria, 16.5% equity stake was allocated to Abia, Anambra, Enugu and Imo states. No additional monies were invested by the subsequent administrations. |
|
14. |
Quoted Investments Portfolio |
N350m |
Current value of the equity portfolio is approximately N300m given the current decline in stock prices on the Nigerian Stock Exchange. |
|
15. |
NSIA Anambra State Contribution (State + Local Govt) |
N1.5bn |
This program was conceived in 2010 by the Musa Yar’adua administration. The Excess crude account (which forms part of the Federation A/c) converted into the Nigerian Sovereign Wealth Fund. The Federal, all 36 States & 774 Local governments are shareholders of the NSIA. Involuntary investment with no individual consent whatsoever required from the State. |
|
16. |
Investment with Bank of Industry to Support SMEs in Anambra State |
N500m |
Counterpart funds (with BOI) for SME facility. Ministry of Industry, Trade & Commerce. Not an Investment. |
|
17. |
Investment to Support Micro Credit Bank in Anambra State |
N500m |
Counterpart funds (with BOI) for SME facility. Ministry of Industry, Trade & Commerce. Not an Investment and 0% chance of recovery given the disbursement structure and criteria. |
|
18. |
Investment with Bank of Agriculture to Support credit to Anambra Farmers |
N480m |
Counterpart funds (with BOA) for Anambra Farmers facility via the Ministry of Agriculture. Not an Investment. |
|
19. |
Commercial Agriculture Scheme |
N1.0bn |
Funds borrowed from the Federal Government for on-lending to farmers in the State via the Ministry of Agriculture and All Farmers Association of Nigeria (ALFAN), Anambra Chapter. Not an Investment and 0% chance of recovery given the disbursement structure and criteria. |
|
SUB-TOTAL (1-19) |
N27.0bn |
||
|
20. |
Foreign Currency Investments (US$155m) |
N26.5bn |
During the final months of the last administration, the State invested a total of US$155m (N26.5bn) in Eurobonds and other foreign denominated securities held with Access Bank, Fidelity Bank and Diamond Bank. Given the loss in market value incurred between 2014-2015, the current administration appointed a reputable investment banking firm, Afrinvest West Africa Limited, to professionally manage the entire investment portfolio. The State has liquidated securities worth approximately N10bn to settle certificates arising from inherited projects from the past administration. |
|
21. |
FGN Approved Refund |
N10.0bn |
This sum represents ‘Approved Refunds’ by Federal Government for State funds spent on Federal-owned roads across the State. Today, the figure certified by the Federal Government amounts to N43.8bn incorporating road works done by the previous administration and the Obiano administration. Extensive discussions are ongoing between the State and the Federal Government regarding full or a phased out settlement of the N43.8bn refunds. |
|
22. |
Expected Bank Balances as at 31 December, 2013 |
N11.5bn |
December, 2013 balance. However, the State’s cash balance in March, 2014 (upon handover) was approx. N9.0bn. |
|
GRAND TOTAL LOCAL & FOREIGN INVESTMENTS, REFUNDS & BANK BALANCES |
N75.0bn |
THE 75BN CLAIM IS A MONUMENTAL DECEIT BY THE IMMEDIATE PAST GOVERNOR OF THE STATE. AS CAN BE SEEN IN THE TABLE ABOVE, THE SO CALLED CASH LEFT BY OBI ARE IN INVESTMENTS MADE IN SHARES, HOTEL PROJECTS, SHOPPING MALLS ETC. How can these be cash Obi left for Obiano. Is governor Obiano expected to sell them to raise funds for projects and state activities? Obi needs to explain how these qualify as cash. Some of the items that were termed investments were counterpart funding for donor agency projects such as Counterpart funds with the Bank of Industry for SME facility, Ministry of Industry, Trade & Commerce and others. Worse still is the fact that some of the items were investments made before Obi was born or when he was too young to know what was going on. A good example, the investment in Emenite which was made by the premier of the old Eastern Region, Dr. M.I Okpara.
The last part is the issue of 155m dollars bond. On the face of it this appears like a very prudent thing to have done. But the Obiano administration is working out aggregate revenue figures that appertained to the entire 8 years of Peter Obi’s period and the size of that Government’s expenditure. The Government sure is undertaking this analysis since there an obvious need of an intelligent statement of the inefficiency of the Eurobond investment. Anambra State in the 8 stretch years of boom under Peter Obi was entitled to far more than the miserly and inefficient invested in Eurobond, which resulted to a huge fall in the value of those bonds . It would have been best if he made the investment with expert advice which the current administration has now done to help assure value from the investment. Having said this, Obi handed over more liabilities than this 155m dollar bonds / assets. A look at the balance sheet he left behind will show that he left the state in the red (if we were to ensure that the 4Cs strategy was upheld). A focus on ensuring that we conclude projects handed over, continue some and commence others meant we inherited bills and liabilities. Below is the state’s balance sheet as handed over by Obi. We had more debt to pay than the cash or near-cash he left behind. Even if we sold all the bonds he left in the banks we will not be able to pay all the debt on roads, hotels, shopping malls etc he left behind. The cold truth is that he robbed Peter to pay Paul. He denied contractors their pay to save money in bonds.
The table below shows a comparison of the liability left by Obi and the true value of the investments he left.
Again read the below table for a Comparison of Liability and True cash value of Assets left by Obi
|
Asset |
Liability |
||||
|
|
(N billion) |
Notes |
(N billion) |
Notes |
|
|
75bn claim |
0 |
Most of these are all investments that illiquid and have attracted even more investment from the Obiano administration |
Road projects unpaid for |
127 |
101 road projects handed over. Obiano has completed 51 |
|
$155m bond |
26.5 |
Lost value within first year of the current administration |
Salaries for 6000 new teachers hired after 2013 elections |
11 |
Estimate for 3.5 years |
|
Cash |
9 |
Amount stated in handover note was as at Dec 2013 and had been depleted to 9 by March |
Hotels, shopping malls & power |
5 |
|
|
Net Liability |
-107.5 |
||||
|
Total Asset |
35.5 |
|
Total Liability |
35.5 |
|
Anybody who is familiar with the ways of manipulative politicians will know that the deafening noise over N75 billion is meant to switch Anambra people’s ears away from the fact which former governor Obi himself buried in his own handover note. And that fact is that he had stated that N11 billion was in cash deposits in banks even when he had written out cheques to be cashed. So, at handover on March 17, 2014, instead of N11 billion, what was in the banks was N9 billion.
Another reason which is important to state here is that former governor Obi himself knows that he had tied Obiano down to multiple contracts in excess of the totality of what he handed over to him in liquid and illiquid assets. Consequently, there was a concerted effort to drown the discussions with one side of his balance sheet. The motive was clear; the other side is too filthy to be discussed. But a responsible Government owes it to the people to know that former governor Peter Obi left liabilities as huge as N185 billion, out of which Obiano has now paid steadily to bring it down to N107 billion.
The question any intelligent person should ask any time conversations focus on Mr Obi’s billions in Eurobond should be what is this compared to N185 billion obligation to which he had chained the Obiano administration?