FEATURES: Bond Politics: ‘Loan Not To Oil My Re-Election,’ Fayemi

The news recently that the Ekiti State Government has returned to the Bond Market to borrow N5 billion was received by members of the public with mixed reactions.     Both the opposition Peoples Democratic Party (PDP) and the Labour Party in the State sharply criticised the decision by the Dr Kayode Fayemi to according to them “go to the bond market twice in two years to borrow funds.”
The parties claimed that Dr Fayemi went to the Bond Market in 2011 to borrow N20 billion which they said he could neither account for nor were there tangible projects on ground on which the loan was spent.

The State PDP which condemned the move, accused the Governor of taking the loan for the purpose of funding his re-electioneering campaign.
The Labour Party while expressing shock that Dr Fayemi is taking another loan few months to the end of his first term, noted that the Governor certainly had a hidden agenda which he had not allowed the public to know.

The parties accused the Governor of mortgaging the future of the State and the coming generations which they said “would bear the burden of the debt Governor Fayemi is accumulating for them.”
Governor Fayemi however vehemently denied the allegations which he said were deliberately cooked up by the opposition to mislead the Ekiti people and whip up sentiments for selfish political gain    .

In an interview with The Guardian, Governor Fayemi said,  “It is not correct to say that we are going to the Bond Market few months to the end of our first term. Those who said that totally missed the point. We went to the Bond Market two years ago to raise N25 billion for regenerating infrastructural projects.

“We accessed the first tranche of that bond which was N20 billion in December 2011. What we have done now is that we have just accessed the balance, which is N5 billion. If we add 20 to 5 it becomes 25, which is still the same bond.

Dr Fayemi debunked the claim by opposition that the N5 billion is to oil his re-election saying it was o deliberate mischief to promote disaffection among the people. “I always say and as you journalists always tell me, opinion is free, facts are sacred. What we took the balance for are specific and measurable. They are physical projects. They are not figment of our imagination. The projects are scattered all over the state and they are contractor financed. They are independently verifiable projects.

“The Security and Exchange Commission (SEC) would not give its approval if it has not come to verify and inspect the projects, read the feasibility study and the contractual agreement we have with the contractors handling the various projects. The genuiness of the bond is further boosted by the approval from the Debt Management Office (DMO). It is a fact that the DMO would not approve the borrowing if the state has over-borrowed, because the DMO regulates borrowing by states.
“Ekiti was not the only state that went to the Bond Market recently, but it is note-worthy that Ekiti was the only state that got all the amount it asked for.

There was a state that asked for N20 billion but was given only N10 billion based on its capacity to carry.
The Governor said his Administration has stated repaying the N20 billion it took two years ago and it was not true he was accumulating debts for the State.

“In the case of Ekiti, every month we pay through an irrevocable standing payment order the sum of N4 million on our bond. If that is calculated since the 2 years we took the bond, it would show that we have paid back N9.6 billion from a bond of N20 billion. When people still harbour views view like this, we have vowed not to get annoyed but instead we would continue to communicate with them, we would continue to offer explanations. For people still harbouring this view my position is that they are doing so either as a result of genuine ignorance or lack of knowledge of the ways the Bond Market operates and of the genuine intention of government, may be as a result of disappointment experienced with past governments.

“It is therefore our duty to continue to explain and leave the books opened to them because we have nothing to hide. Ekiti State Government is the only one in the entire federation that has domesticated the Freedom of Information Act passed by the National Assembly. For those who may not be willing to access information about this bond through the government, because they think it could be partisan, they should go to SEC or the DMO.

On the claim that the Government could not account for the first tranche of the bond the governor said, “All those projects we earmarked for the first tranche are now in place, generating funds for the state, adding value to lives and raising the profile of the state locally and abroad. Ikogosi, one of those projects that benefitted from the bond is today a centre of world attraction where tourists troop to in thousands on daily basis.

“Ikogosi Warm Spring prior our intervention was a residence for rodents and snakes. We used N1.5 billion from the first tranche to rehabilitate and put it in the current befitting state. Just after two years of our intervention, when we did asset valuation of Ikogosi, it has doubled, it is now N3 billion.

During the Christmas and the New Year festivities, over 30,000 tourists visited Ikogosi, while the surrounding communities are now profiting from the rehabilitation as their businesses are experiencing
boom. He highlighted some of the projects the last tranche would be channelled to.

“We are targeting outstanding projects. The state’s Sports Pavilion is one of them.The money would also be channelled to the completion of Ekiti State Government House. Is it not funny that after over 17 years of creation the state has no Government House. There is no reason why it should be so, Ekiti must not be reduced to a second state or be made to permanently remain rural and rustic and not be able to compete in the committee of states. I reject that.

He also spoke on how the loan has transformed the lives of the people and the State’s economy. “Anybody who has a fair knowledge of how economies are regenerated would know that the capitals we have injected into the economy have begun to regenerate. They have increased the quality, the capacity and the creative tendencies of the state economy. For example if the government has not invested on road infrastructure there wouldn’t be good road, to evaluate farm products to the market and the cities.

“The influx of business-minded people into Ekiti has made the state much more competitive in terms of business. This is evident for instance in the countless number of hotels that have sprung up all over the state in the last three years. This is certainly unprecedented in the history of the state. The practice in the past where people in the state went to bed by 7 p.m. has changed, because we have installed functional street-ight in all major streets in the state.

“Today taxi, commercial motorcycle operators as well as traders operate their businesses beyond 11 p.m. Now there is hardly any time of the day that you enter Ado-Ekiti for instance that you will not find food to buy, because most restaurants operate far into the night.

“With investment in infrastructure, this government has successfully created night life in Ekiti, which was not there before.
The Governor who described critics of the loan as economical with the truth said, “One other area where critics of the bond have not been fair to us is that they have failed to tell the world that despite the fact that we went to the bond market that never prevented the government to deliver in all its obligations and pledges to the people of Ekiti. Rather than shirking away from our responsibilities, we have continued to perform beyond expectations. We have increased salaries of workers thrice in the state in just three years that this Administration has been in power, without sacking anybody except those that have got to the retirement age or those who were ghost workers.”

“This Administration gives social security to the elderly, this was a program conceived and started by us. The youths are also not left out as we have created a number of programmes that are giving them thousands of jobs. We remained un-wavering in both our free health and free education programmes. In the same manner we have continued to excel in our road projects. There is no community that we have not touched in our road projects.

“We are not incurring debts at all. As I said earlier, the money we took is for investment. This is a loan with a very low interest. Let me tell the whole world again that this N20 billion bond we took just two years ago, we have paid back nearly N10 billion. If in two years, we have paid almost half of the amount we borrowed, then where is the case of pilling up debts.

“From what I have just said it is obvious that opposition elements are just selfishly orchestrating lies against us. In another words, what this means is that if I am in office for a legitimate constitutional two terms, I would have finished all these projects and got the loan fully re-paid.

“Iree Burnt Brick Industry, another project that benefitted from the bond is now fully revived and is working optimally. It was abandoned for about 23 years. So where is the issue of pilling debts for future generations?

By Abiodun Fanoro

This article was first published in The Guardian on Friday, 14th February, 2014

Last modified: February 14, 2014