Sam Hart
3 October 2008
opinion
Much has been said and a lot more written on the financial profile of Abia state and its implications as regards the efforts to develop the state. This effort is an attempt to put the factors in proper perspective.
On assumption of office on May 29, 2007, Abia State Governor, Chief Theodore Ahamefule Orji resolved to tackle headlong, the issue of excessive debt overhang affecting the revenue accruable to Abia State from the federation account.
The Governor also resolved to do all possible to shore up the revenue profile of the state by exploring avenues of resolving the various contentious oil wells that belong to Abia State.
Against this backdrop, the Governor, within weeks of assumption of office, wrote a passionate letter to the president, Alhaji Umaru Musa Yar'Adua requesting him to resolve the contentious oil wells in favour of Abia State.
To the Glory of God, and for the benefit of the people of Abia State, President Yar'Adua granted this request and thus, 46 oil wells, which were hitherto ceded to Rivers State, were decided in favour of Abia State.
Thus began a concerted struggle by the Governor to ensure that the revenue accruable from these 46 oil wells are credited to Abia State to enable it confront its numerous developmental challenges.
This prompted the Governor to pay personal visits to the Revenue Mobilisation, Allocation and Fiscal Commission, the Minister of State for Petroleum Resources, the Director General of the Debt Management Office, the Department of Petroleum Resources and several other agencies that are involved in one way or the other in the resolution of the matter.
As a follow up to his visits, the Governor also set up inter-ministerial committees to follow up on discussions held with the various departments and ensure the speedy resolution of the issues in contention.
However, till date, revenues accruable from the 46 oil wells are still not credited to the account of Abia State due to the non-conclusion of the bureaucratic processes necessary for the exercise. Governor T.A. Orji is however not leaving any stone unturned in his bid to ensure that this matter is resolved as soon as possible.
As for the debt profile of Abia State, which has been a burden the state has been bearing since its creation in 1991, there is the need to properly explain the issues surrounding it.
In a bid to ensure that both the federal government and all state governments exited the foreign club of creditors, the regime of former President Olusegun Obasanjo took money from the Excess Crude Account to pay off all debts owed to foreign creditors.
The understanding then was that the excess crude share of certain states, which did not owe any debts, would be used to pay on behalf of states that owed debts provided that those states will pay back through withdrawals from their shares of the subsequent excess crude revenues.
It is common knowledge that the debt profile of Abia State as at the time of exiting the foreign club of debtors was the highest among all the states of the federation.
What accounts for the huge debt profile of Abia State is the fact that most of the companies for which Dr. Sam Mbakwe, Governor of old Imo State collected foreign loans to erect fall within present day Abia State.
They include the Golden Guinea Breweries, the Modern Ceramics Industries, the Ogwe Golden Chicken Farm, the International Glass Industry and the Metallurgical Industry.
When Abia State was created out of the old Imo State in 1991, it was agreed that the new state will inherit the liabilities arising from repaying the loans sourced for projects that fall within its borders.
The number of exponentially contributed to the huge amount of liabilities inherited by the new state.
Another factor that has not helped the situation is the fact that only the Debt Management Office (DMO) seems to know exactly how much Abia State is owing. To make matters worse, the deductions are done at source without prior warning leaving the state accountants with dashed hopes each time they travel to Abuja for revenue allocation meetings.
It was in the light of this seeming injustice that the Attorney-General of Abia State and his counterparts from seven other states affected by the excess crude deductions sued the Federal Government demanding a stop to the deductions until imputs were sought from the state.
While the case was progressing, the Federal Government called a meeting of the aggrieved states and prevailed on them to withdraw the court case in favour of a political resolution of the impasse.
Till this moment, no resolution has been achieved yet and the deductions are still on going raising the question as to who is getting the short end of the stick under the circumstances.
It is equally important to emphasize that since the assumption of office of the administration of Chief T.A. Orji, it was only once that excess crude revenue was paid to Abia State.
Subsequent excess crude revenues accruable to the state have been withheld on the basis that they are being used to repay the states borrowed from to exit the club of foreign debtors.
As it stands now, even though Abia State no longer owes any foreign debts, it however owes local debts to the states whose shares of the excess crude revenue were used to liquidate those foreign debts.
It therefore goes without saying that until these internal debts are fully liquidated, no excess crude revenue may be coming to Abia State.
Governor T.A. Orji has however made representations to the Federal Ministry of Finance and the Debt Management Office on the need to restructure these repayments over a long period of time so that at least some revenue will be coming to Abia State from the excess crude funds which will be used for pressing infrastructural development projects.
It is however pertinent to point out that these challenges notwithstanding, the State Government has not in anyway relented in its determination to ensure qualitative service delivery to the people of Abia State.
It is the desire of His Excellency, Chief T.A. Orji that Abians are permanently kept abreast of developments in government so that they are well informed and by extension, rumors and misinformation will have no place within the Abia polity.
- Hart is the Chief Press Secretary to the Governor of Abia State
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