PRESS RELEASE
12th August, 2024
The APC Lacks Credibility To Discuss Debt Management In Delta State
The recent misguided propaganda by the Delta State Chapter of the All Progressives Congress (APC) to misinform the public on the debt management measures being undertaken by the administration of His Excellency, Governor Sheriff Oborevwori, was, at best, a shameless act of its characteristic duplicitousness.
In the release signed by its Publicity Secretary, Valentine Onojeguo, the APC merely tried to disinform the public by attempting to play down the significance of Governor Oborevwori’s act of responsibility in reducing the debt profile of the State to ensure greater financial stability and sounder economic health.
It is indeed strange that the APC in Delta State would pretend not to know the origin and the truth about the debt profile of the nation and the States. Let us remind them that through the mismanagement of the national economy by the APC-led Federal Government, from 2015 when it took over the reins of government with President Muhammadu Buhari, it has presided over heavy and reckless borrowing, escalating the national debt stock from about N7 trillion after the 16 years of the PDP governance, to over N90 trillion under its eight years, leading to a situation in which 97% of Nigeria’s national revenue was devoted to debt servicing and the attendant reduced revenue allocations to States and Local Governments.
While it failed woefully in managing the crude oil production capacity of the nation which it brought from over two million barrels per day to a low of about one million BPD, a huge chunk of the revenue receipts from even the low output had been devoted to their corruptive importation of petroleum products and payment of fuel subsidy, by which little or nothing was being returned to the federation account.
The situation was further worsened by its poor fiscal and monetary policies which steadily and increasingly devalued the Naira and posed inflationary difficulties across all sectors and segments of the nation.
The former Minister of Finance under Buhari, Zainab Ahmed, openly admitted in 2021 that, revenues were low and so were federal allocations to the States and Local Governments.
“The crash of the crude oil prices really hit us very hard in terms of revenue. We have very low revenues, we have very high expenditures. What we have done so far is just to provide some stability to make sure salaries are paid, pensions are received every month; that we send funds to the judiciary and the legislature; that we meet our debt service obligations. That’s what we are doing. It also means we have had to borrow more than we have planned.
“It is a very difficult time. I cannot explain to you how difficult it is, not just for the Federal Government but also for the States. We see increasing reductions in our FAAC revenues. So, FAAC reduces and whenever FAAC reduces, it is a very difficult situation.”
Those were the words of the former Minister of Finance of the APC government on the national economy.
Not only did the federal government try to sustain the economy purely on loans and more loans which were not applied to productive sectors nor effectively and equitably to infrastructural development, it also resorted to printing money which is the worst style of economic management.
During a Senate Committee hearing in March 2024, the current Minister of Finance and Coordinating Minister of the Economy, Wale Edun, gave a sordid picture of how the APC mismanaged the national economy, from 2015 to 2023.
“It came from eight years of just printing money not matched by productivity. It’s not like when you earn dollars, and you free the naira alongside it. We are going to audit even the N22.7 trillion printed aimlessly. The consequence of the eight years of printing money without productivity is high inflation confronting the country now,” he said.
Given this background of APC management of the economy from 2015 to 2023, as we have seen attested to by its Ministers of Finance, it can only be shameless pretence, though in line with its usual deceitfulness, for the APC to question why component States of the federation had to source market funds, including loans and bonds, to be able to function effectively in the service of their people.
According to the National Bureau of Statistics, Lagos, an APC State, led in the borrowing with close to N1 trillion.
“Lagos State recorded the highest domestic debt in Q2 2023 with N996.44 billion (and) recorded the highest external debt with US$ 1.26 billion, followed by Kaduna with US$569.38 million.”
Delta State, like all other States could not have been an exception in seeking ways and means to serve its people. With a total exposure of about N450 billion accumulated through the years into the first quarter of 2023, as forced mostly by consequence of APC mismanagement of the national economy, Delta State holds neither the highest domestic nor external debt, and the immediate past administration of His Excellency, Senator Dr. Ifeanyi Okowa, clearly outlined the infrastructure projects on which borrowed funds were applied, as are visible across the State.
However, in the current dispensation, even when the APC federal government and some other States have continued to borrow, Governor Sheriff Oborevwori has decided not only to hem borrowing but also to pay up and reduce inherited loans and interests in order to safeguard the State from the kind of debt service burden that has crippled the nation under the leadership of the APC.
Such commitment is not only noble, but can only be executed through a deep sense of leadership responsibility and financial prudence as Oborevwori is demonstrating.
In his 2024 budget appropriation, he was emphatic about keeping the State expenditure within revenue limits, reducing its debt profile and ensuring that the administration does not build new inflationary pressure through extra budgetary funding. In simple terms, his government is averse to borrowing, profligacy and expenditures that are not planned nor budgeted for.
It was for this reason that he cut down on various items relating to executive cost of running government while he increased the budget volume for projects and programmes directly related to providing for the people, communities and workers.
This was demonstrated in the reduction of Overhead Cost by N9.7 billion or 8.35%, from N116.2 billion in 2023 to N106.5 billion in 2024; the reduction of the vote for Grants and Contributions by N4.7 billion or 32%, from N14.7 billion in 2023 to N10 billion in 2024; the reduction of the capital vote for the Administration sector by N20.9 billion or 48%, from N43.6 billion in 2023 to N22.7 billion in 2024; and the drastic reduction of Contingency provision by N8.2 billion or 61.7%, from N13.3 billion in 2023 to just N5.1 billion in 2024.
While the budget made a provision of N50 billion for possible receipts from loans, it is on record that the administration has not borrowed a dime in its almost fifteen months, notwithstanding the financial requirements for the execution of high level infrastructure projects, workers and social welfare investments, and human capital development programmes being churned out across the State.
Rather, Oborevwori has saved over N205 billion through financial efficiency and gone on to reduce the State debt profile by N180 billion.
It is these achievements in the financial management of the State that the APC is quarreling with.
But see why we will not bother about their charade: They want the State to be run the way APC has misrun the national economy since 2015, in which through their reckless borrowings they led Nigeria into servicing its debts hanging with over 97% of its national revenue, and borrowing evermore in the attempt to sustain the economy on borrowed life wire, while actually crashing it. God forbid that to happen in Delta.
On the contrary, Oborevwori is determined to manage Delta into a debt-free State.
Thankfully, from the relative increase in oil production output, especially in Delta as occasioned by Oborevwori’s efficient management of relations with oil producing communities, there is increased allocation to the State and he is focused on managing the State economy within its means, including intensified IGR, to administer the State in such manner that debts would not be left for coming generations and administrations to inherit as the APC does and would want to see in Delta State.
Signed:
Engr. Dan Ossai, MNSE, CEng.
State Secretary,
PDP, Delta State.
