Funding Critical Infrastructure: Gombe State Government Gives Account

Gombe State Governor, Muhammadu Inuwa Yahaya

-by Barnabas Esiet.

Gombe State Government under the Leadership of Governor Muhammadu Inuwa Yahaya inherited debt burden and contractual liabilities worth about N124billion from the previous administration of Ibrahim Hassan Dankwambo.

The state commissioner for Finance and Economic Development, Muhammad Gambo Magaji, who disclosed this to financial journalist at a forum in Gombe recently, said it was necessary to put the records straight following recent negative criticism of the current administration, that is barely a little over two years, by some aggrieved persons with the intent to blackmail the Governor.

He listed all the projects initiated by the past administration in the state between 2012 and 2013 that were not completed at the time the administration handed over in 2019, noting that this gives credence to the fact most of the funds were either misappropriated or misapplied.

According to the commissioner, cumulatively, the Governor Yahaya administration pays N900.4million monthly to service the inherited debts adding that more worrisome is the fact that the loans were not utilized by the previous administration for the purposes they were obtained.

In his words: “Prior to the MIY administration, between 2016 and 2019, the 11 LGA’s had to borrow N1.3bn monthly to pay salaries. This administration, however, had within the first three months of its coming stabilized the LGAs financially and are now able to pay their salaries and pensions as at when due on their own. The state government has also been consistent in the monthly payment of the new minimum wage salary even as this has increased the state’s wage bill by over N2.85bn annually.”

He said the current administration has also cleared over N2.4bn gratuity arrears and is still poised to pay another tranche by December 2021 “due to its determination and the desire to uplift the living conditions of our senior citizens”

“Upon assumption of office, the administration was confronted with an empty treasury and a burden of over N124 billion in Loans/Bonds, Pension/Gratuity arrears and contractors’ liabilities. The inherited bonds raised by the past administration cumulatively in the sum of 25bn for infrastructure were spent without completing most of the projects.” Magaji said.

He listed some of the projects the loans were spent on to include: the Mega Moter Park at 37% stage of completion, costing over N6billion; Int’l Conference Center at 80% level of completion valued at over N4 billion; School of Nursing worth N2.27billion, 45% completed; GSUST KUMU 40% completed at the initial cost of N2.22billion; Regional Roads valued at N4.77billion, 25% completed, and Tanker Bay 80% completed at N816million.

“From the above, it is clear that all the projects initiated by the past administration between 2012 and 2013 were not completed at the time the administration handed over in 2019, giving credence to the fact most of the funds were either misappropriated or misapplied. This goes to show the recklessness and cluelessness of the past administration,” he noted.

“These projects need to be completed otherwise they will be left to rot away thereby losing all the funds while the present administration contends with paying the bond holders. Already, the Mega Motor Park is costing the state about N3bn to complete. The nagging question for all to answer, therefore, is how do we complete these projects and save the state from colossal loss especially with economic downturn occasioned by the Covid 19 pandemic and its debilitating effects.”

Gombe State Commissioner of Finance and Economic Planning, Muhammad Magaji
Gombe State Commissioner of Finance and Economic Planning, Muhammad Magaji

According to the commissioner, to achieve the desire of the Yahaya administration to bequeath a better and more economically viable State, the idea to raise the N35bn Sukuk bond was considered after a painstaking review and evaluation of the state of finances was undertaken which revealed a funding gap that needed to be bridged to enable the government deliver on its mandate.

“Again, the time value of money and low rates of interest played major roles in taking the decision. This is aside the need to ensure the completion of abandoned projects of the past administration. At present the debt-to-revenue ratio of the state is one of the lowest in the country at about 22% far less than the 73% of the federal Government. Recall that this ratio, due to the reckless misapplication of facilities by the last administration had over shot the 20% maximum limit and made it impossible for the present administration to adequately finance its projects.” He revealed.

“The review of the ratio to 40% now provided the window for the state to access funding. The proposed bond proceeds will be utilized to fund Phase 1 of the Muhammadu Buhari Industrial Park, the Gombe Capital Special Development Zone, which will include a new state secretariat complex, a new state assembly complex and a new judiciary complex – a replica of the 3 arms zone in Abuja. Part of the proceeds will also be used for the expansion of the Gombe Regional Water Project for which the FGN is also making a 30% contribution in the over N7bn project. The bond is designed in a way that it will not to have any negative effect on the state throughout its term.” The commissioner further stated.

According to Magaji, Borrowing is generally an accepted norm the world over in order to fund deficits, provide critical infrastructure and hedge against depreciation. The only downside is when it is misapplied or diverted from the original intent.  That therefore should be the worry and concern of every indigene of Gombe. All facilities obtained must be tied to projects, budgeted for and utilized for the purpose they are meant for. Till date, no recurrent borrowings have been made by the present administration. Furthermore, the MIY administration has always followed due process and met all regulatory requirements in all its dealings with financial institution and will continue to do so.

“With the strides achieved by the current administration, the state has attained national recognition from different credible rating agencies. These include; the best state in the Ease of Doing Business in Nigeria; the Number 10 on the Transparency and Accountability index and Number 7 on Fiscal Responsibility index among others. The present administration has also succeeded in creating a clear road map and has placed Gombe State on the trajectory of sustainable development through the 10 year plan (DEVAGOM).” Magaji noted.

In a statement, the state Commissioner for Information and Culture, Julius Ishaya Lepes said despite the economic depression that has led to the devaluation of the naira and heightened inflation, the Yahaya government has been able to meet its obligations and is executing meaningful projects that are impacting positively on the lives of the citizenry.

“Before the assumption of office by Governor Muhammadu Inuwa Yahaya in 2019, Gombe metropolis and its environs were without portable water supply mainly due to the neglect of the water works and unpaid liabilities of over N5bn. The MIY administration swiftly responded by settling the outstanding liabilities. This has guaranteed the restoration of adequate supply of water to Gombe metropolis and its environs with the pumping of about 50m litres of water daily.” The statement read.

According to the statement, the current  administration has taken a giant stride in the provision of critical infrastructure especially the completion of the abandoned regional and township roads, due to lack of funding  by the last administration, such as  the 25km Billiri- Gujba road, the 15KM Sabon layi-Ayaba road, the 15km Ladongar – Fubawure road, the 17km Kumo – Kalshingi   road, the 10km Kutare – Mona road, the 10km Kundulum – mallam inna – Kurba road and the 16km Marraraban Jarkwami – Daniya roads as well as the Industrial Cluster road networks.

“These projects have since been completed and are being enjoyed by the people. Other road projects being completed by the present administration under the same funding arrangement include Dukku – Kalam – Dokoro, Dukku – Jamari, Bambam – Tula – Yiri, Kwanar Rugaji – Kuka Bakwai – Galgaldu and Bajoga township roads among others. The MIY administration also initiated and completed the 15.2km Jabba – Garin Wada, the 21km Degri – Talasse and 16km Malala – Dukkuyel regional roads with the same funding. These are aside the township road projects in Gombe metropolis.”

The statement read in part: “As it is a standard practice, funding of counterpart projects are done through bank facilities. The state has been transparently executing such projects for the benefit of the people. Over 340 classroom blocks have either been constructed or renovated and equipped with modern teaching and learning materials.”

“The $2m NSHIP counterpart payment that facilitated the total overhaul of our 114 Primary Healthcare Centres (PHCs) across 114 wards in the state was also part of this facility. So also the NEWMAP/WB erosion control project for N2.9bn which is completed and has greatly assisted in reducing the menace of erosion and flooding in the state capital especially in the Gombe State University to Mallam Inna area.”

“The Contractor Finance Facility (CFF), even though not a direct loan but a guarantee to the contractors was secured to ensure the provision of ultra-modern solar powered street lights on all our roads – both double and single lanes – totaling over 114km of roads, fund the biometric and attendance equipment contract for which hundreds of millions of naira has already been saved and the guaranteed balance will be assessed by competent contractors to complement the N2bn FGN health facility designed to help states upgrade their health facilities due to the Covid 19 pandemic. At present, a new N1.8bn General hospital is under construction in Kumo, while 3 other hospitals are being renovated and upgraded. These include Bajoga hospital (650m), Kaltungo (1.2bn) and kuri (118m).”

Gombe State Commissioner For Information, Ishaya Lepes
Gombe State Commissioner For Information, Ishaya Lepes

Lepes said the Yahaya administration takes seriously its covenant with the good people of Gombe and will not in any way betray the trust bestowed in it by the people but will only strive to exceed their expectations.

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