Bailout as economic slavery; the Ondo example

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By; Odeyemi Samuel.

The nation is plagued with cconomic crisis, State Governments cannot pay their workers’ salaries, even as Labour leaders declare indefinite industrial actions in defiance of Governors’ threat against such protest which has indeed further paralysed the already bastardized economy of the states.

What really led to this pathetic situation could be traced to over borrowing tendencies of their Excellencies to bite more than they could chew forgetting that ”whatever has a beginning must have an end”.

The Oil, which has been the ancestral inheritance of the nation’s fortune is really drying up, or rather the over bearing price of Crude Oil is fallen by every passing hour in the international market.

Having exhausted the previous ‘Debt Management Strategy (DMS)’ by December, 2015, the Federal Government has restrategize another three years action plan for 2016 – 2019. This was made known to state House Correspondence in Aso Rock by the Minister for Information, Alhaji Lai Mohammed after the National Executive Council (NEC) meeting of Wednesday, June 15, 2016.

The meeting which was presided over by the Vice President, Prof. Yemi Osibanjo resolved that Government is ready to embrace external borrowing because they were “Cost Effective” and with more beneficiary terms.

According to Alhaji Lai Mohammed, Government is ready to borrow more external debts in dollars or in any other currency since the ”interest rates are cheaper”.

This however shed light on why State Governors will prefer to borrow at all cost just to get enough funds to executive ”White Elephant projects”, projects they could not complete with available resources only to get money to either prosecute elections or contest elections.

In Ondo State for instance, the state House of Assembly endorsed the taking of N14.16 billion Federal Government loan which was stated in a Press statement issued by the Director, Information Services of the House.

According to the statement, this will allow government meet its responsibility to Workers and Pensioners in the state in view of the current economic situation across the country which has made payment of salaries in 30 states of the Federation difficult.

In his own contribution at the plenary session of the House, Hon. Jamiu Maito, representing Akoko North West Constituency implored members to take the request by the state

The position of the Federal Executive Council was corroborated by the Minority Leader of the Ondo State House of Assembly, Hon. Musa Mukaila, representing Owo Constituency II, who argued that the loan is strictly for ”Recurrent Expenditure, more so when the interest is very minimal and accessible over a one year period”.

Other point adduced by the Lawmaker is that, the Civil Servants are the engine room of government enterprise who should be encouraged through payment of their dues in other to enhance maximum productivity.

The attempt of the Federal Government to assist the states with ”bailout loans” commended by Otunba Ade Adeniyi, the representative of Ondo West Constituency I, who maintained that the gesture by the Federal Government was in the interest of the 35 states of the Federation who are in distress in view of the current economy challenges across the country.

The Majority Leader of the House, Honourable Gbenga Akinsoyinu, Ondo West Constituency II, expressed the view that the economy of Nigeria is drifting towards a recession and consequently affecting the Welfare of the citizenry as most people are unable to access a three square meals a day.

Hon. Akinsoyinu however renewed the call for the restructuring of the Federal structure to reposition the economy of the country in the overall interest of the majority.

While arguing that the loan is to assuage the plights of workers, Hon. Akinsoyinu remarked that because of the one year moratorium, the Federal allocation to Ondo State during the period, gave a marching order that the state government should ”go ahead to access the loan”.

The Speaker of the House, Rt. Hon. Jumoke Akindele while commending the Federal Government’s effort to ”bailout” the states, added her voice to the restructuring of the Country, saying the gesture will further reposition the sharing formula of the economy in favour of the component States.

Following due Democratic process, the Speaker threw the motion into vote and it was supported by the overwhelming majority of the Lawmakers, disclosing that the loan when accessed will attract the interest of nine percent with ten years inclusive of one year moratorium.

State Governors should act with sincerity of purpose by using the loan to pay workers and pensioners’ wages because going by what transpired during the first bailout loans released by the FG, most of them hoarded the money until Workers started to ask for the whereabouts of the funds, and at the end of the day, the money was not able to pay the outstanding wages which it was meant for initially.

State Governors should use the money judiciously well and bailout their respective states from ”Economic Slavery” and put an end to using loans to pay their workforce because continuous loans taking will compound the problem of encountering empty treasury for the next decade if not century.

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