Ekiti Faults Federal Agency’s Claims On Debt Profile

September 8, 2013

L-R: Chairman Ekiti State Fiscal Responsibility Commission, Mr. Bayo Aina and Commissioner of Finance, Mr. Dapo Kolawole, during a news conference on the state of the state's finances in Ado Ekiti.

The Ekiti State Government has faulted the claim of a Federal Government agency, the Fiscal Responsibility Commission (FRC) that the state is heavily indebted owing to huge borrowing from the Capital Market and other financial institutions.

 It assured the people of the state and its business partners that there is no cause for alarm on its financial state which it described as “very healthy” and under the control of a “prudent and efficient administration.”

 At  news conference jointly addressed by the State Commissioner for Finance and Economic Development, Mr. Dapo Kolawole and the chairman of the state Fiscal responsibility Commission, Mr Bayo Aina, the state maintained that the report published by the FRC was not only misleading but also incorrect and not up-to-date.

  Clearing the air on the debt profile of the state, both Kolawole and Aina stressed that the state had forwarded its financial report for year 2012 to the committee as at June, adding that the FRC report which was reported in the media was at variant to the current state of things in the state.

 Kolawole said the FRC displayed gross inefficiency by publishing a report of the 2011 financial position of the state in 2013.

Kolawole said the attempts by politicians in the opposition camp to capitalize on the report to attack the Dr. Kayode Fayemi administration is an exercise in futility, adding that the people are living witnesses to the results of the bond sourced from the Capital Market to finance key projects.

The Commissioner pointed out that the Fayemi administration had repaid about half of the  N20 billion it raised from the Capital Market in 2011. The N20 billion Bond, according to him, was duly certified by the Federal Ministry of Finance, Debt Management Office (DMO) and FRC.

Kolawole noted that Ekiti has nothing to hide on the issues of its income, expenditure, revenue and debt profile maintaining that the state had not exceeded the limits set for it by statutory agencies.

He said, “Ekiti is one of the few states that have domesticated FRC and Freedom of Information Law, so we have nothing to hide. FRC and DMO have set certain limit for borrowing and Ekiti has not gone beyond that. So, the borrowing by this government was done in consonance with the international best practices.

Shedding more light on how the N20 billion bond sourced from the Capital Market was expended, Kolawole stated that the money was not spent on recurrent expenditure but on projects that were regenerative and revenue yielding.

He added: “The  Moribund Ire Burnt Brick  that would employ about  300 people was resuscitated. The once bushy Ikogosi Warm Spring has been redeveloped to international standard and is now worth over N3 billion if put in the Capital Market, aside the employment opportunities it has provided for citizens of the state. It is not borrowing that is the issue, but how the Government could use it to crystallize or jumpstart the economy is the real thing.

Aina expressed dismay with the the manner at which the federal agency created the impression that Ekiti become insolvent through indiscriminate borrowing

Aina , who is a  former Commissioner for Finance under the Adeniyi Adebayo administration maintained that the present government is very much committed to financial discipline and would continue to run the State in the most prudent way.

He assured that government will continue to pay the “salaries of workers as and when due” and as well discharge other statutory obligations to the people of the State.

Aina also revealed that Ekiti is one of the five states of the federation and the only one in the South West to set up Fiscal Responsibility Commission saying the gesture is an evidence of readiness to entrench probity, transparency and accountability.

Last modified: September 8, 2013

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