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Members of the Press,
I am constrained to react to various
comments credited to Gov. T.A. Orji in
the media on the financial crisis
rocking Abia state especially claims of
inheritance of debts from his
predecessor in office.
I happened to have had the privilege and
honor of serving Gov. T.A. Orji as his
first commissioner for finance and
economic planning for about 12 months
before moving to the education ministry.
Obviously there is need to set the
records straight as a professional who
played a major role in the management of
the state's finances both as Banker to
the state government for about 6 years
and as commissioner for finance and
economic planning.
Between 1999 and May 29, 2007, the state
government maintained its major accounts
with the defunct Hallmark bank plc and
later Bank PHB after the banking
consolidation exercise
concluded December 31, 2005 as well
as one and only loan account of
N2billion (two billion naira) taken from
GTBank for the payment of major
contractors during the tenure of Dr Orji
Uzor Kalu.
The Abia state government paid off all
its outstanding overdraft by netting
same off with credit balances in some
state parastatals' accounts, notably
that of ASUBEB and moved to Bank PHB on
a clean slate.
At the time Gov. T.A. Orji took office,
the overdrawn position of about N1.7bn
(one billion seven hundred million
naira) with Bank PHB had been cleared on
receipt of the statutory allocation of
the state. The existing overdraft was
renewed to enable government avoid
financing gap and pay salaries,
pensions, subventions, security vote and
sundries, thus creating fresh overdraft
at the inception of the administration.
The N2bn (two billion naira) loan from
GTbank was also completely liquidated as
it was processed to terminate with the
administration that contracted it.
Apart from the outstanding foreign loans
which pre-date the Orji Uzor Kalu
administration and for which deductions
continued unabated from statutory
allocations as well as excess crude
proceeds due to the state to refund
surplus states whose resources were used
by the federal government to obtain debt
relief and exit Paris and London club
creditors. The records are available at
Debt Management Offices Abuja and Debt
management unit of Abia state ministry
of Finance and Economic planning.DMO
officials from Abuja even made a
presentation of Abia state's external
debt profile complete with history,
dates, projects and servicing
information at my invitation as state’s
commissioner for finance and economic
planning.
It is true that as a new
administration, there was need for funds
for the state Governor to make impact
and deliver dividends of democracy to
the people but he was rather impatient
and exerted so much pressure against my
professional advice to embark on short
term borrowings that led to the current
financial crisis facing the state. what
the state needed was longer term funds
and the only source was through the then
emerging bond market. We were working
with the Debt management office, Abuja
and were getting technical
input/assistance from them. Before we
could make any meaningful
progress(following due process)the
Governor had authorized short term
borrowings from local banks and within
six months our local debt portfolio had
hit N11.8bn(eleven billion, eight
hundred million naira).I raised alarm
and discouraged further borrowings at
every available opportunity as the
impact of servicing these debts , over
reliance on statutory allocation ,
monumental revenue leakages and huge
running expenses made payment of
salaries and subventions a protracted
struggle. These naturally led to my face
off with the Governor and by the time I
resigned from government on 19th
of January, 2009, the state was owing
various local banks over N18bn(eighteen
billion naira).The rest is history.
Records are available and the veracity
of some of the governor's claims of
inheritance of debts and payments to
perceived political godfathers are
verifiable in the public domain using
appropriate financial surveillance
agencies of government who are empowered
by law to have unrestricted access to
financial records of every strata of
government. The truth is
incontrovertible no matter how hard we
try. I decided to put these facts on
record, so that it becomes easy to know
who is fooling who.
Because of my role as a member of the
Abia state executive council then, I
could not but explain and put records in
the right perspective.
"A lie gets halfway around the world
before the truth has a chance to get its
pants on. "Sir Winston S Churchill.
This piece is contributed by Hon.
Richard C Harrison, FCA, FCIB, MBA
Richard. C. Harrison
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