₦airaland Forum

OSUN State Governor Rauf Aregbesola yesterday took a break from his usual official routine.
He appeared before the Prof. Femi Odekunle-led panel of inquiry set up by the government to investigate the circumstances surrounding the procurement of an N18.38 billion loan by his predecessor, Prince Olagunsoye Oyinlola.
The six-member panel has a mandate to look into other major financial transactions by the government between May 29, 2003 and November 27, 2010
Oyinlola, the National Secretary of the Peoples DemocraticParty (PDP), gave his evidence before the governor appeared at the panel.
Aregbesola said the idea behind the loan was not bad but its timing and application were wrong.
He also said the facility would have been unnecessary if the excess crude oil accruing to the State of the Living Spring had been judiciously applied.
The loan was obtained in the twilight of the Oyinlola administration to finance the establishment of six stadia and other projects
Aregbesola, whose administration inherited the N18.38 billion loan from the United Bank for Africa (UBA) Plc., explained why he renegotiated the facility with First Bankof Nigeria Plc.
He said his predecessor bequeathed unto him a government that was technically insolvent.
Stressing that there was nothing strange in a governmenttaking credit facility from financial institutions, Aregbesola said the way and manner the former governor drew down the loan in one fell swoop was questionable.
Equally disturbing, he noted, was the fact that the funds were lodged in an account with the same bank without accruing any interest for the state.
Aregbesola queried the rationale behind the simultaneouspayment of N615 million interests and charges on a loan which was obtained at the 11th hour of the administration.
He told the panel: “Why was the entire loan fully drawn bythe PDP administration prior to the commencement of projects, even when the construction periods of the various projects for which it was meant were between 12-24 months?
“It is imperative to note that the drawdown of the entire loan once and for all in a single day when the entire money was not required to be utilised immediately was suspect.”
Aregbesola also told the commission that Oyinlola’s actionexposed the government to interest liability for funds not needed and just idle in the bank.
The governor said: “The Oyinlola administration ran foul of simple rule of sound financial management. In exposing the state to huge monthly repayment of a sum of N615 million to service a loan that has no viable meansof repayment and need not to have been drawn down.
“On assumption of office, the state government directed the Ministry of Finance, Economic Planning and Budget to negotiate with the officials of UBA Plc and First Bank Plc which offered to refinance the N18.3 billion loan.
“UBA Plc insisted that the 13 per cent annual interest rate charged was the least it could offer and added that interest rate had gone up generally beyond 13 per cent asat December, 2010 when the negotiation took place.
“However, instead of a downward review of the rate, the bank insisted on 13 per cent interest rate per annum but offered to increase the tenor to 47 months.”
The governor said the unspent balance of the loan was returned to the bank to bring it down to N8.3 billion and that his administration had to shop for a more convenient credit line to pay off the balance and the bankcharges, adding that First Bank presented this convenientcredit line.
He noted that a credit line of N25 billion was offered by First Bank of Nigeria Plc, out of which only N8.6 billion was drawn-down to pay the UBA Plc outstanding loan in three tranches, adding that the approval of the Osun State House of Assembly was obtained in respect of the credit line.
Aregbesola said: “Accepting the First Bank’s offer of N25 Billion credit line will tremendously reduce the pressure placed on the finances of government by the suffocating sum of N615 million being paid to UBA Plc monthly.
“ Even if the whole N25 billion is drawn down at once, the government will only require a sum of N208 million for the next 12 months to service the interest element thus making a savings of N407 million monthly on the amount being paid to UBA Plc.
“ In the same vein, the amount that will be required to service the N25 billion loan, both principal and interest, atthe end of the moratorium period if the whole amount isdrawn down at once is N531 million which is lesser than what is currently being paid on N18.38 billion.
“Since drawings will be based on need, there is no way by which the whole N25 billion will be drawn down at once.
“Consequently, the amount that will be repaid monthly atany point in time after the moratorium period will be lesser than N531.”
His words: “There may be nothing wrong in government taking a loan facility. It is the hasty draw-down at once, thereby exposing the state to cut-throat interest payments on money not needed for utilisation and merely lying fallow in the same bank.”
Aregbesola said there was no way the state could continue to meet its social service obligations in education, health services and security among others without renegotiating the terms of the loan.
“Even though, a credit line of N25 billion was offered by First Bank of Nigeria Plc, only N8.6 billion was drawn-down to pay the UBA Plc,’’ Aregbesola said.
The governor said the N18.38 billion loan would not have been necessary, if the excess crude oil accrual to the state was well managed.
In his testimony, former governor Oyinlola said the financial needs of the state pushed his administration into the procurement of N18.38 billion loan in 2010.
Oyinlola said: “A reduction in the federal allocation to states in 2009, when the crises in the Niger Delta was verypronounced affected oil production, which is the main source of the nation’s economy.”
Besides, the former governor said the issue of new minimum wage and the need to embark on other developmental projects required funds for its implementation.
He said: “At that time, salaries of civil servants and pensions consumed 90 per cent of the earnings of the state and the leadership of the state House of Assembly advised us to take the loan to address germane issues of 2010 Budget.
“As a responsible and responsive government, we took the advice of the legislature, then analyse the projects that would have impact on the lives of the people of the state and arrived at N18.38 billion.
“A memo was taken and passed by excecutive council and approval of the House of Assembly was sought and obtained since it is practically impossible to summon every citizen of the state to take a decision on it.
“The constitutional voice of the people is the House of Assembly, which means the people of Osun took the loan by the approval of their representatives in the House.”
The former governor further said that he lacked power to unilaterally take decision on the affairs of the state.
On the upgrading and rehabilitation of nine Technical Colleges contracts, Oyinlola said: “What informed our decision was the inability of government to provide employment for unemployed graduates.
“We intended to upgrade the colleges so that these jobless graduates would go there and pick a trade and become employers of labour.”
Oyinlola said that the poor performance of students in science subjects and Mathematics made his administrationto award contract for kits for the use of pupils in primaryand secondary schools.
On the six stadia projects, the governor said that it was the youths of the state that called the attention of its administration to the development of sports, during one of the open forum programme organised by his government.
He added that if equality was anything to go by, infrastructural development must be replicated in each ofthe zones across the state.
In his conclusion, Oyinlola said that his intention was to pay off the loan before the end of his tenure.





http://www.thenationonlineng.net/2011/news/61474-i-inherited-a-bankrupt-state-says-osun-governor-aregbesola.html

why you just telling us now.
Why didnt you scream out immediately you to the oath of office.


SMH for our politicains(always blaming the past administration for their own present failures)

All of them are the same thing jor. Mschewwww

18.3 Billion Loan Scandal: “I STAND BY MY DECISIONS AS GOVERNOR” Says OYINLOLA TELLS PROBE PANEL

Former Osun state governor, Prince Olagunsoye Oyinlola on Thursday appeared before the commission of Inquiry set up by the Rauf Aregbesola administration to probe contracts and financial transactions of his government declaring that he had no regrets and took full responsibilities for all his actions.
He spoke as the panel commended
the vision of the former governor in establishing the Osun State University and the openness with which the former governor explained his stewardship in seven and a half years to the panel.
The panel chairman, Professor Femi Odekunle speaking in response to Prince Oyinlola’s submission before the panel, said as a university administrator and teacher himself he could testify to the fact that after seeing six campuses of the university which Oyinlola told the panel was built with N4billion, it was well conceived and executed.
Odekunle also commended the former governor for honouring the invitation of the commission, an action he declared marked him out as a gentleman.
Prince Oyinlola had informed the panel that all actions taken by his administration were in the best interest of the state just as he affirmed that he took great care in ensuring that due process was diligently followed by making sure that the state executive council and the House of Assembly approved such.
He explained that the initial resolve of his government was not to take any loan given the experience of the state with a second republic loan taken for the unexecuted Ilesa and Ejigbo water schemes which had remained an albatross on the state but was convinced by the House of Assembly to shift grounds in other to ensure that the 2010 budget succeeded.
“During my budget presentation in November 2009, the House of Assembly advised me against my position of not wanting to take loans to execute capital projects on the ground of budgetary low performance. We were also encouraged to seek alternative sources of funding by an assurance that refund of excess deductions from Osun State allocation by the Federal government which was then put at about N70 billion would be received. It was based upon the above two reasons that we agreed to obtain the loan to finance the priority projects of Government. The conception was therefore that of the people of the State through their representatives in the House of Assembly. The loan was approved by the Executive Council of the State and the members of Osun State House of Assembly.
“When I said the House of Assembly initiated and approved the N18.3billion loan which my government took, I want to make it very clear that the House was made up of 15 PDP members and 11 ACN members. It was a mixed House and there was no division when those actions were taken by the House,” Oyinlola said.
He added that the application for the loan was written by the Ministry of Finance which negotiated the loan on behalf of Government and adding that he believed taking the loan was the best his government could do during that time of global financial meltdown.
“Disbursement of the loan was done through appropriate agencies of government. It was disbursed on projects as approved by the Osun State House of Assembly to be funded from the loan that was procured also with the consent of the House of Assembly. It is necessary to state that the projects under reference were contained in the Appropriation Law for the relevant year.
The total loan approved was N18.38 out of which a sum of N10.1 billion was spent on projects approved by the Osun State house of Assembly. About N1.8 billion out of the disbursed N10 billion was repaid to the bank, leaving a total of about N8.2 billion as net indebtedness of the State Government to the bank as at the time our administration vacated office,” he said.
Prince Oyinlola said the panel should note that his government after seven years took N18.3billion loan while his successor within its first two months in office took N25billion loan from the First Bank declaring that he (Oyinlola) was a major stakeholder in the affairs of Osun state as his own father was one of the four traditional rulers that won independence for Osun division which eventually became Osun state .
He added that the upgrading of nine Government Technical Colleges with the bulk of the loan was his idea based on his experience during a tour of Israel where he discovered that youth unemployment and dearth of skilled craftsmen could be addressed by implementing the concept. He added that the project, if the Rauf Aregbesola administration had not stopped it two months after it took over, would have met the goal of giving unemployed graduates the opportunity to acquire vocational skills from the institutions.
He however stated that he took full responsibility for two projects that could not be completed as conceived by his administration listing the projects as the Free trade Zone and the state Hotel project. He disclosed that his administration committed N1.5billion to the Free Trade Zone project and N430million to the hotel project but lamented that the private investors who were to contribute 70 percent of the total cost did not fulfill their own side of the agreement while efforts “to use the law” to address problems that arose out of the two projects were on when he left office.
On the wisdom in building six stadia across the state, Prince Oyinlola stressed that he was very conversant with the decision of the founding fathers of the state that each of the six zones of the state must develop simultaneously adding that the same idea informed the multi campus structure of UNIOSUN.
Besides, he said the recent woeful performance of the Nigerian contingent to the 2012 Olympics showed that for Nigeria to get it right in sports, it must provide the right facilities that would develop the potential in the youths.

k2039: why you just telling us now.
Why didnt you scream out immediately you to the oath of office.


SMH for our politicains(always blaming the past administration for their own present failures)

Man wise up, learn from the past.
Remember how issues like that of Faruk, Ibori etc.. Were thrown under carpet, if not for international bodies that took that of Ibori up, I'm sure he'll still be a free man and a guy to reckon with in PDP government.

Aregbe doesn't have to rush to judge or criticize the default of the past administration. If he had taken it up immediately he came in, he wouldn't have known the detail behind this and might even turn out to be used against him.

The question you should ask is, "why didn't he call on the EFCC to intervain in this matter?"
He knows this so called "crime commition(EFCC)" that is always been used by the ruling party to manipulate rising issues, will do the same.

Demdem: Actually, he did. Besides he didnt just wake up called the press and started talking jargons, it was in a panel of inquiry.

He appeared before the Prof. Femi Odekunle-led panel of inquiry set up by the government to investigate the circumstances surrounding the procurement of an N18.38 billion loan by his predecessor, Prince Olagunsoye Oyinlola.

We all know that oyinlola who is now the sec of the killer party was truly a reckless governor. Kudos to Osun people for booting his asss out.

ok

karl max: 18.3 Billion Loan Scandal: “I STAND BY MY DECISIONS AS GOVERNOR” Says OYINLOLA TELLS PROBE PANEL]

The total loan approved was N18.38 out of which a sum of N10.1 billion was spent on projects approved by the Osun State house of Assembly. About N1.8 billion out of the disbursed N10 billion was repaid to the bank, leaving a total of about N8.2 billion as net indebtedness of the State Government to the bank as at the time our administration vacated office,” he said.

Tell it to that goat looking fellow where he kept the balance of the loan as stated by Oyinlola here.

Prince Oyinlola said the panel should note that his government after seven years took N18.3billion loan while his successor within its first two months in office took N25billion loan from the First Bank.

This is a very serious point raised here. U mean Oyinlola really took 18.3 billion in 7 years and this Ogbeni took 25billion in 2months? God, Osun state is presently being raped openly