In this report, ETIM EKPIMAH examines issues generated by Akwa Ibom State Government’s industrialisation bid
On assumption of office, the Akwa Ibom State Governor, Udom Emmanuel, made no pretentions that his administration would drive the development of the 29-year-old state through intensive capital projects hinged on raising capital through various financial windows. Although this path to socio-economic development had been criticised by some citizens of Akwa Ibom, the governor, who is a chartered accountant, said the decision to engage in the financial reengineering of the state was a well-thought-out decision of his administration – having considered all options available. Indeed, to the governor, loans provide an opportunity for every serious establishment to engender development and maintain liquidity.
To give teeth to the financial policy of his administration, Emmanuel, on August 18, 2015, sent a request to the Akwa Ibom State House of Assembly, seeking approval for the conversion of the commercial bank loans obtained by the administration of the immediate past governor of the state, Godswill Akpabio, into Federal Government bonds. The request of the governor was read on the floor of the parliament.
The governor had said the measure would facilitate fiscal stability and provide an avenue to liquidate the state’s debt stock to cover a period of 25 years.
“In order for Akwa Ibom State to join other states of the federation and take advantage of this initiative, it becomes necessary for the state to partner with the Debt Management Office of Nigeria and the Federal Ministry of Finance on this directive to utilise the benefits,” part of the letter read.
On September 29, 2015, the AKHA approved N10bn for the state government from the proceeds from the Excess Crude Account. This was sequel to a letter dated September 25, 2015, by the governor, seeking the approval of the House.
The letter which was read on the floor of the House by the clerk, Mrs. Mandu Umoren, was introduced to the House by the member representing Esit Eket/Ibeno, Mr. Usoro Akpanusoh, of the Peoples Democratic Party. According to the letter, the loan would enable the state government to invest in infrastructures and other projects like roads, drainage, flood control, etc.
Apart from the October 9, 2015 N1bn agriculture loan, which the House had also approved, others include a N600m loan to enable the state government pay its counterpart funding of 20 per cent for the payment of Millennium Development Goals, a March 3, 2016 N1.490bn loan to enable the government repay its debt to Akwa Savings and Loans Limited as well as a N1.938bn for the payment of the state’s counterpart funding to the Universal Basic Education programme.
The AKHA had also on March 31, 2016 approved a loan of N5bn to the government for the completion of various capital projects and also N10bn ‘guarantee loan’ for the state government to guarantee contractor’s finance scheme to Wizchino Engineering Limited in order to enable the contractor progress with the work on the Etinan-Ndon Eyo dual carriage road. But, the Commissioner for Finance, Mr. Akan Okon, explained that the N10bn the state government was seeking was not actually a loan, but a guarantee for the contractors handling road constructions in the state.
He had said, “There is a difference between taking a loan and being a guarantor. The true position is that government did not take any loan but only stood as a surety for the contracting firms handling road projects in the state to avoid variations in contract sum and unnecessary delay in job execution.”
According to Okon, the contractor is the one taking the loan to finance the road projects, pending when his money would be paid by the state government. He added that the state government embarked on this move in order to ensure that the construction of social infrastructures like roads, drainages, schools, hospitals etc did not suffer because of paucity of funds.
He urged Akwa Ibom people not to worry about government taking loans to undertake developmental projects that would benefit the people.
According to him, the state was not isolated from the effects of dwindling oil price and global economic recession, adding that there had been a significant reduction in the revenue accruable to the Federal Government and various states. Specifically, he said that Akwa Ibom now receives one-sixth of what it used to receive as federal allocation some three years ago. Okon explained that 70 per cent of the state’s monthly allocation was being used to pay workers’ salaries, maintaining that this challenge should not debar the state from witnessing infrastructural development.
“I don’t know why we are afraid of loans. It is important we think outside the box. As a result of the global economic recession, there is paucity of funds than we used to have before. Even the United States of America takes loans to finance government business. This government is very responsible when it comes to financial issues. We have initiated Contractor Finance Programme. You know the governor is a first class financial expert, who had worked at the very highest level at Pricewaterhousecoopers, Zenith Bank, among other top financial institutions,” he said.
Okon also defended the planned establishment of an automobile assembling plant in the state saying, “If you know the number of vehicles that are imported into Nigeria every year, then you will know we are exporting labour to other parts of the world. The automobile assembling plant is in order. It is mainly for assembling luxurious buses and other vehicles for transportation companies and as I speak, the first consignment for the company has arrived.”
Asked if the present administration was interested in completing the projects left behind by previous administrations, he stated, “We are doing housecleaning and computing figures on how much have been expended on projects and how much would be needed to complete projects.”
Though, the head of Ikot Ukap Itam village, Chief Ibok Udo-Akpan, said the community’s source of water was disrupted when the government was clearing the land for the automobile plant.
“Everybody in this village is now crying of hunger, our farmlands have been destroyed. Food items like garri and vegetables have shot up. We no longer have water because in the cause of clearing the land, our only source of water was blocked. Also, our source of fetching sand for building was blocked. Now, we go to a nearby community, which is many kilometres away, to fetch water,” he said.
Udo-Akpan said the government had initially asked for five hectares of land but ending up getting 20 hectares without signing a Memorandum of Understanding with the community.
But a member of the Peoples Democracy Party from the area, Mr. Eyo Bassey, applauded the government for its foresight in establishing an automobile assembly plant in the area. He added that the effort, apart from diverting people’s attention from oil, would create employment for the teeming youths of Akwa Ibom.
He appealed to landowners to be appreciative of government’s efforts and noted that all those who donated their land for the automobile assembly plant would soon benefit when the plant begins operation.
“We cannot get these things overnight, they involve various procedures. We have to be patient with the governor since he has started the move to set up this automobile assembly plant in our area,” he said.
Some of the projects the Udom Emmanuel-led administration inherited from the Godswill Akpabio administration include the Eket-Ibeno Road, Etebi-Enwang Bridge, Ikot Ekpene-Umuahia dual carriage road, phase II of Ibom stadium, phase II of Ibom road, Science Park, Ibom Tropicana and Entertainment Centre, the Ibaka Deep Sea Port and Ibom Industrial Estate. The state government has continued work on the inherited projects.
After ascending the seat of power, Emmanuel initiated a groundnut processing industry, a refinery between eastern Obolo and Mkpat Enin and an automobile assembly plant in Itu.
The Commissioner for Special Duties, Mr. Etido Inyang, said people needed to understand industrialisation procedure in order to appreciate the efforts of government towards putting the state on the path of industrial prosperity. He added that it was unfortunate that people criticised the governor for the delay in the commencement of the automobile manufacturing plant without realising when the government got the licence to operate the plant.
The commissioner said, “If you are getting a loan from international banks, they need an Environmental Impact Assessment study that would approve the impact assessment on the area. Unfortunately, people criticise the governor for the delay in the commencement of the automobile manufacturing plant without knowing that when that groundbreaking ceremony was performed, we had not got the licence yet and we were almost cut off without the licence because immediately we got the licence, they stopped the issuance of further licences.
“So, now that we’ve got the license and the EIA has been done, the issue of forex and the current situation in the country are the challenges arising. But with the vision and the passion of the governor, we are going to surmount them. So, within our one year stay in office, people should not have the mindset that industries would just emerge. No, industrialisation doesn’t work like that; it is the product of a painstaking, careful and coordinated planning, coupled with the execution of a workable and pragmatic industrial plan. In fact, industrialisation is more difficult than creating infrastructure.”
He, however, added that within the governor’s four-year tenure in office, anyone who comes to Akwa-Ibom State, would marvel at the giant strides of the government, saying that in 2017, most of the industries including the automobile assembly plant would have taken off, while housing and industrial estates would spring up in designated areas. He said, “Before 2019, the world would be attracted to the state. When visitors come to the state by next year, they won’t be able to recognise it.”
Another project being executed by the government is the construction of sport centres in all the federal constituencies of the state. The second phase of the facility is located at Community Secondary School, Nnung Ukot Ikot Itina, Ikot Mbong, Onna LGA. The sport centre is going to be in the same style as that of West Itam Secondary School in Itu LGA.
The Commissioner for Youth and Sport, Mr. Monday Ebong-Uko, said that the project was in fulfilment of Emmanuel’s social contract with Akwa Ibom people. He noted that the project was in line with the governor’s penchant for talent discovery and called on Akwa Ibom people to avail themselves of the facilities at the centres to nurture their talents.
The commissioner, who is also chairman, Akwa Ibom State Sports Council, said that at completion of the first three sports centres across the three senatorial districts of the state, the maiden edition of Akwa Ibom State Sports Festival would be held in the state.
He noted that athletes from the state origin would compete among themselves at the sport festival in preparation for the National Sports Festival.