Never too far away from storms, state governors are swimming in a new tide of financial controversy. At issue is the alleged payment to consultants by state governments from the London-Paris Club loan refund. President Muhammadu Buhari set the ball rolling last year by attempting to bail the states out of their insolvency, a quagmire illustrated by the non-payment of salaries and pensions. It is, therefore, sickening that governors are denying the people the benefits of the intervention.
Out of the first tranche, N19bn was allegedly paid to some consultants, while others have yet to be paid. The Economic and Financial Crimes Commission, which is investigating the deal, reportedly traced N3.5bn to the aides to a senator, who is said to be a former governor. This is shady, if part of the refund was paid out this way.
The matter is, however, becoming messier by the day. More consultants are showing up and making bogus claims, with allegations that some governors have used proxies as consultants. According to court records, a consultant is claiming N53.6bn from the 36 states as outstanding fees. Some state governments are also said to have put forward their own consultants. Some states are said to have even agreed to pay the consultants as high as 20 per cent of their entitlements. This is not how to manage public finances. Lack of accountability, such as this, is the reason why Nigeria is hobbled by underdevelopment.
The refund came about when governors complained that their states were excessively debited for external debt service between 1995 and 2002. A figure of $6.9bn was originally computed. This prompted Abuja to release the first tranche of N522.74bn to the states in December 2016, pending reconciliation. Curiously, governors proposed that the reconciliation be done through consultants hired by the Nigeria Governors’ Forum.
It is disturbing that the Debt Management Office, the Federal Ministry of Finance, the Accountant-General of the Federation and the financial and legal advisers from each state, which are statutory bodies for such verification, were not engaged for the reconciliation.
Although the Federal Government cannot dictate how federating units should spend their funds, the payment to external consultants is against the spirit of the release of the refund, which is principally to settle arrears of salaries and pensions at the state and local government levels. Last week, a media report said 12 states still owed salaries, in spite of the refund. Some of them owe up to 12 months. It is thus double jeopardy for workers at the state and local government levels.
It is worrisome that, despite the recession, state helmsmen have yet to learn any lessons in elevated governance and global best practices. What will force governors to change their warped ways? No fewer than 10 former governors, some of them currently serving as senators, are being investigated or tried by the EFCC over allegations of financial crime amounting to more than N100bn.
The list includes Senate President Bukola Saraki, Joshua Dariye, Danjuma Goje, Theodore Orji, Babangida Aliyu, Sani Yarima and Godswill Akpabio. Caught in the same web are Abdullahi Adamu, Adamu Aliero, Sule Lamido, Sam Egwu and Saminu Turaki. An incumbent governor has been linked to the diversion of N4.7bn out of the $2.1bn voted for buying arms to prosecute the Boko Haram war under the last administration. There is more.
In March, a former governor of Adamawa, James Ngilari, who was in office for only seven months, was convicted on charges of fraud. In 2012, a former Governor of Delta State, James Ibori, was jailed for 13 years in the United Kingdom for money laundering. The late Diepreye Alamieyeseigha and Lucky Igbinedion were convicted of corruption. Orji Kalu and Rashidi Ladoja are yet to extricate themselves from this mire.
Little wonder, therefore, that governance is a mess at the state level in the country. Yet, the states are supposed to play a critical role in the development of the country. The way out is not to ignore infractions by governors. In the United States, governors pay a hefty price for corruption. Take the case of Robert Bentley, who resigned in April as Governor of the State of Alabama after pleading guilty to two charges of misdemeanour, including having an affair with his aide. In spite of being nominated for the Nobel Peace Prize for overhauling Illinois’ problematic criminal justice system, Governor George Ryan was convicted of fraud in 2007 in relation to steering lucrative state contracts to friends and government insiders, who gave him and his family vacations, gifts and cash.
Corruption in public life is reprehensible. When those entrusted with managing public finance abuse it, the country remains underdeveloped. For that reason, Buhari and the EFCC should get to the root of this mess.
