The Akwa Ibom State government owed commercial banks N64.5 billion when Udom Emmanuel took over from Godswill Akpabio as governor, the state Commissioner for Finance, Akan Okon, has said.
Mr. Okon who spoke, Wednesday, in Uyo during a conversation on #ProsperityWithoutOil, organised by the Independent Newspaper Publishers Association, said the state government decided to restructure the debt into federal government bond so as to lessen the burden of servicing it.
“The loan was to be repaid within a period of three years, and the debt servicing obligation was in the region of N3.5 billion every month.
“Given what is on ground now, if we receive N7 billion monthly and pay out N3.5 billion, what is left won’t even be enough to do anything,” Mr. Okon said, adding that Akwa Ibom’s monthly revenue from the federation account in the last 10 months wasn’t up to one-sixth of what it used to receive some two to four years ago.
He said the window provided by the federal government bond allowed the state to pay back the loan in 20 years.
Even at that, Mr. Okon said, “Our cost profile today is much higher than five years ago when we used to receive between N25 billion to N30 billion (monthly)”.
“But we are able to use it and the Internally Generated Revenue (IGR) to make sure that workers salaries are paid.”
Both Mr. Okon and Mr. Emmanuel had served in Mr. Akpabio’s government, though briefly. Mr. Okon was finance commissioner, while Mr. Emmanuel was the secretary to the state government.
The focus of the present administration, according to Mr. Okon is to block leakages, shore up the IGR, and pull the state economy away from being dependent on oil money.
“We are blessed with very arable lands that we could grow agricultural products year in, year out. Take for example, the price of crude oil is $40 per barrel, and the price of palm oil is $90 per barrel as we speak today.
“Akwa Ibom in years past used to occupy fourth position, nationwide, in cocoa production.
“The government is today doing everything to encourage cocoa farmers to increase the area under cultivation, because we believe we can earn foreign exchange in this area,” the finance commissioner said.
The commissioner also responded to public criticism against bank loans so far collected by the current administration.
“I don’t know why we are afraid of loans. It is important we think outside the box. There is no money as it used to be before. Salaries take 70 per cent of the state’s monthly allocations from federation account.
“We need money for road construction and other projects. Even in the United States, government takes loans to finance government businesses.”
