Why we seek N23b Bond for Projects

Infrastructural requirements by the people for growth and development is a thing that ordinarily government should take for granted but unfortunately infrastructure is something that we have not maintained in the past. This has resulted into the decay which we have today. In the past 20 to 30 years we’ve been building roads, constructing bridges, culverts but we’ve not been maintaining them. In the process they get spoilt and we have to start all over again.

The most critical part of it is that the infrastructural requirement in roads, water, energy, education, health, agriculture is huge. By time we did an assessment of the infrastructural requirement of Kwara State, to bring the State to a fully functional environment with the all the needed infrastructure that will make a State go on normally, we found out that there is a huge gap. To put those things in place, it will cost us about N300billion. By the purpose of things on ground we know that we cannot raise N300billion. But as a government that has a tenured time to stay to drive governance we must see how much of the N300billion we want to do in our own time. That prompted us into looking at the sources of funding. Where are the sources of funding? Of course we know that we get the federation allocation which comes in every month; from where we pay salaries and carry on other recurrent expenditure. Is this enough to do capital projects? Obviously, it is not! It means that we have to look for other sources of funds that will enable us do our own portion of the capital projects. We, then, expect that other governments that will come will continue from where we stop. Until one day, through a successive well articulated transition, Kwara State will gain the benefit of not only getting full infrastructure, but also the build up of one infrastructure over another through successive governments.

For us here, we’ve decided to look at the capital market which is the cheapest source of funds for government for raise money to do capital projects. That’s why we have approached the capital market to raise money. If you go to any organisation that is desirous of improving lives for its people, you will see that it must have access to a large sum of money where it can do capital projects and begin to pay back gradually. That is why we have decided to approach the capital market. Those who don’t know will exhibit ignorance by saying that government is going to borrow money to execute projects. How do you want to do projects without borrowing? I don’t know how. Even the federal government, as it is, issue treasury bills. For those who don’t know treasury bills are a way by which the federal government also borrows money to execute projects. So the State on its own goes to the capital market and raise the bond to do capital projects. They are cheaper sources of funding because the interest rates are lower than when you borrow from commercial banks. I’ve heard a few people making comments, especially I heard an opposition man saying that Kwara State is taking the bond to impoverish the people. People should talk about things they know. It demonstrates ignorance. If you say that taking of a bond to execute well articulated, well marshalled out projects is impoverishing the State, then you are demonstrating that you have no business in this business of governance. You should understand it.

On why the bond funded projects appear to overlap?

When you have capital projects you cost them. The costing will give you a specific figure. For instance, Ilorin metropolis water project was costed at N7billion. There is no way we will be able to raise N7billion in one single bond, except we want to do only water and we don’t do nothing else. But as long as we want to do water; we want to do electricity, we want to do agriculture, we want to do hospitals, then we take whatever we can take, resulting from what we can pay back at that time. And then we jump start the project and the project will now take us to either 10 percent, 20 percent, 30 percent, 50 percent, 60 percent conclusion after which we now take additional money to complete the project. If you have big projects, you need to phase them, they will go beyond one to two bonds. If you take the Ilorin metropolis reticulation projects for stance, the first amount that was designated for that project in the bond was N4billion. That was in the first bond that was taken, the N17billion bond. When you take N4billion, how much do you have left out of seven? You have N3billion. When I came in I took a loan out of which I used N1billion to support the Ilorin metropolis reticulation project. That takes us to N5billion. We have still not completed because we still have N2billion to go. That is why we intend to raise another bond to take additional N2billion and complete the project. When we raise monies it does not mean that the money will take the project from A to Z. Projects will be jump started, then they will be completed as we are moving on. A typical example is the Kaiama-Kishi road. The road is going to cost us about N8billion. We cannot raise N8billion with our current repayment capacity; but what we can raise for that road is N2billion. So we raised and we’ve broken it down into 3 sectinos. Section One; Section 2; section 3. As soon as we take this bond we will start section one which will take us to a third of the road. Repayment is limited to your inflow. There is a limit to which you can borrow money. You cannot borrow all the monies you want. If you can borrow all the I would have taken the N300billion and complete all the capital projects but it is not do able. It is only a function of what you can pay back. So there is no way we are going to impoverish Kwara State. We will take monies, execute projects that will be completed within specific time frame for the benefit of Kwarans. And when we finish we will still live here, because we will both enjoy the projects we are going to do.

I’ve not talked about Share-Oke-Ode, I have not talked about Ipetu-Rore road, I’ve not looked at the Teaching Hospital Road we are trying to expand. These are all roads that require huge funding. So the only way is to access large sums of money, then the title that is coming on monthly basis we will now be repaying back. What I think people should be concerned about is what do we want to spend this money on. We must see it and the benefit must be understood by all. One option is that we can wait and be putting the little money we are getting on monthly basis until the projects get completed may be in 15 to 20 years. That is one option. The second option is that we borrow money and then we keep paying back gradually and then we use the money to complete the project. It is a choice. For us as Kwarans we feel that our choice should be accessing large sum of money, completing the projects in record time, get people to enjoy the benefits of these roads and then we use the monthly inflow to begin to pay back the debt. That is exactly what we are doing. Very transparent.