By Archibong Jeremiah
The controversy surrounding the plan by Cross River State Government to issue a 40Billion Naira Bond to reschedule its debts has refused to etiolate as Hon. John Gaul, member Cross River State House of Assembly, representing Abi State constituency and member of the G17 is still explaining that their reason for asking the Speaker of the State House of Assembly, Hon. Larry Odey to resign was not connected to the Bond but due to poor communication with members of the House who are not part of the principal officers.
A group of Cross River lawmakers under the G17 had requested the Speaker and other Principal Officers of the the House to resign for not carrying them along in the decision to ratify the request of the Executive to issue the Bond.
But John Gaul in an interview with CrossRiverWatch denied that the notice of resignation was because of the Bond.
According to him, “The G-17 lawmakers feel that the leadership of the House is not carrying us along, we have no conflict before now; we are neither quarreling nor fighting, we never made any attempt to impeach the Speaker because every impeachment process begins with an impeachment notice which wasn’t given”.
As to why the G-17 lawmakers asked the Speaker and his Principal Officers to resign he said, “Some of the issues are – Why is it that our library is not updated? Why is it that when there is no light, the office hours are so short? How come we sit very late? How come some of the bills have not been passed? How come some private communication from the Governor comes to us very late? How come we don’t get to know what we are supposed to do? We need to have more executive sessions etc. but most importantly, they are all centered on our welfare.
“The crux of the issue is that we have poor communication with the leadership of the House, we were not told that we were to sit on that Thursday (the day the House passed the 40Billion Naira Bond) and some of us had the impression that because of the voters card exercise we won’t sit. If an sms or call was placed by Mr. Speaker or Clerk of the House, we would all have been there.
“The impression members of public had was that we opposed the leadership for frivolous reason which is wrong, the resolution is not important than the law, why they took the resolution was because there was no law in front of us to amend.”
While justifying the Bond, Hon. John Gaul explained that, “Every budget process is funded by various chapters; federation account, internally generated revenue, international development funding among others, within the budget we contemplated to borrow money to fund this process, before now Cross River State in 2002 passed the first law which provides for a debt security by creating a floating charge, following up from there by 2005 we approached the Central Bank of Nigeria and collected 120 Billion Naira to fund Tinapa; from that Bond we also collected another loan from Union Bank of Nigeria and other banks, interest from that loan and others raised to 80-something Billion Naira.
“This Governor coming in 2007 tried to float the Bond but wasn’t possible because our debt profile is too high. Also we did not have the financial capability to approach anybody to borrow money, now the Governor decided to have an internal funding system within. Then the governor came up with a creative idea that there is need to get Tinapa working by bringing in Asset Management Company of Nigeria, AMCON and the Governor was able to persuade them to buy off Tinapa’s debt, they were able to take out 60-70% of Tinapa’s debt and agreed to help us off set part of the Bond, at a point they were deducting about 800 million Naira per month from our federation account.
“When AMCON took off about 70% of the debt and left us with something manageable; the state government looking at it that we need to free ourselves of this dead body, the Bond is issued for two circumstances; to borrow money and to restructure the debt. The government decided that we should create a law that will provide debt security, instead of carrying land, houses, Tinapa, treasures of the state as collateral for loan, it is better to have an instrument of government in the form of debenture certificate as an opportunity to re-negotiate our loan and reduce the interest rate, to take care as security for loan which led us to creating the Cross River State Bond Law which states that all our loans/security are protected by an instrument.
“For the purpose of the Bond, we have issued a legislative certificate of 40 billion which is not a request from any bank or from the capital market, all we are saying is that our debt is valued at this rate, rather than pay our debt within one, two three months or as the case may be, we negotiate it, the state government is not borrowing a dime.”
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