John Ayuba, Kaduna State Commissioner for Finance in the government of the late Governor Patrick Yakowa, debunks insinuations that his late principal emptied the treasury and left the state in debts, among other issues, in this interview with Special Correspondent, COLINS OSIGBEME
Allegation of Yakowa leaving Kaduna in debt
John Ayuba
First, I want to say that I believe that governance is a continuum. The process of governance doesn’t stop at all, and that is why you could see that 24 hours after Patrick Yakowa’s demise, a new governor was sworn in. Second, I am yet to see a government in the world today that has not borrowed or doesn’t have a debt. Borrowing or indebtedness per se is not bad. The issue is the application of that debt. The utilisation of the proceeds of that debt is very critical.
Once you took the money and it was used for the purpose it was meant, once the purpose is well-conceived, it becomes wrong for people to see anything bad in debt. Also, your debt/service capacity is critical. So you really have to talk and look at things from the financial angle. Once your debt repayments are not such that they are strangulating the economy, it means you are okay to borrow. The next thing is to ensure you use the money on the project intended. When I became the Commissioner for Finance, a lot of people came to me within the first two months, saying that they learnt the previous government left huge debts and that we were struggling to survive. They said they wanted to know the true position of the debt profile of the state. I came out and told them that the debt profile of Kaduna State was sustainable. Even today, I still believe that it is sustainable. I know that because we never defaulted in the repayment of any of our debts – principal or interest – the Kaduna debts have been sustainable, before Yakowa, with Yakowa and even after Yakowa, which is the true position. The Debt Management Office (DMO) of the Federal Ministry of Finance clears any state that wants to borrow, and it can attest to that. We got clearance from them before we borrowed.
Kaduna debt under Yakowa
The true position is that the Yakowa government, during my time as Finance Commissioner, took only N20 billion loan from the banks. This was less than 20 per cent of the total debt stock of the state at that time. At the time I left office as Commissioner for Finance, about 50 per cent of that loan had been repaid, with over N3 billion cash left in the project account. That money was strictly for capital projects, and no kobo went into any recurrent expenditure.
How did we arrive at borrowing N20 billion? We sat down and looked at what the state was getting from the federation account as well as from VAT (value-added tax) and he took a decision that out of the money we were getting from the federation account, he was going to dedicate the whole proceeds from VAT to only capital projects. In fact, he jokingly said that even if salaries would be delayed, he would make sure that VAT exclusively went to capital projects. He also decided that all internally-generated revenue (IGR) should go to projects. So, we had two sources of funding capital projects because without capital projects, there would be no visibility of any government activity. Once he took that decision, we put together how much we were earning as IGR and how much, on average, the state was getting from VAT. It gave us a monthly figure of what we were getting. The option was to wait for every month and apply the money to capital projects when they came in.
But when you do that, you will not benefit from the multiplier effect of quick development. I then advised that since we were certain that this money would come at the end of every month, we could project what would accrue to the state over a three-year period since his administration was for a four-year term. We could then design projects that this amount would cover, roll out these projects with this amount and be sure that we had the money to comfortably cover them. This was to ensure that once these projects were started, they would be completed without any break. Most of the projects had a completion period of between nine months and two years. He chose the projects because his desire was to ensure that every part of the state benefited from that N20 billion.
We decided that the ones that could be completed within a year, we would pay for them completely and then concentrate on the ones that would take two years. The expectations also was that by the time we were done with the one-year projects, we would have repaid about 60 to 70 per cent of the initial loan of N20 billion. Now, we could go back to the banks and further ask them to extend or roll over a portion of the repaid amount to fund the extended projects based on the amount required. This would ensure that we completed all these capital projects by then end of 2014 and the loan fully repaid before the end of his first term of office by May 2015.
At the time I left office as Commissioner for Finance after the death of Yakowa, almost half of that money had been repaid and we still had over N3 billion left in that dedicated project account.
But certainly, I can confirm to you that the Yakowa government never over-borrowed. The amount of money that was borrowed was being serviced as and when due. The late governor was a prudent person.
Interest in politics
I don’t think that is correct because I was involved in subterranean politics, even before Yakowa called me into his government. It is just that his calling me to join his cabinet as Commissioner for Finance projected me politically by giving me more visibility. Every man is a political animal. Even the mere fact that I always voted means that I am involved in politics. I can tell you that I am a card-carrying member of Peoples Democratic Party (PDP) and a member of the Southern Kaduna PDP Elders Unity Forum. We are contributing in different ways in galvanising support for the PDP in the state. I am also involved in politics in my local government as a major stakeholder.
Southern Kaduna’s threat to dump PDP for APC
I have heard and seen a few people, some founding members of the PDP, who said they want to experiment with another political party. In the PDP, we are united under one God, and that is why every ethnic nationality in the country is represented in it. To be honest with you, most of the good things that we have gotten in Southern Kaduna in the last 14 years of PDP are because we belong as a bloc to the PDP. I can tell you that we had played opposition politics in the past in Southern Kaduna. There was a time we were in NPP (Nigeria Peoples Party), during the time of Pa Solomon Lar of blessed memory when NPN (National Party of Nigeria) was the national party then. Our fathers played the UMBC party politics of the First Republic and we have the experiences to tell. So it is a deliberate choice of southern Kaduna to play mainstream politics now. And based on history, whenever we played minority politics, we lost a lot of benefits that could come our way; but within the last 14 years of belonging to the mainstream politics, things have been going well for us. Southern Kaduna people are in mainstream politics, and for our few brothers who have decided to experiment with new parties, when they find things not working for them, we will welcome them back, though we advise them to remain in the family.
I agree that we in southern Kaduna have been giving bloc votes in all elections since 1999. Opposition parties have already shown interest in the southern part, hoping to utilise the unique voting pattern of the zone, but when the candidates of the PDP emerge, we will sweep others away. Majority of the people in this country know that the PDP has been creating more unity and economic growth and that is what the country needs now more than ever.
