FG Bailout: It’s Postponing The Evil Day –Odumakin | Independent Newspapers Limited
Newsletter subscribe

Cover Choice, POLITICS

FG Bailout: It’s Postponing The Evil Day –Odumakin

Posted: Jul 12, 2015 at 12:00 am   /   by   /   comments (0)

Yinka Odumakin is the Spokesman of Afenifere, the Yoruba socio-cultural organization. He thinks the Federal Government’s bail-out fund is a waste because it won’t be able to solve the problems of the distressed states. Excerpts…



Do you think the Federal Government’s recent approval of bail-out funds to some states is morally and financially justified?

The first question that the federal government should have asked these states they want to bailout is what they did with the money they collected. Some states owe about eight to nine months salaries, was it that they did not collect their allocation? It’s like giving a child money for school fees and he goes to gamble away the money. And then, he comes back to ask for another school fees. Once you give him, the same thing will happen to the money. But because many of these funds went into elections, we are not in the position to ask them the right questions at the moment. But be it as it may, what has just happened, i.e. the bailout fund is just a waste of time.

It cannot solve any of the problems. The N804.7billion that they are taking from the excess crude account, federal government will take 50% of that money. Oil producing states will take 13%, what is left will be very small. There is no state that can get more than N2billion. There are states that owe N35billion in arrears in salaries alone. There are those that owe N24billion, so what are we going to share next month? This is where the problem is. The bailout is not sustainable. We are just postponing the evil days. And we have just wasted what is left in the treasury. Now they say they have also created a loan facility with the Central Bank of Nigeria. I can tell you that any governor that takes that money is no longer a governor. This is because, once they take that money, it means that it is the CBN that runs that state.

They are going to vet what you do so that you don’t mismanage their funds. It’s like when CBN bailed out Oceanic Bank, did Ibru remain Managing Director of the bank? No, she was removed. So this is what will happen to these states governors if they take that money.  Now they say that they are going to reschedule the loans. A state like Osun State has extended its loan to seven years. The effect on the economy from all these goes like this: the commercial banks that gave these states money, used depositors money as loans to these states. Will they now go and tell their depositors who gave them money on short term basis that it is now long term just because state government decided to extend their loan? So from here, the problem will ripple down to the pocket of the common man on the street.

What do you think is the solution?

We have a solution and we are running away from the solution. What is clear today is that this current structure that we are using has reached its limits. There is no way out of this sharing. Except we change the constitution and allow states to process the necessary resources in their soil so as to create other corridors of prosperity, we cannot solve any problem.