By Valentine Obienyem
Often some people who are not experts in finance and statecraft question the rationale behind savings which Obi embarked on out of mischief, display of continued opposition, hatred or pure ignorance. I often express surprise at their viewpoints, because even among animals, we see the practice of saving for tomorrow out of today’s surplus. However, among the human family, we need not save only when there is surplus. If, for example, one plans to buy a car next year, would one not start saving money for that? Savings is about planning and, as Obi always said, “If you do not plan, you have planned to fail.”
As for those in the habit of arguing against what they do not understand, I hope you will commend the debt burden that will weigh Anambra down as revealed by Prof. Charles Soludo. May I present to you the rationale behind Obi’s savings in the State as he himself explained.
These are the reasons he is qualified for leadership at any level. In fact, we need such a man for Nigeria to re-discover herself.
Obi’s explanation why answering query from the CLO
- 75 BILLION HANDED OVER: On the issue of N75 billion left in cash and investments, let me reinstate that this is absolutely correct, properly documented and can be scrutinized by anybody that wishes to do so.
However, the CLO’s question is on the 156 million dollars in denominated bonds, which is today valued at about $200 million dollars (over N70 billion), said to have been left or invested. On this I wish to state categorically that the amount of 156 million dollars being future savings for and on behalf of Anambra State was made as follows;
a. WITH FIDELITY BANK PLC – $ 56 MILLION
b. WITH DIAMOND BANK PLC – $50 MILLION
c. WITH ACCESS BANK PLC – $50 MILLION.
And I want to state at this point that those funds, being long-term investments backed by law, if they are still available in the banks, and I earnestly wish they are, presently should be worth about $200 MILLION as stated in the CLO inquiry. The reasoning behind savings in Foreign Currency was necessitated by a number of issues as follows:
a. After our study of the Chinese phenomenal achievements as we were coming to the end of MDGs, we learned that the Chinese Regional governments were able to attract a number of investments because of the ability to contribute or partner with the investors in setting up productive facilities within their regions. For example, some of them effectively made equity contributions of 10 – 20 %, which they were able to achieve due to their robust savings.
b. So, our calculation was that if the state would be able to save a particular amount ($18 – 20 million dollars) as we did in eight years, up until 2030 at the average interest rate of a little over 6%, we would be able to achieve about a billion dollars in savings and earnings. We would then use about 50% of this amount to attract investment, considering that the average Chinese Small and Medium scale Enterprise, SME, for example, was set up with about two million dollars. Our goal was that if we would be able to invest 25% in each enterprise, which is $500,000, we would be able to achieve 1000 SMEs facilities scattered all over Anambra State, which would jump start aggressive economic growth within the state, especially as income from oil is coming to an end.
c. Additionally, we were seeking a 40-year non-interest loan of $120 million from the World Bank, especially targeted at supporting Science, Technology, Engineering and Mathematics (STEM) education and tackling our devastating erosion problem. The idea of $40 million education loan was hatched based on the United Nations report that there would be about 20 million jobs vacancies in the fields related to STEM studies by the year 2020, and having critically observed our solid achievements in education, the World Bank readily agreed to provide this facility while the $80 million was to effectively tackle the erosion menace around the state.
Even though the World Bank approved the $40 million dollars for Education and initial $40 million for erosion, my administration did not draw down from it. These facilities were to kick-start with the incoming government and we were certain that savings in foreign currency would help the state in meeting up with her obligations of payment without any impediment to her financial stability. This is because we would have so much still left after meeting with the obligations.
Since we are going to pay this money in the future, we carefully projected and started saving. Because we are going to earn a billion dollars by the time the loan matures; $500 million will go to these SMEs, $200 million will go to others, $300 million will be left. Everything being equal, by 2050, we will be hitting almost $2 Billion. Meanwhile, we have 1,000 SMEs out there, of which about 80% of them would survive, and if they do, shall be producing for export that would change the state.
Unfortunately, we live in a system where people do not think about tomorrow and do not plan for future generations but would prefer to obliterate accumulated income and put the state in debt before exiting office.