A 40 billion naira fraud involving the state governor, Emmanuel Uduaghan, former Speaker, Victor Ochei and two Nigerian banks is currently causing a political storm.
Elombah.com has learnt that Delta State Government wanted to borrow 40 billion from banks to finance a phantom Independent Power Project (IPP) at the tail end of the Uduaghan administration, but the banks demanded for a certificate of approval from the federal government.
Delta approached the Debt Management Office, DMO, but the DMO office rejected their request for certified approval because the state failed to satisfy the borrowing guidelines.
Delta State Government tried to circumvent the rule as no commercial bank will lend money to the state without approval of the Federal Ministry of Finance.
They approached Zenith and Access bank through another route for funding.
The established guidelines were made to enable the finance ministry conduct sustainable analysis. This government guideline is part of conditionalities handed down by the Paris club of creditors during the country’s debt rescheduling negotiations to control unreasonable borrowing by states.
Therefore when delta state government applied to the DMO office for permission to borrow 40 billion naira and their application was rejected they became desperate.
They therefore devised another route to circumvent the guideline. They went round the banks and requested they lend the money to state contractors while the State Government guarantees the loan.
Sources say they met more problems here as well.
A finance expert told elombah.com: “in international finance a guarantee is regarded as borrowing, this explains why the federal government is reluctant to give sovereign guarantees, where the country guarantees loans issued to states.”
This is what led to our over bloated debts from the second republic, the expert said.
Elombah.com learnt that in order to protect their interests, the two banks approached, Zenith and Access Banks demanded for a resolution passed by the state house of assembly approving the loan guarantee request.
Information obtained by Elombah.com showed the house leadership quickly passed the resolution upon a request by Governor Emmanuel Uduaghan. However, many members of the state house of assembly that spoke to Elombah.com denied approving the N40b loan guarantee request.
‘We are completely unaware of the entire transaction’, a house member who requested anonymity told elombah.com.
The question on the mouths of Deltans is: who approved the loan and why would an outgoing governor be soliciting for such a hefty figure?
Independent investigations conducted by elombah.com indicated that the fraud may not be unconnected with an N18billion Independent Power Project scandal.
Multiple sources told elombah.com that a 22 billion naira scandal has been hanging on the neck of the state government for some time now.
‘At the inception of this administration an IPP project was awarded to a company controlled by then speaker of the house and now a gubernatorial aspirant, Mr Victor Ochei.
Of this amount, 4.7billion was expended on the now moribund project while the balance of 18billion could not be accounted for.
Elombah.com investigations reveal that accusing fingers are pointed towards Governor Uduaghan and his then House Speaker, Victor Ochei.
our sources also swear that the current haste by the state government to obtain the current 40billion naira loan from Zenith and Access Banks is to kick start the moribund IPP project so as to cover up the fraud by doing a semblance of work on the project to confuse Deltans who have been asking questions as to what became of the 22.7 billion naira contract.
‘Already, a1.5billion naira contract has just been awarded to lay gas pipelines’, Elombah.com was told.
‘The tragedy is that even the gas turbines being imported from Canada is not suitable for Nigeria, so that even if the entire 40billion Naira is now properly utilised, the entire edifice might turn out to be a white elephant project’, a source said.
Independent watchers of this development wonder whether this is why Uduaghan is currently interested in a civil servant rather than a strong boned politician to succeed him.
‘A civil servant may be more disposed to cover your back, and your shenanigans in office, an analyst said.