KWARA State chapter of Action Congress of Nigeria (ACN) has accused the Peoples Democratic Party (PDP)-led government of wrecking the state with its "financial recklessness and corruption", days after the Central Bank of Nigeria (CBN) barred banks from granting further loans to the state.

In what looked like a move aimed at strengthening financial stability and instilling discipline in the banking sector, the CBN recently barred banks in the country from availing further credit facilities to 113 companies and 419 directors/shareholders, including those belonging to Mr. Femi Otedola, Alhaji Sayyu Dantata, Sir Johnson Arumemi-Ikhide, former Power Minister, Prof. Bart Nnaji, Mrs Elizabeth Ebi and Dr. Wale Babalakin among other.

The decision, which also affected Cross River, Kwara and Zamfara state governments also, the apex bank arrived at as a result of the alleged reluctance by the debtors to pay back their loans despite the purchase of the debts at an agreed price by the Asset Management Corporation of Nigeria (AMCON).

In a new circular dated September 17, 2012, the CBN stressed that the restriction would apply to individuals, organisations, companies as well as principal shareholders and directors of companies, where the outstanding value of loans purchased by AMCON amounted to N5 billion or above as at the day of purchase, without regard to the actual amount paid by AMCON.

Endorsed by the bank's Director of Banking Supervision, Mrs. A. O. Martins, the circular stated that, "it has become necessary to stop debtors, who failed to repay their loans to banks and had these loans subsequently transferred to AMCON, from further enjoying credit facilities from Deposit Money Banks (DMBs) until they fully repay agreed outstanding to AMCON."

And in reaction to the development, the party chairman, Kayode Olawepo, said in Ilorin that the CBN hammer was inevitable in view of what his party called the "the financial recklessness and corruption of the immediate past and present PDP governments in the state."

He added "it is interesting that this blacklisting comes amid empty boasts by officials of the state government that the state is viable and is in no financial mess. It is an embarrassing situation, even though it is a case of the chicken coming home to roost. We saw it coming, and had indeed warned against it."

Olawepo said ACN's findings showed that the state was indebted to the tune of N6.8b and was shortlisted for the penalty following its "failure to pay back its backlog of loans, which led to the purchase of the debts at an agreed price by the Asset Management Corporation of Nigeria (AMCON)."

The party called on anti-graft agencies to probe the alleged mismanagement that led to the state being declared unviable by the country's apex bank and bring to book anybody found wanting.

He added: "The CBN circular said the state and others in the same condition have no viable means of paying their loans and so cannot be allowed to borrow again. In other words, the 45-year-old Kwara State is not a viable entity! This revelation confirms our repeated alarm that Kwara State was being wrecked under the PDP government, no thanks to financial recklessness, misplaced priorities and wanton corruption.

The party further stated that  "the fact that the CBN doubts the state's ability to pay back the loan confirms our position that much of the so-called projects embarked upon were unviable and are mere conduit pipes with no benefit to the people of the state, adding "to underscore the recklessness of the PDP Government in Kwara State, while the state fails to pay salaries and cannot pay pensions, it recently set up a committee to celebrate Nigeria's 52nd anniversary in a grand style."

Also, while majority of the people live in poverty, this same PDP-led state government is building a mansion for former governor Bukola Saraki and using state funds to bail out ‘thriving' Shonga Farm, which it once declared as a "private concern," the party further alleged.

"On the contrary, other states that receive comparable federal allocation as Kwara do not have problems paying salaries and have not been declared non-viable by the CBN simply because they have not mismanaged their funds in the way the PDP-led government has mismanaged the funds of the Kwara people.

He continued, "Once again, we call on the PDP government to stop living on a begging bowl, which is responsible for this mess and instead show genuine leadership in order to bring out the best in the people who remain the most potent source of success.

"At the same time, we call on the law enforcement agencies to investigate these allegations of financial mismanagement and to bring to book, whoever is responsible for bringing the state to its knees in this manner. Transparency and good governance demands this and the people of Kwara State have a right to know what has happened to their funds," the state chairman concluded.

But in a swift reaction, Senior Special Assistant on Media to Governor Abdulfattah Ahmed, Dr. Muyideen Akorede refuted the allegations by the opposition party that the state was bankrupt. He noted that securing loans legally could not be interpreted as act of financial recklessness, but a wise step towards investment.

According to him, the ACN allegation was done in bad taste and a calculated attempt aimed at tarnishing the image of the government.

Akorede said in a statement: "We assert that Kwara State remains financially viable and capable of meeting its financial obligations including huge infrastructural projects, both concluded and on-going.

"We assert that the CBN's action was informed by a communication gap, which government is trying to bridge. To set the records straight, the said loan was obtained by Ministry of Finance Incorporated (MOFI), the erstwhile investment body, which is a separate legal entity; to buy shares in an effort to shore-up internally generated revenue (IGR). Expectedly, the loan was subsequently secured against the shares. Also, the outstanding figure includes the principal and interest accrued.

"Unfortunately, due to the stock market crash, MOFI's ability to repay was heavily impaired. Furthermore, the said loan and shares so purchased have since been taken over by Asset Management Corporation of Nigeria (AMCON), which has the option of selling the shares to recover the said loan.

"In addition, Harmony Holdings Ltd, the state's new investment arm, which took over the assets and liabilities of MOFI, is in discussions with AMCON to resolve the issue amicably.

"Although the stock market crash unfortunately affected government's well-intentioned efforts to shore up IGR, the CBN's action does not indicate insolvency.

"The people of Kwara can see our laudable ongoing projects, including the rehabilitation of five general hospitals, massive urban and rural roads, rehabilitation of Federal Government roads, phase 2 of Ilorin water reticulation project, rehabilitation of Pepele waterworks, rural and urban electrification, rehabilitation of 200 blocks of secondary school classrooms etc. These projects indicate that Kwara State is financially healthy.

"The ACN is obviously alarmed by the Ahmed administration's giant strides and is engaged in a futile bid to diminish those life-transforming projects."

Only recently, the state was abuzz with rumours of a rift between Governor Ahmed and his predecessor, Bukola Saraki. Among others, the financial standing of the state and the application of her resources by the immediate past administration are some of the issues that were alleged to have brought about the face-off between the two.

But their aides were quick in dismissing the rumours insisting that both past and present governors were enjoying a cordial relationship as well as shared vision of a thriving Kwara State.

On that occasion, Akorede had countered the alleged dispute as a figment of imagination of the opposition, insisting that the relationship between Ahmed and Saraki, rather than wane, remains cordial and strong based on their long association and shared vision of a prosperous Kwara State.

Specifically, Akorede, who said the situation in the state was unique, due to the peaceful transition from the previous administration to the current one, added that Ahmed's decision to scale up laudable programmes initiated by his predecessor were an eloquent testimony to the benefits of continuity. This continuity, he said, continues to elude other states in the country and remains the bane of sustained development in the country.

The governor's aide said his principal, rather than pay heed to discordant tunes remained focused on economically empowering Kwarans and growing the state's economy through robust programmes like his administration's Shared Prosperity Programme (SPP).

He restated the governor's determination not to be distracted by the antics of the feeble opposition in the state, calling on the people of the state at home and abroad, to ignore their antics, which he said, were designed to sow seeds of discord between the incumbent and his predecessor.

"Ours is a unique partnership based on mutual respect, which grows stronger daily due to our long history and standing commitment to making Kwara a model for other states in terms of economic growth and prosperity for the people. We are like a tag team in which we are pulling our strengths together in a determined effort to build a greater Kwara for the benefit of prosperity. Senator Saraki is a man for whom I retain the highest regard and I am happy to state that the feeling is reciprocal", said Ahmed, who served as commissioner for seven years during Saraki's tenure as governor, in apparent collaboration of his aide's submission.

Saraki's media assistant, Akin Fatigun, had also accused the opposition in the state of trying to fan the embers of discord between Ahmed and his predecessor.

In clearing the air on the alleged rift, Fatigun, however, assured of a sustainable relationship as the two were matured enough not to pick "personal information about their persons from the streets."

Saraki broke the jinx by becoming the first governor in the state to serve two terms of four years. The Senator representing Kwara Central at the Senate, had during this period appointed Ahmed as commissioner for seven years. When the race for his successor became hotter on the platform of the PDP, Saraki, who initially threw open the race later supported Ahmed in his bid to beat other top contenders to the plum job.