The untold story of how Akwa Ibom acquired N184bn ‘secret’ loan, targets fresh N150bn loan

By Ekemini Simon

AKWA Ibom State Government is in the works to secretly obtain a N150 billion loan, TheMail Newspaper can authoritatively report.

The planned multi-billion naira loan our government house sources confided would be obtained under the cloak of ” other exceptional income: 13 per cent derivation revenue arrears”.

Our Sources revealed that the State Government is about to use for the third time the $2.258 billion refund judgment to Akwa Ibom State as a guarantee to acquire a commercial bank loan without the public being in the know.


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Checks into the standing order of the House reveal that the House of Assembly had tinkered with her standing orders thus making for loan requests from the Governor to be considered outside public glare. Loan requests from the executive usually meet the State Assembly in the form of a message from the Governor.

Although the new standing order is yet to be printed and put to use fully, our sources at the State Assembly say the House leadership would rely on the amended standing order of the House to accede to the Governor’s request.

The Akwa Ibom State House of Assembly in December 2020 had passed on the floor of the House an amended standing order that makes provision for any message of the Governor to be considered at the executive section of the State Assembly if the legislators deem fit.

The standing order before the December 2020 amendment under Order 2 rule 2 (1) of the House tagged as ” Message from Governor” notes ” The Speaker shall immediately after prayer or as soon as any member has taken the Oath of Allegiance read to the House any message addressed to the House by the Governor”.

However, in the amended version which created sub-rule (4)  the standing order reads that a message from the Governor can be deliberated during an executive session if the House of Assembly deems fit. ” A message from the Governor can be deliberated at the executive session if the members deem it fit and proper to be so considered in exceptional circumstances”.

TheMail has gathered that some members of the leadership of the House of Assembly in a meeting recently with the Governor consented that they would authorise the loan secretly so far their political interest in the 2023 election is protected and they also get a bite of the dark loan. Yet, it was agreed that this particular loan approval would not be discussed on the floor of the house else it would spark public outcry.

Governor Emmanuel with Speaker Aniekan Bassey.
Governor Emmanuel with Speaker Aniekan Bassey.

Yet, checks by TheMail Newspaper into 2022 approved budget shows that if the State Assembly gives the N150 billion approval of the loan under ” Other Exceptional Income: 13 per cent derivation revenue arrears”, they would be engaging in extra-budgetary acquisition as N15 billion is the budgeted revenue expectation of this revenue source.

Nonetheless, last year, the State had acquired N171.2 billion on this subhead despite having an N61.10 billion approved budget on the revenue item.

It was only in September 2021 after receiving the funds that the state revised its expected revenue on this budget item from N61.10 billion to N193 billion. Our sources disclosed that a revised budget is expected after the loan is drawn down.

The reason for this loan, our sources who are privy to the plans confided, is to be used to run the 2023 elections and also enable the governor to have an upper hand in the payment of delegates to ensure his succession plan flies.

Interestingly, this is not the first time the administration of Governor Udom Emmanuel would be acquiring loans secretly and under the mask of a 13 per cent derivation refund.

This action which has gradually become a dark trend in the State dates back to July 2021.

Background into the Multi-Billion Loan Opening


It could be recalled that in a string of Federal High Court judgments in 2021, the Federal Government had been ordered to pay $2.258 billion  to Akwa Ibom State, $1.638 billion to the Delta State, $1.114 billion to Rivers State, and $951m to Bayelsa State, as share of recalculated oil derivation revenue in line with Section 16(1) of the Deep Offshore and Inland Basin Production Sharing Contract (PSC) Act which obligates the federal government to adjust the share of the Federation in the additional revenue if the price of crude oil at any time it exceeds $20 per barrel.

Akwa Ibom State’s share of $2.258 billion is N926.9 billion at the 2021 third-quarter exchange rate of N410.5/$US.

From the exceptional income expected, Governor Udom Emmanuel’s administration had deeper and surprising plans.

The N184.05 billion obtained Under false Cover

Instead of waiting like the other three states of the Niger Delta which the judgment covered, Governor Udom Emmanuel devised a means to tap into the expected billions of naira even without receiving payments directly from the federal government.

That strategy was to use the judgment as a guarantee to obtain secret loans from commercial banks. Our sources revealed that the loan deal was struck with a bank.  However, the reporter could not independently verify the information on the bank the state struck the deal with.

Yet, one of our sources mentioned that the Governor is using the strategy so that his administration can enjoy part of the refunds since he envisages that the tranches of payments of the refunds may not come in the life of his administration. Our Source also explained that GovernorEmmanuel was the brain behind the court case against the Federal Government hence the reason he is poised on drawing down the funds during his administration.

Although in November 2021, Policy Alert, a Civil Society Organisation promoting economic and ecological justice in the Niger Delta relying on the 2021 third-quarter budget implementation report of Akwa Ibom State had burst open the first can of worms that the Akwa Ibom State Government had secretly received N171.2 billion 13 per cent derivation refund, investigations reveal that the real source of the money was a commercial bank loan which the State government used the 13 per cent derivation judgment as a guarantee and a front in its financial statements.

Policy Alert had queried the strange silence from the executive even after the enormous amount had landed the State coffers stressing that it was a red flag ” This leaves a huge gap on transparency. We were disappointed that the Governor’s 2022 budget speech was silent on this development when he reviewed the performance of the 2021 budget”.

But one of our sources who is privy to the deal divulged more reasons the State government was silent on the money ” It is because the money was obtained as a loan even before the knowledge of the House of Assembly members, that’s the reason the State executive decided to keep silent about it. But later, the House members were in the know and they got their share of the booty.”

“You people are always interested in expenditures. So, although it was published, no one expected the source of the revenue would be of serious public interest. What the State Governor has designed is to convert the judgment into an instrument for securing loan advances. So, when the payment will come in tranches from the Federal government, it will be deducted from source to the bank.”

It could be recalled that on November 19, 2021 about a week after informing the State about the N171.2 billion received under the robe of 13 per cent derivation refund, Policy Alert, possibly received a hint on the true background of how the fund was acquired issued a statement calling on state governments in the Niger Delta to resist the temptation of using the court judgments as a guarantee for new loans.

Be that as it may, findings show that the water had already crossed under the bridge before the statement went public even as the advice may still not yield results if the State Assembly members allow the loan request to fly.

Budget Implementation Report indicts Akwa Ibom State Government 

Analysis of the full-year budget implementation report of Akwa Ibom State implicates the State Government. Although the report shows that Akwa Ibom State got a total of N184.05 billion through ” Other exceptional income: 13 per cent derivation revenue arrears”, in 2021,  the breakdown from the quarters the money came in and information on the strange amount paid on debt servicing gives a clear indication that the money was obtained through a loan.

Even though the report shows that N184.05 billion was gotten on 13 per cent derivation arrears for the full year, the breakdown reveals inconsistencies and attempts at cover-ups.

The report shows that In July 2021, a month after the 13 per cent derivation refund court judgment, the State got N25.62 billion on the item. In August, it got N121.61 billion. The money from these two months totalled N147.24 billion in the third quarter (July through September).

However, for the third-quarter report, the State noted that it received N171.2 billion. The total monthly N147.24 billion the state reports it received leaves a deficit of N23.96 billion to make it total N171.2 billion for the third quarter.

Billions lost on debt servicing shines brighter light on the scandal 

A deeper trace by TheMail into the amount the state spends quarterly on debt servicing turned out shocking results and gave a clear lead to where the money must have come from.

The budget implementation report revealed that in the third quarter (July through September) of 2021 alone, the State spent a whopping N30 billion on debt servicing. Yet, the report shows that earlier in both the first and second quarters of 2021, the State respectively spent N7 billion each quarter to service its outstanding debt. Thus, subtracting N7 billion which is the standing quarterly amount of payment for debt servicing from the N30 billion strangely spent during the third quarter, leaves one with N23 billion that was missing from the N171.2 billion.

What is more, the full year 2021 budget implementation report reveals that the State received N12.18 billion still on this subhead in the fourth quarter of 2021(October through December).

Yet, analysis of the monthly stream of revenue in the report shows that the money came in during the month of October 2021. In the public debt servicing expenses of the state for this fourth quarter, N22.08 billion was recorded. When the routine N7 billion paid on debt servicing before the advent of the exceptional loan is deducted, it leaves N15 billion as the possible amount that was spent to service the controversial loan.

A source revealed to TheMail that the State executive had struck an agreement with the bank giving out the loan to deduct the loan interest at the source so that it does not bloat the debt profile of the State at Debt Management Office hence raising suspicion and outcry by citizens.

Analysis by this reporter shows that when N23 billion spent in the third quarter and N15 billion spent in the fourth quarter is added up, this particular loan may have made the State lose up to N38 billion as interest paid to the bank on the loan.

Interestingly, the total amount spent on Public Debt Service by the State for the year 2021 gives credence to our analysis. The 2021 full-year budget implementation report of Akwa Ibom State shows that the State spent  N67.77 billion to service her debt. This is an all-time highest amount spent on debt servicing in the State’s history.

Checks into the financial statements of Akwa Ibom State from 2015 through 2021 reveal the red flag in the spending on debt servicing of 2021.

The Public debt servicing expenses are as follows: 2015- N15.1 billion, N2016- N22.09 billion, 2017- N30.26 billion, 2018- N31.64, 2019- N26.66 billion, 2020- N20.69 billion and 2021- N67.77 billion.

Even after the huge spending to service debt, the debt profile of the State at Debt Management Office (DMO), has not witnessed significant change. Data obtained by TheMail from Debt Management Office, Abuja shows that as of September 30, 2021, the State’s domestic debt stock stood at N234.85 billion, leaving the oil-rich state to maintain its position as the second most indebted State only to Lagos State.

However, in the second quarter of 2021 before the strange payments of debt servicing, the domestic debt stock of the State was N247.27 billion suggesting that N12.42 billion has been injected to reduce the debt profile. The routine N7 billion respectively spent in the first and second quarter of 2021 which totalled N14 billion as reflected in the budget implementation report of the State is suspected to have helped reduce the debt stock.

No 13 percent refund to other states

It could be recalled that the Judgment was not for Akwa Ibom State alone.  The Court ordered  $2.258 billion to be paid to Akwa Ibom State, $1.638 billion to the Delta State, $1.114 billion to Rivers State, and $951m to Bayelsa State. Checks into the 2021 budget implementation reports for Bayelsa, Delta and Rivers State did not show that these states received any funds under ” Exceptional Income:13 per cent derivation refund arrears” for the fiscal year.

Governor Emmanuel with Governor Wike and Okowa.
Governor Emmanuel with Governor Wike and Okowa.

Governor’s Denial, Challenge and Suspicious Silence

Governor Udom Emmanuel on February 12, 2022, while responding to questions on the issue during the media interaction “The Governor Speaks”,  denied that Akwa Ibom State received 13 per cent derivation payment, thus contradicting the budget implementation reports of the State.

He said “From 2018, there has not been any further refund from the Federal Government. I don’t know if people are counting the court judgment on the 13 per cent derivation arrears which have not yet been implemented. Even then, people need to ask how much we were earning as 13 per cent derivation as of then. When the issue was brought to the Federal Executive Council, they said they will pay it in five years.”

In reaction, Policy Alert insisted that the State Government had received the N184.05 billion under the nomenclature of exceptional income: 13 per cent derivation arrears.

The civil society organisation further challenged the State Government to come clean on the true source of the funding if what they reported in the State budget implementation report was incorrect.

The organisation stated ” It is therefore not just curious but potentially misleading to publicly deny that the state has received these funds despite documentary evidence to the contrary. This is indeed a red flag and suggests that something is amiss. Fiscal openness goes beyond publishing what we spend public funds on.

“We must also be transparent and accountable on the sources of these funds. It is expedient for the State Government to come clean on the true source of the N184.05 billion exceptional income in 2021 if it is not derivation refunds as captured in the state’s fiscal documents.”
Policy Alert called on accountability institutions especially the Office of the Auditor-General and the State House of Assembly to further investigate the issue.

Yet, after the challenge, the Akwa Ibom State government neither refuted Policy Alert’s claims nor gave explanations on the source of the money. Accountability institutions also remained mum.

We are creating assets from accruable claims through refunds- Commissioner for Finance

When contacted, the Akwa Ibom State Commissioner for Finance, Linus Nkan said that the N184.05 billion acquired by the State is neither a refund nor a loan.

Commissioner for Finance, Linus Nkan.
Commissioner for Finance, Linus Nkan

He said the Akwa Ibom State Government only looked for ways of generating funds by creating assets from what he described as accruable claims through refunds.

Nkan said “This is something that has never happened in the history of Nigeria. The State is the originator of the idea of the 13 per cent derivation refund. You need to see how other Governors were so happy with our dear Governor for the idea.

“What the State government has done is to look for ways to generate funds so as to carry out projects. Only a blind person would say he has not seen what the governor has done. No state can embark on a serious project with only monthly allocation. Monthly allocation is basically to pay salary.

” You have to understand that refunds are not loans. They are conversion of your claims to instant assets. We have financial arrangements to get payments from those claims so that we can have assets to use. We are not claiming liabilities rather we are claiming assets. We are trying to create assets from accruable claims through refunds.

” The situation is that you have a series of refunds and If the federal government says I am owing you but I don’t have money now, I will pay you in over five years, you know that money cannot work for you. What you do is to look for financial institutions and exchange your right of claims. That is not a loan please.”

Financial experts who assessed the Commissioner’s claims insisted that what he has explained is a loan. They explained that the moment the State approaches a Financial institution to get money which would be deducted through other sources, it is a loan.

” Unfortunately, the State government has failed to give a name to the funding arrangement it claims to have entered with the unnamed financial institution. That leaves a lot to be desired. Do financial institutions now dole out money freely to entities?”, the Executive Director of Policy Alert, Tijah Bolton-Akpan queried. “We are particularly disturbed that this latest request is coming barely a fortnight after the governor made public his succession plan, giving the impression that these funds may end up being used to prosecute his 2023 political agenda. It is not just suspect but odious whichever way you look at it, and must be resisted by all right-thinking citizens.”



    Attempts to get the position of the Akwa Ibom State House of Assembly were not successful. When the Chairman, House of Assembly Committee on Information, Aniefiok Dennis was contacted, after listening to the questions, he promised to get back to the reporter. However, he did not did not call back. Further attempts to reach back to him on phone were futile as his line was unreachable before going to press.

    State Government Violates Fiscal Responsibility Law

    By obtaining loans secretly and not giving public insight to the cost benefit of the loan, the Akwa Ibom State Government has violated Section 45(2) of the Fiscal Responsibility Act 2007 as well as the states’ Fiscal Responsibility Laws which specify conditions for borrowing by any government.  The State Fiscal Responsibility Law notes ” The State Government or its agencies/Commissions and Corporations and Local Government Councils in the State desirous of borrowing shall, specify the purpose for which the borrowing is intended and present a cost-benefit analysis, detailing the economic and social benefits of the purpose to which the intended borrowing is to be applied.”

    The above provision was not adhered to since the House of Assembly failed to deliberate the same at plenary.

    Yet, the financial institution that lend the State Government is also culpable. Section 46 (1) of the law notes ” All banks and financial institutions shall request and obtain proof of compliance with the provisions of this part before lending to the state”.

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