We Didn’t Guarantee Loans for Shonga farms -Ex-Governor Ahmed replies Kwara Govt

Former Governor Abdulfatah Ahmed of Kwara

Immediate past Kwara State Governor Dr Abdulfatah Ahmed says claims that his and the Bukola Saraki administrations guaranteed bank loans for Shonga Farm Holdings (SFH) are uninformed and false.

In a statement by Wahab Oba, his media aide, Alhaji Ahmed, who was Commissioner for Finance when Shonga Farms was established and whose administration created Harmony Holdings Limited, SFH’s supervisory company, said Shonga Farms is a public-private partnership (PPP) funded under a debt-equity structure and owned by the state government, a consortium of banks and the Zimbabwean farmers.

The former Governor maintained that the Kwara State Government invested in the project through infrastructure for the farms and its communities such as roads, electricity, water and security infrastructure that are still intact.

SFH, he revealed, secured bank loans for expansion using its assets as collateral, adding a state government can only guarantee a loan through its federal allocation, which was never pledged.

Dr Ahmed reiterated that not all businesses are thriving, stressing that while the poultry business remains viable, the diary syndicate stagnated when a global milk company cancelled its off-taker arrangement with SFH.

The mixed crop section, he said, stalled due to irrigation problems as a result of federal governnent’s renege on its promise to assist with irrigation.

Ex-governor Ahmed said some of the farms secured new investment to pay off their loans to the banks through SFH, which has paid over N600m out of an outstanding N900m to AMCON.

The former governor exonerated the previous two administrations of any wrongdoing in exploiting a business opportunity that attracted investments into the state, developed the local community and placed Kwara State on the global map.

According to Ahmed, SFH attracted foreign and local investments above 100 million USD and has created over 4000 direct and indirect local jobs besides knowledge transfer to the local community.

He maintained that his and the Saraki administration followed due process in all transactions relating to SFH, a quality that earned the state government a high ranking from the global rating agency, Fitch.

While acknowledging that the SFH financing model was innovative, Ahmed urged the state government to seek clarifications from professionals rather than indulging in theatrics capable of discouraging investment in the state.

The former Governor urged the state government to focus on surpassing investment inflows recorded during the previous administrations, including Dangote Industries and BUA Sugar Company.

The current state government had addressed a press briefing on Thursday that the state had been fraudulently negotiated into underwriting the debts incurred by the former administrations in the name of Shonga Farm, a venture it said was funded 100% at inception with taxpayers money without any gains accruing to the people of the state under whatever guise.
It explain the recent take over of two Kwara properties by Assets Management Corporation of Nigeria (AMCON) owing to about N1.7bn debts of the Farm,  the government said more than a cumulative sum of N5bn of public funds and loans secured with the government as guarantor have been sunk into the agricultural project with no traces of any dividends to the people of the state.
The press briefing was jointly addressed by Attorney General and Commissioner of Justice Salman Jawondo (SAN); Commissioner for Communication Hon. Bode Towoju; Special Adviser to the Governor of Political Matters Lateef Alakawa; Special Adviser to the Governor of Political Communication Bashir Adigun; and Group Managing Director of Harmony Holdings Abdullahi AbdulMajeed.
The government said out of the 13 autonomous farms set up with public funds, nine had been sold out with no kobo paid to the public coffers, even when the government is supposed to hold a paltry 10% equity in each of the farms. 
The government explained that the reason AMCON took over the Kwara properties in Abuja is to recover the bad loans that the Farm owes a consortium of banks that invested in it dating back to 2007 because the Shonga Farm Holdings could not pay back on the agreed timeline. 
It said AMCON had to hold the state responsible because it is listed among the shareholders of Shonga Farms Holdings Ltd, even though its share — allocated to it only after public noise in the early 2000s — is not anywhere commensurate with its huge investments in the project.

Edited by Felix Ajide