Why Gov. Udom Emmanuel is Wrong on ROA for Proposed Lagos Lodge -Etim Etim

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Deacon Udom Emmanuel addressed the press on his controversial Gov’s Lodge project Saturday night. According to reports filed by Essien Ndueso, his Media Assistant and Franklyn Isong, a newspaper publisher, the salient points of   governor’s statement are:
1.     The proposed cost of the project captured in the 2017 budget and the Supplementary budget just passed by the State House of Assembly is N1.2 billion
2.     The project is desirable because it will offer the governor a venue to meet with important guests and visitors like consul-generals of diplomatic missions
3.     The lodge will, on completion, have increased return on asset
4.     Akwa Ibom state has many prime property in Lagos; another one wouldn’t be bad
5.     The people who disagree with the governor on this are myopic and stupid
 
This is my response:
1.     Although N1.2 billion is the budgetary provision for the project, the cost will eventually be higher than that. In fact, I understand that bill of quantities for the project puts the cost at N9.1 billion. Usually construction and building projects transcend two or more budget cycles, so the first provision is not the total cost; and with the usual ‘padding’ of project cost, it is doubtful N1.2 billion will be enough to pay all the kickbacks usually associated with a project of this size. I know for sure that last year, the state government renovated the Gov’s lodge in Abuja, which was in a very good shape, for N1. 6 billion. Why would a brand new one in Lagos cost less? As a well versed politician said: ‘government officials make money through projects’.
2.     It is in their line of duty for consul-generals, ambassadors, high commissioners and other diplomats to travel across the country to meet leaders and other important people.  Even potential investors which Mr Udom talks about glibly are more interested in the bouquet of incentives offered by the state than a fancy office building. For example, how long does it take to process C of O in Akwa Ibom? What of cost of land acquisition? Do we have a well-appointed industrial park? Is our workforce educated, well trained and with the right attitude? In this country, agriculture is the preferred industry of the future and rice is the cash crop of tomorrow. The federal government has in the last two years pumped in over N200 billion as grant into rice farming alone. The target is to wean us off the imported brands which is 1.5 million tons a year. This is a very huge market, which unfortunately, Akwa Ibom government has ignored. Rather, we have a governor who waltzes from one outlandish idea to another. Just recently, he was contemplating importing 200 cows from Mexico for milk production!
3.     In trying to explain the economic desirability of the project, I think the governor mixed up some financial concepts. He said that the lodge will have improved return on asset (ROA). ROA is a ratio that indicates how profitable a company is relative to its total assets.  How can then can the governor be talking of ROA for the lodge when it won’t be generating income? That’s why such investments are known as non-earning assets. So where does the return come from? In fact, instead of earning income, this property will be draining the treasury as the government will be paying, as I learn, about N15 million – N20 million property tax in a year. I suspect that the governor meant to say that the value of the property would increase over the years. True, but the future value of a property depends on some factors like location, condition of the property, health of the economy, among a few others. But even if the value of the lodge will balloon in the years to come, of what benefit will that be to us if the property is not of commercial use?
4.     The governor also said in the press briefing that Akwa Ibom State has many prime property in Lagos, but he didn’t say how much income they earn. That can therefore not justify the need for a lodge that would actually be a sterile investment on which property tax would be paid annually.
5.     Mr. udom Emmanuel ended his address by stating that Akwa Ibom people who oppose the building of the lodge are myopic and stupid. He said: ‘From the days of Moses, great leaders are always misquoted and misconstrued, but God can only give vision to one leader, and the people know that at any point in time, there can only be one governor’.  I must strongly denounce and condemn Udom Emmanuel’s penchant to insult and abuse our people each time we disagree with his outlandish policies. I recall that he had in his first few months in office described Akwa Ibom people as illiterates and stupid and boasted that he had attended business school and so is more educated that the rest of us. Similarly, he is always quick to point out that he is the governor whenever overwhelming public opinion pushes him to the wall. I believe that is a sign of insecurity complex that perhaps arises from how tainted his ‘election’ was. If the governor was truly elected by the people and not imposed as a stooge, he allow his good works to speak for him.
CONCLUSION
I am relieved that Mr. Udom Emmanuel has finally broken his silence on the controversial Governor’s Lodge project. For over a week, Akwa Ibom people came out in unison to condemn the plan by the state government to build a new governor’s lodge in Lagos. The condemnation became cacophonous when several government officials gave different amount as the cost of the project. The humiliation and embarrassment the governor suffered were enough to force him out, if he was freely elected.  Akwa Ibom people deserve our commendation for standing up to Udom Emmanuel each time he comes up with his bizarre policies and logic. Whatever the cost is, this project is a misplaced priority at this very challenging moment. As I keep saying, the money could be deployed into more socially beneficial areas. Many of our children sit on the floor in public schools, the police have not had new vehicles for five years now, many of our towns don’t have a general hospital, etc. these are areas that require more urgent attention.  
 
 

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