BEYOND AFDB $115M FACILITY; HOW IKPEAZU PROVED THAT ABIA HAS A GOOD CREDIT RATING, BENEFITS | #NwokeukwuMascot
|Dr Okezie Ikpeazu and Dr. Akinwumi A. Adesina; at the Headquarters of Africa Development Bank.|
Prior to 2015, Abia State was not a major player in attracting IDA funds amongst the comity of states in Nigeria. One major success factor of many of those Governors that impacted greatly in the lives and infrastructural stocks in their states was the ability to work with IDA and attract development fund.
All the IDA funds were on the table before 2015 for Abia State to access. From NEWMAP to RAMP to ASIID, etc. But to attract such attention and funds to any state, the state must satisfy the conditions precedent to the release of those kinds of funds.
The first, which is of very key importance, is that the state must observe a high level of good governance and due diligence standard acceptable by those international institutions like the World Bank and the likes.
Those institutions are no sancta claus or father Christmas so they must drill you through the due diligence processes and you must meet the required integrity matrix for the approval of fund to pass through their individual governing boards before fund will be released to any state through the agreed channel.
The process will include, the recruitment of vetted project teams acceptable to the IDAs and who must have the requisite qualifications and experiences to handle such projects. Remember, each funded project has its expertise requirement. One of the reasons most rogue administrations run away from Donor Agency funds is their inability to find the quality of human resource such IDAs stipulate. That is, those who are stickler for rules who wouldn't tamper with the project goals and objectives.
The second and most important requirement is the ability to pay counter-part funding. Most IDA funds require the contribution of the requesting party to make contributions as a sign of its capacity in terms of readiness and willingness to contribute to the project.
Even if the first hurdle is passed, the payment of counterpart fund is a major key requirement, and no unserious government will go this direction knowing that the funds once released for this purpose is no longer available to them or under their control. IDA funds are always under serious global watch and surveillance.It is therefore funny when people allude that the funds can be stolen or misappropriated.
There are other minor requirements, like the setting up and equipment of the project office, which is clearly stated equipments and more.
After his election as Governor, one outstanding thing Dr. Okezie Ikpeazu did was to travel to the different IDAs like the World Bank, AfDB, Afrexim to inform them of his ability to work with them for the development of the state, but more importantly that he was ready to submit himself, his government and processes to the governance systems and prescriptions of these global bodies. Such declaration, according to one of the country directors, requires huge courage and willingness to be very truly transparent. And this he did without reservation.
First was the payment of counterpart funds. Ikpeazu as Governor of Abia State kept to his promise to pay all the required counterpart funds for all the IDA funded and supported projects and programmes in Abia State including meeting up with their local expenditure requirements to function optimally.
Second was the insistence of the then governor to recruit only qualified persons that meet up the stipulated criteria for appointment as project officers and teams for those projects. In many states, these IDAs were suspending project officers and teams but none of such happened in Abia. In fact, the truth is that during national and international engagements, Abia IDA funded project heads shone like stars amongst their peers.
It takes a lot of courage, prudence, and principle to put funds down for such projects and programmes because funds under this structure are no longer available to state control. That is why when people were shouting wolf about stealing world bank funds , those who knew better were just laughing at their crass ignorance and foolery.
It is, therefore, no surprise that Abia has had its highest engagements, receipts, and funding since 2015 till date. Clearly, this is because funds and assistance from IDAs follow years and months of rigorously scrutiny and due diligence.
The project preparation takes time, funds, and a whole lot of expertise. it's no tea party. I am sure many think that IDA funds are restricted to just Newmap and ASIID Projects, they include CSDA, Health, Some aspects of the Social Investment Programmes, Agriculture, Porverty Reduction Programmes etc., and in most of these areas Abia's national and global rating was envied by other states.
This is certainly one area Ikpeazu put the State on a good pedestal and rating amongst these global institutions.
A Good Credit Score and what Abia state stands to benefit:
A good credit rating, also known as a good credit score, is a numerical representation of an individual’s or entity’s creditworthiness. It is a measure of their ability to borrow money and repay it responsibly.
Credit ratings are typically assigned by credit bureaus or agencies, such as Experian, TransUnion, or Equifax, based on various factors including payment history, credit utilization, length of credit history, types of credit used, and new credit applications.
A good credit rating usually falls within a specific range, which may vary slightly depending on the credit bureau or scoring model used. Generally, credit scores range from 300 to 850, with higher scores indicating better creditworthiness. While specific cutoffs may differ, a credit score above 700 is often considered good, while scores above 800 are typically considered excellent.
Having a good credit rating means that lenders and creditors are more likely to view an individual or entity as a low credit risk. It can result in easier access to credit, lower interest rates on loans and credit cards, higher credit limits, and more favorable terms when applying for mortgages, car loans, or other types of financing. Additionally, a good credit rating can also positively impact other aspects of life, such as insurance rates, rental applications, and employment opportunities.
Below are what Abia stands to benefit going forward ⬇️
1.) Lower borrowing costs: A state with a good credit rating can borrow money at lower interest rates. This means the state can finance infrastructure projects, public services, and other initiatives at a lower cost, saving taxpayer money in the long run.
2.) Access to capital markets: A good credit rating allows a state to easily access capital markets and issue bonds. This provides the state with additional funding options to invest in public infrastructure, education, healthcare, and other essential services.
3.) Economic development opportunities: A strong credit rating can attract businesses and investors to the state. Companies may be more willing to establish operations or expand existing ones in a state with a good credit rating, as it signals financial stability and responsible fiscal management.
4.) Enhanced financial flexibility: A state with a good credit rating has more financial flexibility during challenging economic times. It can weather economic downturns and fiscal crises more effectively by accessing credit markets or utilizing reserve funds.
5.) Improved reputation and credibility: A good credit rating enhances a state’s reputation and credibility in the eyes of investors, businesses, and other stakeholders. It demonstrates that the state is financially responsible and capable of managing its obligations.
6.) Positive impact on residents: A good credit rating can indirectly benefit residents of a state. Lower borrowing costs and increased economic development opportunities can lead to improved public services, job creation, and a higher quality of life for residents.
Overall, a good credit rating for a state can have wide-ranging positive effects, from cost savings to economic growth and improved public services. It is an important factor in maintaining the financial health and stability of a state.
This is one of the feat achieved by the Dr Ikpeazu led administration, one that Abia never accomplished before now.