Exclusive: How Ondo Government Borrowed N30 Billion For Roads and Hospitals, Quietly Added an Unauthorised N15.2 Billion Private Loan, and Left N4.1 Billion Unaccounted For

Secrets Reporters

The administration of the late Governor Oluwarotimi Akeredolu raised a N30 billion capital market bond in December 2019 for hospitals and roads, then quietly layered on an extra N15.2 billion private bond with no evidence it was ever approved by any regulator, and ended up unable to explain N4.1 billion in spending on the very projects the bond was meant to fund, a Federal government Commission verification exercise has found. This is according to documents in possession of SecretsReporters.

The Ondo State Government under Akeredolu had asked the State Executive Council and the State House of Assembly to approve a N50 billion bond in two tranches. The Federal Ministry of Finance eventually issued an Irrevocable Standing Payment Order (ISPO) approving N30 billion of it in December 2019, to be repaid at a 17 percent interest rate over 84 months, financed from Ondo State’s federal allocation. But the Securities and Exchange Commission objected to the full N30 billion on debt sustainability grounds and approved only N14.8 billion at a lower 13 percent rate.

What investigators found next is where the case turns from a fiscal irregularity into something closer to a paper trail with a hole in it: Ondo State went ahead and raised the remaining N15.2 billion from a private bond source anyway, with no evidence of regulatory approval anywhere in the documents made available to the Commission’s team. The 2019 Audited Financial Statement of Ondo State only captured the approved N14.8 billion, meaning N15.2 billion in public debt was, in effect, kept off the books that citizens and lawmakers are supposed to be able to rely on.

The bond money was meant for five projects: reconstruction of hospital facilities at the Akure and Ondo campuses of the University of Medical Sciences, the Governor’s and Deputy Governor’s lodge at Alagbaka, the 15km Ijoka-Idanre road, the Treasury House in Akure, and roads in Owo town. When FRC auditors added up what Ondo State itself presented as spending on nine projects tied to the bond, the total came to N34.11 billion which is N4.1 billion more than the N30 billion the bond was supposed to cover, with no explanation from the state on where the extra money came from or whether it was really bond money at all.

A governor’s lodge finished before the hospitals, no cost-benefit analysis, no compliance certificate

While the hospital project in Akure sat at 81 percent completion and the Deputy Governor’s lodge languished at 32.4 percent, the Governor’s own lodge at Alagbaka, funded with N3 billion in loan proceeds on top of a N6.49 billion contract cost was 97.5 percent complete by the time investigators visited in October 2024, ahead of the hospital wards it was borrowed alongside. On the Ijoka-Idanre road, contracted at N3.69 billion and reported 100 percent complete and commissioned in 2021, the state paid the contractor in full without withholding the 5 percent retention fee the law requires to cover defects and investigators could not even find a certificate of completion for a road the government claims was finished and commissioned. For the Owo town road projects, there were no project files, no project briefs and no documents of any kind for the team to examine, even though the state says the roads are complete and in use.

At no point did the Ondo State Government present the government investigators with a cost-benefit analysis for any of the projects, in violation of Section 44(1) of the FRA 2007. At no point did the state, or the banks and capital market operators it borrowed from, produce a Proof of Compliance certificate from the FRC, in violation of Section 45(1) of the Act. FRC investigators also found that Ondo State’s total debt already exceeded 50 percent of its total revenue for the twelve months before the bond was contracted, which under the FRA’s own debt-sustainability rules should have disqualified the state from taking on new debt at all. The state’s outstanding judgment debts which the FRA says must be counted as part of its total debt stock were never disclosed to the Commission, meaning the real size of what Ondo State owes remains unknown even to the federal body charged with tracking it.

The FRC’s procurement review came back empty too: no advert files, no bidding records, no evidence of how contractors were shortlisted, and no payment vouchers or disbursement certificates for any of the projects funded by the N30 billion bond. Akeredolu died in December 2023 while still in office; his successor, Governor Lucky Aiyedatiwa, inherited a state whose FRC file shows a bond obtained on his predecessor’s watch with a compliance trail that, as of the Commission’s review, still does not exist.

The post Exclusive: How Ondo Government Borrowed N30 Billion For Roads and Hospitals, Quietly Added an Unauthorised N15.2 Billion Private Loan, and Left N4.1 Billion Unaccounted For appeared first on Secrets Reporters Nigeria - No Place To Hide.