WHEN GOVERNMENT PAYS AND CRONIES OWN: THE RADISSON HOTEL SCAM EXPLAINED

 How to pay debt for a hotel you no longer own 

By John Mayaki 

I think we need to clap for ex-governor Godwin Obaseki, a professor of “financial innovation” whose latest defence of the Radisson Hotel should make Edo people feel grateful and not scandalized. 

Obaseki said, “As any innovative government should do, we injected the initial funds (including N25B bond) to make the investment attractive and eventually passed it on to a private investor, while still reserving 20 percent equity.”

This reply from Obaseki both in a video somewhere in United Kingdom and from his aide, Crusoe Osagie seems “brilliant. Simply brilliant”. Or else, if not Obaseki, who spends over N20 billion on building a hotel, borrow N25 billion, commit Edo state to a monthly irrevocable standing order, and then hand the asset over to private company registered five minutes ago? Is that not what Obaseki calls innovation? 

And when I said we should clap for him, some of you are hesitating? This is not fair. Obaseki deserves some awards and accolades, please. Let us clap for him again because if you build a house, you own it. If you borrow money for it, you repay because you benefit. If you hand it to an investor, the investor takes both the asset and debt but for Obaseki, Edo state donate the house, keep paying the mortgage, and hope God refunds the state later. 

And so, in how to pay the debt for a hotel you no longer own, according to Obaseki, you get 20% equity in a hotel you financed 100%. It’s like me, a farmer, buying a cow, paying for the feed, building the ranch, hiring the herdsmen and ending up with two litres of milk a month. Is that not innovation, in Obaseki’s economics? 

So, Obaseki wants us to believe that a private investor took full assets and liabilities, yet the investor walks away with ownership, control, and revenue while government continues to pay a monthly debt on behalf of the crony investor. 

This is the first time I would hear such a thing that a borrower repays a loan for an asset he does not own. 

The question we should ask Obaseki is this: if the investor took liabilities, why is Edo state government still paying the bond? What exactly were the “liabilities” Obaseki is talking about? How does a government spend over N20 billion and retain only 20%? Who is the “lucky” investor registered in May 2024? 

Why did the project migrate from from Ministry of Finance to Chief of Staff’s office like a political refugee? How did a N25 billion bond meant for development become a private hotel empowerment scheme? 

So, government borrows N25 billion. Government spends billions on land, consultants, contractors, lawyers, financial advisers and re-advisers, government keeps paying N385 million every month under an ISPO but a private company takes over the hotel. And of course, government gets a souvenir of 20% equity. This is an insult. 

An insult because you do not donate your house to someone and thank the person for letting you keep the backyard. This is financial recklessness and deliberate defrauding of the state. Debt without ownership and liabilities without revenue. This is pure creative irresponsibility by Obaseki. This is not how to govern a state but how to pay a debt for the hotel you no longer own in Obaseki’s economics. Complete fraud.