Many members here have asked for my comments on why the Office of the Governor, Abia State, is spending N5.32 billion when the equivalent in Ebonyi State does only N805 million.  The accusation goes like this: “According to the records, Alex Otti used the sum of N5.32 billion to run the governor’s office from his private residence in Isiala Ngwa in three months while his counterpart in Ebonyi State used the sum of N805 million to run the governor’s office during the period under review.”

My Response:  I write as the co-chair of the Economic Transformation Council and in my personal capacity. This does not represent any position from the Government. We do this as a service to our people and we expect nothing in return.

Now, to the comparison, Ebonyi State uses 35 commissioners and ministries. In Abia State, we suggested to the governor to stay below 20 commissioners/ministries.  But to run things, the state created a Unit within the Governor’s Office to drive the coordination of strategies, project coordinations, project executions, etc, making the government processes more integrated and optimized. That Unit works to ensure things are done. Also, it essentially eliminated more than 15 ministries in Ebonyi State if we have to compare.

Of course, because of that Unit, the expense in the Governor’s Office seems higher but when you check what it eliminated, Abia State has a better cost efficiency. Looking at the data, Ebonyi State has a larger cumulative recurrent expenditure when compared with Abia State.

Abia State expects this administrative consolidation to reduce operating and administrative expenses with the savings channeled into education, healthcare, pensions, etc.

The quarterly reports are here and we ask everyone to go and peruse.  

In summary, I have used Ebonyi State* to integrate the understanding of the media people (Ebonyi has the least Governor’s Office expense), and with that, one can differentiate how Abia State is different from other states, because in this government, we are working for a calculus of opportunity and development. 

*nothing against Ebonyi State, just using it as the media people have focused on its low number. 

Registration for Tekedia Institute Investment and Portfolio Management program continues. The first live  Zoom session comes up on Saturday at 4-6pm WAT. Register today and master the mechanics of investing, from our award winning faculty.

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As WeWork files for bankruptcy, demonstrating the power of capitalism which giveth and also taketh, I re-share this piece which I wrote in 2019, making a point that the exit of the founder would imperil the company. Today, a company which was at its peak valued at $47 billion is largely worth nothing today.

“Now, SoftBank is possibly going to lose billions of dollars (in the interim); other investors will also have red eyes. …Simply, for WeWork, there is no winner here as they have just lost a leader and possibly imperiled the company in the process “, I wrote in 2019.

An African proverb is clear – “no man, no matter how wealthy, can prepare enough food for his kinsmen, but if those kinsmen make food for him, he will be unable to consume the whole food”. Too bad, the food was too much for the WeWork team.

The Japanese investment giant SoftBank posted a net loss of $6.2 billion for the quarter ending Sept. 30 — and much of that can be owed to the decline and bankruptcy of WeWork. SoftBank has been WeWork’s main investor since 2017, and bailed out the company for $9.5 billion just three years ago, after WeWork’s botched IPO attempt. In total, SoftBank has lost more than $14 billion on WeWork; earlier this year, SoftBank founder Masayoshi Son called the investment “a stain on my life.” (LinkedIn News)

WeWork Inc. (NYSE: WE) (“WeWork” or “the Company”), the leading global flexible space provider, today announced that it has commenced a comprehensive reorganization to strengthen its capital structure and financial performance and best position the Company for future success. The Company maintains the strong support of its key financial stakeholders and has entered into a Restructuring Support Agreement (“RSA”) with holders representing approximately 92% of its secured notes to drastically reduce the Company’s existing funded debt and expedite the restructuring process. During this period, WeWork will further rationalize its commercial office lease portfolio while focusing on business continuity and delivering best-in-class services to its members, as global operations are expected to continue as usual.

To successfully achieve its goals, WeWork Inc. and certain of its entities filed for protection under Chapter 11 of the U.S. Bankruptcy Code, and intend to file recognition proceedings in Canada under Part IV of the Companies’ Creditors Arrangement Act (the “CCAA Recognition Proceedings”). WeWork’s locations outside of the U.S. and Canada are not part of this process. WeWork’s franchisees around the world are similarly not affected by these proceedings.

WeWork has a deliberate and value maximizing lease rejection plan that is expected to position the company for operational and financial success. As part of today’s filing, WeWork is requesting the ability to reject the leases of certain locations, which are largely non-operational and all affected members have received advanced notice.

David Tolley, CEO of WeWork said, “It is the WeWork community that makes us successful. Our more than half-million members around the world turn to us for the best-in-class spaces, hospitality, and technology that our 2,500 dedicated employees and valued partners provide. WeWork has a strong foundation, a dynamic business, and a bright future.”

“Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet,” Tolley continued. “We defined a new category of working, and these steps will enable us to remain the global leader in flexible work. I am deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the Restructuring Support Agreement. We remain committed to investing in our products, services, and world-class team of employees to support our community.”

WeWork is filing with the Court a series of customary “First Day Motions” to facilitate a smooth transition into the process and to support operations throughout its cases, which it expects to be approved in short order. The Company will continue servicing its existing members, vendors, partners, and other stakeholders in the ordinary course of business. WeWork expects to have the financial liquidity to execute these proceedings and continue business in the ordinary course.