Follow Us on Google
From Paul Osuyi, Asaba
A Civil Society Organisation promoting economic and ecological justice in the Niger Delta, Policy Alert, has urged the Delta State House of Assembly to reverse the recent approval of N120 billion loan for the outgoing administration of Governor Ifeanyi Okowa.
Policy Alert, in a statement by its Programme Officer (Governance Reforms and Anti-Corruption), Faith Paulinus, said reversing the loan approval was in the best interest of the state and future generations.
The organisation also asked the Fiscal Responsibility Commission to activate its powers provided by Section 2(1b) of the Fiscal Responsibility Act (2007), to cause an investigation into whether any person violated any provision of the Act in the loan approval.
This is coming on the heels of an explanation by the state government that N100 billion of the N120 billion was not a fresh loan but an existing discounting facility for which the executive sought the consent of the legislature to change the lead agent.
The government also said the N20 billion would be invested in a gas project that would yield profits and other benefits in due course, noting that the N20 billion loan would be repaid from the monthly allocation within a specific period.
Regardless, Policy Alert insists that the N120 billion was a fresh loan that would plunge the state further into debt, maintaining that the loan request was ill-timed.
It described the government’s explanation as insensitive to the citizenry.
According to the statement, as of September 2022, the domestic debt of Delta stood at N272.61 billion, a figure it said made Delta the most indebted state Delta State and the second most indebted state in Nigeria, after Lagos.
“With the latest approval of N120 billion by the state Assembly, the Delta State’s domestic debt profile will spike to an unprecedented level of at least N392.61 billion, amounting to over N69,000 per capita, excluding outstanding payment certificates and other contingent liabilities.”
The organisation noted that “the proposed facilities would be the latest in a string of spurious loans that have been acquired by the state government in recent times.
“It would be recalled that in April 2022, the state Assembly had approved a N150 billion loan for the state government. It is even worse that the state government has been using future payments of 13 per cent derivation arrears from the Federal Government to back these facilities.
“From an inter-generational perspective, this is like eating your own lunch and also eating the share of your children.
“The government’s argument that these are not loans but discounting facilities is not just lame but insensitive to the citizenry who will be responsible for paying back these debts.
“We are even more concerned that these loans are coming on the eve of the 2023 general elections with the state governor being the vice presidential candidate of a political party and the Speaker of the Assembly being a governorship candidate.
“This has fueled speculations that the resources could be used for politicking rather than for capital projects as required by law.”
The organisation noted that these recent borrowings are in contravention of the federal and state fiscal responsibility laws which mandate state governments to present to the public through the legislature a clear cost-benefit analysis for proposed loans and to clearly demonstrate that the loan will not push the government into an unsustainable debt situation and will be spent on self-liquidating capital projects.
