Loans: Ugwuanyi, critics in battle of wits

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Edward-Ubosi-new-Speaker-of-ENHAAs debates continue in Enugu State over the current approval granted Governor Ifeanyi Ugwuanyi by the State House of Assembly to obtain loans to the tune of N14.2b, Assistant Editor, Dare Odufowokan, examines the various arguments in this report.

Although the Government of Enugu state has refuted claims by critics of Governor Ifeanyi Ugwuanyi that he got the State House of Assembly to secretly approved a loan request of N14.2 Billion recently presented to it by the Enugu State Executive Council, the last may not have been heard of the issue as groups and individuals opposed to the procurement of the loan argued that the move will further plunge the state into indebtedness. This is even as the Governor insists that without the loan, Enugu, like many other states of the federation, will be unable to wriggle out of the financial difficulty caused by the dwindling federal allocations.

Checks by The Nation revealed that as part of the N14.2 Billion loan request, the Enugu State government intends to procure the N4.207 billion bail-out funds designed by the Federal Government to help with the state to offset backlog of salaries and arrears. In addition to this, the administration is seeking another N10billion to be expended on the infrastructural development of the state.

The state executive committee had met and after deliberations on the precarious financial situation of the government, agreed to pass the loan request to the Legislative arm of government. Last week, the House received the loan request and worked on it. It eventually gave its nod to the plan by the Governor to borrow in order to finance its responsibilities to workers and give the people of the state the much craved dividends of democracy.

But hardly was the approval made public before opposition to it mounted, with some keen watchers of the politics of the state accusing the governor of planning to impoverish the state through needless borrowings. They recalled that the immediate past administration of ex-governor Sullivan Chime was alleged to have built for the state an alarming debt profile to the the of N62.8 billion.

Others argue that since the government is not owing worker’s salaries, there is no need for it to procure the bail out fund meant for that purpose. The Governor was also urges to use the fund available to him, and not loans for infrastructural development of the state pending the time allocations from the federal government will improve.

But Governor Ugwuanyi said his government’s plan is to ” separately procure the N4.207 billion bailout fund through the Central Bank of Nigeria (CBN) for “the liquidation of outstanding salaries, pension and pension arrears and subventions for parastatals, institutions and boards” and N10 billion loan from the apex bank for infrastructural and developmental projects in the state, respectively.

According to explanations by the government following raving debate within and outside the state, the said loans were in response to the negative development in the nation’s oil sector which has adversely reduced the state’s revenue allocation from federation account to a level that is not encouraging. The Governor and his men insist it is not pout of place for a ‘serious administration to seek ways of solving pressing financial problems.”

In a reaction to the development, the Enugu Restoration Group (ERG), called on the state lawmakers to ”immediately retrace their steps and withdraw the approval granted Governor Ugwuanyi to borrow more money on behalf of the poor masses of the state. The group strongly condemned what it termed alleged conduct of government business in secrecy, saying that the speed with which the Assembly proceed to approve the loan was very questioning.

In a statement signed by its Publicity Secretary, Comrade Sylvester Uwakwe, the group lashed at the State House of Assembly for approving the loan, insisting that the move would further enslave the current and unborn generations of Enugu State.

“The reason adduced for the loan, which is to pay salaries and develop infrastructure, is untenable and suspicious. This is because Enugu is not owing salaries. The last administration borrowed N11billion in its twilight for these same purposes. What came out of that needless debt is left to be imagined. It is our firm belief that we do not need to go borrowing again,” the group said.

“We, therefore, call on the State House of Assembly, the Central Bank of Nigerian and other relevant financial regulatory agencies to stop the loan. We also wish to make it categorically clear that this loan is not in any way in the interest of the people of the state and as such, will be questioned sooner or later by the good people of Enugu State.

The group said there would not have been any need for the House of Assembly to approve the loan in a closed door session if the administration if the loan was for public good.

Also reacting to the loan approval, Coordinator of South East Political Forum (SEPF), Dr. Moses Abba, said it was surprising that the Governor who is less than four months old in office, would be seeking to incur such a huge debt, which would definitely add to the much condemned debt profile occasioned by his predecessor.

“Before approving such huge loan, the House of Assembly ought to conduct a public hearing where details of such needs and expenditure warranting the loan should be made public for the people of the state to know what the fund is meant for because as we speak, it is on record that the immediate past administration borrowed N11billion without telling the people how it was spent till today.

It is also a fact that Enugu is not owing salaries. So, we are at a loss over what the huge loan is needed for. Until such explanations are made, the CBN should halt the release of the fund. Otherwise, they should know that they are giving the money at their own risk. We want to tell you that our people say no to this loan. They must conduct a public hearing to feel the pulse of the people. We are urging our lawmakers to remain the conscience of the society. They should go and consult their constituents and see if they are in support of this loan. Otherwise, it will be on record that they did things that were against the interest of their people,” he said.

But Louis Amoke, the Senior Special Assistant on Media to the Enugu State Governor, said the said loans were in response to the negative development in the nation’s oil sector which has adversely reduced the state’s revenue allocation from federation account to a level that is not encouraging. According to him, it is on record that Enugu state is third from the bottom of the federation account and a civil service state depending on the federal allocation for the execution of most of her capital projects.

“Today, the story is no longer the same, as the revenue of the state like every other states of the federation keeps dwindling to an all-time-low, making it difficult for the state government to fulfill his campaign promises to the people of the state. It is therefore, encouraging to note that the Federal Government through the National Economic Council (NEC) saw the wisdom to offer bailouts to most states to enable them offset workers’ salaries and other entitlements relating to their welfare and assist the states execute some capital projects.

This basically informed the reason why the Enugu State Government recently embarked on the processes for the procurement of the funds to enable it consolidate on the on-going developmental projects in the state and deal with the issues of outstanding salaries for casual workers, pension and pension arrears and subventions for parastatals, institutions and boards in order to alleviate the sufferings of the workers in these government establishments which rely on the subventions to pay salaries. These government establishments include: the Institute of Management and Technology (IMT), Enugu State Transport Company (ENTRACO), Daily Star, Enugu State Water Corporation, among others,” he explained.

Explaining that the loan, as structured, is not likely to create problems for the state in future, Amoke said, “on the uniqueness, safety and convenient of the loans, it is pertinent to note that the said loans which are based on the outcome of the National Economic Council (NEC) meeting of June 2015, are to be secured by Excess Crude Account (ECA). Interestingly, the loans carry a single digit interest rate of nine per cent and tenure of 20 years repayment.”

Debunking allegation of secrecy over the loan, the Governor’s aide said there was no secrecy in the processes of the approval for the procurement of the said loans. According to him, the proceedings for the authorization of the loans by the Enugu State House of Assembly followed due process and was done in the open in the presence of the media and has no secrecy attached to it.

“May I therefore, state that the loans are in the overall interest of the people of the state who will eventually reap the benefits associated with it in the areas of workers’ welfare, infrastructural development, advancement of good governance and other people-oriented programmes of the Gov. Ifeanyi Ugwuanyi-led administration in Enugu State. The Governor by this move has demonstrated once again his unflinching commitment to selfless service and the actualization of his 4-point agenda which he holds very dear to his heart.

In spite of the economic challenges, Gov. Ugwuanyi has made tremendous achievements in providing quality leadership and infrastructural development in the state. The governor has also introduced chains of innovations and ideas aimed at boosting the Internally Generated Revenue (IGR) of the state and making Enugu State the investment destination of choice in the South East geo-political zone. He has equally maintained the tradition of prompt payment of salaries of workers in the Ministries.

The CBN loans will no doubt consolidate on these remarkable achievements and facilitate his administration’s drive to bring good governance to the doorsteps of the people of the state with a firm commitment to their welfare as true heroes of democracy. It is therefore the responsibility of the public especially the people of the state to continue to give the present administration the support and cooperation it deserves to move the state forward.

Amoke is the Senior Special Assistant on Media to the Enugu State Governor,’ he argued.

The Nation

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