Senate warns govs against fresh debt burden
By Henry Umoru & Joseph Erunke
ABUJA — THE Senate, yesterday, warned state governors against creating debt burden for future generations, just as it urged them to stop what it described as excessive borrowing.
The Senate is, however, worried that most of the states were not seeking foreign loans for projects and programmes that would have direct impact on the lives of their people.
Speaking when Commissioners of Finance appeared before the Senate Committee on Local and Foreign Debts, chairman of the Committee, Senator Ehigie Uzamere (ACN, Edo South) said: “It is very sad the way we are going in this country especially in terms of borrowing.
Our children yet unborn must not suffer from what they don’t know anything about. When we approve these loans, our committee will visit the states to see what the governors are doing with the loans.”
Also in his contribution, a member of the committee, Senator Gbenga Obadara (ACN, Ogun Central) who charged the states to align their borrowing plans with the needs of the masses, said: “There is no reason for any state to over-borrow. The governors must think of people that will pay the debt in 10 years’ time.
“We, as lawmakers, find it difficult to see the states in debt trap. We have states seeking $100 million. Their debt will continue to pile up. One per cent of loan interest today will become very huge in 10 years’ time.
“ We should shun reckless borrowing as much as possible. Our committee, therefore, advises state governors to cut their cloths according to their sizes.”
Earlier, the Ondo State Commissioner for Finance, Mr Yele Ogundipe, had submitted a request of $50 million for health programmes and another $27.9 million for youth employment.
Also, the Enugu State Commissioner for Finance, Mr Ralph Nnaji, submitted a request of $50 million loan for watershed management project, $40 million for youth empowerment, $18 million and $40 million for energy project.
Against the backdrop that only eight out of the 36 state finance commissioners appeared before the committee, the Senators advised the Commissioner of Finance in Ebonyi State and Chairman of State Finance Commissioners, Mr Timothy Oddah, to inform his members to come forward with their borrowing presentations for immediate treatment.
The money the states are asking for would come from the World Bank for execution of some basic projects among which include fight against erosion, provision of water and provision of jobs, among others.
Finance Commissioners of Anambra, Delta, Kwara,Enugu, Bayelsa,Ondo,Nigerand Kogi were at the Senate to submit world bank assisted Loan projects.
Delta state, in its presentation made through its Finance Commissioner, Bernard Okumagba, said it was interested in accessing the sum of $39.78 million. The state said the money had been tentatively allocated to it based on the original credit and would be scaled up to include the EU grant when the approval was released.
The money, according to the commissioner, would be used in the state’s proposed pipeline project under the Medium-Term (2012-2014) External Borrowing Plan.
The commissioner said the money was a fallout of Governor Uduaghan’s visit to the World Bank headquarters in 2009 where he discussed possible assistance from the bank towards the development of Delta State, adding, “Subsequently, a Public Expenditure Management and Financial Accountability Review study was conducted in Delta State and a final report produced in 2010.This was followed by several other appraisal missions which culminated in project negotiation between the Federal Ministry of Finance, World Bank and other participating states on November 1, 2011 which was followed by the World Bank Board approval on March 6,2012.
‘’DeltaStateis interested in the approval of the project which is expected to create about 16,100 jobs for the youths. Besides, about 7,500 persons will have access to services such as basic health, education, water and agric extension, supported under Community Driven Development Sub-component in benefiting communities.”