With the allusions of Second Republic Minister of Justice and Attorney General of the Federation, Chief Richard Akinjide (SAN) that state governors are the biggest thieves in the country, Nigerians are beginning to watch with keen interest another round of borrowing spree in the country.

By Gbenga Oke

Some governors have maintained that they have no option than borrowing on account of the quantum of debts they met on ground with some claiming that they met empty treasuries. At the rate some of the governors are going about fresh loans, there is fear that they may unleash more debts on the states.

Several reasons were adduced for the borrowing including need to improve on the infrastructure and backlog of unpaid civil servants salaries

Political analysts have been wondering why the governors, who are not up 100 days in office have embarked on borrowing spree. Leading in the moves for fresh loans are Rivers and Abia state governments that had both approached the banks to borrow a whooping sum of 30 billion respectively.

Govs are stealing state resources –Akinjide

Peeved with the development Chief  Akinjide, in a television interview accused governors of corruption, saying: “States are broke because governors are stealing money and that is why they are unable to pay salaries because they are stealing. The biggest thieves are the governors.”

Fiscal policy

He went further: “States get billions of naira allocation every month and yet there is nothing to show for it as majority of people in government lack honour.”

Govs are reckless – Junaid Mohammed

Also speaking, Second Republic lawmaker, Dr. Junaid Mohammed, blamed the quantum of borrowing on the fiscal policy of the government that aided corruption by some of the governors.

His words: “It is very sad these governors collect money in the name of services but the services are not rendered. The governors are overwhelmingly corrupt and reckless and they have successfully pocketed the state Houses of Assembly members in their states. So the check and balances that are supposed to take place are not existing at all and that is why we have majority of these governors just borrowing money from banks anyhow.

“The process is such that any state governor that has majority of his party members as state house of Assembly members thinks he has the right to go borrow money anyhow whether he has the capacity to pay back or not.”

Civil servants, banks also culpable

He also accused civil servants and bankers of conniving with the state governors in the looting of the states. “The civil servants and the bankers are collaborators in this scam. When you go to bank to borrow, after the bank has finished scrutinizing your papers with the collateral and how the money will be paid back, what they do is to join the governors in mortgaging the future of a whole state by way of mortgaging the monthly allocations from the Federal Government.

That is very dangerous and those governors will give them guarantee that when the federal allocations comes in, they will pay back. That is very dangerous and it is the fault of the Federal Government to allow states to borrow money against their monthly allocations. they should not allow the state governments to borrow money against their monthly allocations. They should also make it impossible for states to collect money directly from the local government funds because the state and local government joint account is a like a cash cow.

“These governors should not be allowed to go and destroy the states again. Before President Buhari gave bailout to some of those states, majority of them could not afford to pay salaries. I don’t think there is a way any state can survive with this financial recklessness going on in the states,” he said.

APC opposes Rivers N30 billion loan

The borrowing of 30billion by Governor Nyesom Wike of Rivers state in two tranches under one month raised an outcry in the state. Rivers State House of Assembly approved the request made by Governor Nyesom Wike to secure a N10 billion loan from Zenith Bank in the first week of assuming office and another 20 billion weeks later.

The House approved the loan after deliberating on the governor’s request letter read by  Speaker Ikuinyi Ibani.

According to the letter, the fund is meant for rehabilitation of roads and some other projects within the governor’s first 100 days in office.

Concurring, the lawmakers said, “the money is small but it shows that our governor will be diligent with public funds and that is why all the 28 lawmakers gave their support to the governor to go ahead.”

The governor in his letter to the House said the loan would be repaid from Internally Generated Revenue, IGR adding that it would be used to complete roads started by the previous government in the state.

Reacting to the development, the Rivers state All Progressives Congress, APC said the borrowing N30 billion in a month of the administration of Governor Wike is part of the plot by the governor to plunge the state into an abyss of debt and economic servitude.

The party said the loan is just a child’s play as the governor has commenced negotiations with other banks for more loans.

The Publicity Secretary of APC in the state said, “The governor of Rivers state plans to obtain more loans to the tune of N100 billion from other banks. The situation we found ourselves is very sad and it is unfortunate .”

Benue borrowed N10 billion to pay salaries –Ortom

On assumption of office, Governor Samuel Ortom of Benue State told citizens of the state that his administration will borrow N10 billion to pay workers’ salaries.

He said part of the money will be for the smooth take off of his administration which includes the legislature, cars for commissioners and advisers.

His words: “When we applied to the State Assembly for approval to borrow the money we gave details of what it was intended for. I said it was going to be used to pay two months salaries because on the average, we expend N3.7 billion on the payment of monthly salaries.

“The breakdown is as follows: wage bill is about N2.8 billion while the overhead per month across board runs to about N700 million. So if you add the two months salary together, you will be spending about N7.4 billion or close to N7.5 billion on salaries alone thereby leaving a balance of about N2.5 billion out of the N10 billion we borrowed.”

However, opposition in the state have alleged that Governor Ortom mismanaged the 10 billion he borrowed recently.

Benue Speaker, Terkimbi Ikyange, said that reliable information from the state Ministry of Finance indicated that the state treasury was empty and that workers were owed five months salaries.

Behind Niger State’s  N1.8 billion loan

The Niger state government was not left out in the borrowing as the state Governor, Alhaji Abubakar Sani Bello, wrote a letter to the State House Assembly asking for an approval of N1.85billion loan to pay workers salaries in the state.

According to him, the inability of the local government councils to mobilise enough money to pay workers salaries and arrears led to the borrowing.

The speaker of the House of Assembly, Hon Marafa Ahmed, read a letter from the governor requesting for a loan that will make up for the shortfall in the 25 local councils’ 2015 budget.

Without loan we can’t operate on the Plateau –Lalong

Governor Simon Lalong of Plateau State said the state will borrow money to address security and financial challenges facing his state.

The Governor said there is urgent need to get a loan because the debt he met on ground was more than N104 billion and with that level of debt, his administration will have to borrow to pay workers’ salaries.

Abia APC condemns N30 billion loan

The All Progressives Grand Alliance,  APGA, in Abia State condemned the approval given to Governor Okezie Ikpeazu to borrow N30 billion from commercial banks, saying some relevant rules were not followed.

In a statement signed by its Publicity Secretary, Madu Chikwendu, the party described as “embarrassing,” the passage of the resolution by the House of Assembly authorizing the governor to borrow N30 billion.

The party said that much as it would welcome “any genuine effort to develop the state, we categorically reject the hurriedly packaged and approved resolution.”

Chikwendu said investigation by the party showed that “there was no public hearing and secondly, there is no evidence that any of the legislators consulted their respective constituencies.  Additionally, very important and legal provisions were neglected. These include details about the interest rates, mode of repayment, duration of facility, security, moratorium and others.

“We note with consternation the grand deception employed by the ruling party for the hasty passage of the loan. For instance, the purported assurance by the Speaker that the loan would be repaid through the over N1 billion generated from Aba is an obvious fallacy.

“We are aware that Abia has never declared more than N250 million monthly IGR in the last few years. More laughable is the information that Abia is the least indebted state and needs to borrow.”