By Chioma Onuegbu, Uyo

A Civil Society Organisation based in Akwa Ibom State, Policy Alert, has condemned the approval of series of loans for government by the state Legislature without due process.

This was contained in a statement signed by the organisation’s Programme Officer, Fiscal Reforms and Anti-Corruption, Mr. Faith Paulinus, and made available to newsmen yesterday in Uyo.

Policy Alert noted that in the last 12 months, several loan requests have been approved by the state legislature in a hasty, irregular, and illegal manner, without due process, and in contravention of extant laws.

It called on the Fiscal Responsibility Commission(FRC) to launch an investigation into the loan approval processes of the financial institutions involved as they may have failed to request and obtain proof of compliance with the laid down conditions for borrowing in accordance with extant laws.

It reads in part: “Policy Alert, a Civil Society Organisation promoting economic and ecological justice in the Niger Delta, calls on Nigeria’s Fiscal Responsibility Commission to investigate series of loans acquired by Akwa Ibom State government obtained without due process and in breach of the Fiscal Responsibility Act 2007 and the Akwa Ibom State Fiscal Responsibility Law 2020.

“Contrary to what the State Governor, the Finance Commissioner, and the legislature would have us believe by their strange denials, Policy Alert insists that the facility, by whatever name called, amounts to a loan.

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“The proposed N150 billion facility would be the latest in a string of spurious loans that have been acquired by the state government in recent times. The collusion of both arms of government to impose an unsustainable debt burden on the state is highly deplorable.

” Data from the Debt Management Office, Abuja shows that as of September 30, 2021, Akwa Ibom State’s domestic debt stock stood at N234.85 billion.

” That makes it the most indebted state in Nigeria in per capita terms. This portends disaster for fiscal space and development prospects of the state in the years to come.”

The organisation maintained that both federal and state fiscal responsibility laws have provisions that mandate state governments intending to borrow to present through the legislature to the public a cost-benefit analysis, detailing the economic and social benefits of the intended borrowing.

It added that the Laws clearly demonstrates that the loan would not push the government into an unsustainable debt situation, but would be spent on self-liquidating capital projects, stressing that what is currently playing out in the State is the reverse of the legal requirement.

“It could be recalled that Policy Alert had in November 2021 publicised information that the Akwa Ibom State government had drawn down N171.2 billion and N12.18 billion under the heading of “13 percent derivation revenue arrears” in the third and fourth quarters of 2021 respectively.

“The organization specifically associated the stated arrears with the recalculated oil derivation revenue arising from a court judgment in favour of four Niger Delta states in which Akwa Ibom State stands to receive about US$2.258 billion or N926.9 billion.

“Suspecting that the income may have been a facility from a commercial bank on the basis of the court judgment, Policy Alert subsequently issued a statement advising state governments in the Niger Delta to avoid the temptation to use the 13 percent derivation judgment as a guarantee for loans.

“The recent loan request has validated our position that the state government may have been secretly and illegally obtaining commercial bank facilities on the basis of that court judgment”, the statement said.

Policy Alert further stated, “We find the acquiescence of the Akwa Ibom State House of Assembly on the recent loan requests highly disappointing and deem it a generational betrayal.

“We are particularly disturbed that this latest loan request is coming barely weeks after the governor made public his succession plan, giving the impression that these funds may end up being used to prosecute his 2023 political agenda.

“It is not just suspect but odious whichever way you look at it, and must be resisted by all right-thinking citizens”