…Demands probe of lending bank
The approval of N11 billion loan by members of Enugu State House of Assembly for the outgoing government of Sullivan Chime has continued to generate negative reactions from stakeholders in the state.
A gubernatorial aspirant of the Peoples Democratic Party, PDP, Mr. Chinedu Hillary Onu, in a press release issued in Enugu Sunday, said that the huge borrowing coming in the midst of the election season and barely five months to the end of the Chime administration was ill timed and capable of portraying the governor and the party in bad light.
Warning the lending bank that he would not be willing to repay such a huge loan that would attract over N2 billon interest if elected governor in the forthcoming election, Onu said that it would not be fair to the people of the State to approve any repayment of such “carelessly advanced loans” because it is not in the interest of our people.
He, however, demanded a proper probe of the lending bank to determine its level of social responsibility to the state to merit extracting such a huge profit from the State’s meagre public funds.
He called on other gubernatorial aspirants across party lines to note that the larger interest of the State is at stake and should rise in unison against this act which he pointed out was not in the interest of the peope.
The Press Release:
My attention has been drawn to media reports to the effect that the House of Assembly, Enugu State on Thursday, 13th November, assented to a request by the outgoing Governor Sullivan Chime’s administration to take a loan of N11 billion with a claim that the loan is for completing on-going projects initiated by the governor.
While believing that the approval of the House of Assembly is carried within the ambits of the law and the approved budget for the year, I am concerned that it is ill timed and capable of portraying our dear governor and Party in bad light. There are already public outcries in several quarters against the intended borrowing which, coming in the midst of the election
season and barely 5 months to the end of the administration, is awkward, especially for an administration that is not known so far for borrowing.
As citizens of the State, we are all witnesses to the many infrastructure projects executed by the Governor. The governor however needs to be assured that government, as usually said, is a continuum, and successive governments should not abandon the work of improving the State. The entire development of the State will not be possible in one administration. As one of the front contenders of the office of the governor of Enugu State, I wish to assure the governor and the entire people of the State that I will work to complete any on-gong or uncompleted project of the current administration and past administrations.
On the basis of above, I wish to state clearly that it will not be positive for the in-coming government of the State to be saddled with any debts. It is actually better and more sensible to handover any uncompleted projects to the new administration than to hand it a huge debt overhang with associated interest cost elements. Also, a loan taken in a hurry by an administration that has few months to go will likely be poorly negotiated because the government cannot negotiate from a point of strength.
Another issue is that the current fall in oil prices calls for greater caution. In a State like Enugu with low federal allocation, after taking care of the wage bill and administrative overheads, it will take not less than 18-24months to repay a loan of such magnitude, especially in the light of the admission by the government in the same report that it found it difficult to repay a previous loan of only N1billion.
I believe also that the governor has not been properly advised about the true implications of such last-minute borrowing. At going commercial lending rate of above 17% and other upfront charges added, a loan of N11billion from a commercial bank will accumulate interest of over N2billion in just one year –a sum that should be saved and properly applied to the needs of the people of the State instead of serving to swell the profits of commercial bankers who act as shylocks, taking advantage of corrupt public officers to overcharge and defraud government while contributing little to the progress of the State.
For the lending bank, I need to state categorically and warn that, as a candidate believing to take over the mantle of leadership of the State come May 29, 2015, should they ignore the public outcry and extend the loan to the government, I do not think it will be fair to the people of the State to approve any repayment of such carelessly advanced loans because it is not in the interest of our people. In fact I will support the institution of a proper probe against the lending which, coming at this very moment, speaks volume. It will be necessary to ask the bank some pertinent questions now including how many jobs they have been able to give to the people of Enugu State and how many corporate social responsibility projects they have carried out to the benefit of the State to merit extracting such a huge profit of over N2billion from the State’s meagre public funds.
I submit that it will truly be disheartening to have a government that is not able to pay workers’ salaries or meet other developmental obligations because of debt overhang from previous administration. I therefore call on other aspirants, across party lines to note that the larger interest of our State is at stake and should rise in unison against this act.
CHINEDU HILLARY ONU
Enugu State Gubernatorial Aspirant, Peoples Democratic Party (PDP)