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Controversial Enugu N11B Loan: ‘I will not repay if elected governor’, Onu warns

…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.

SIGNED

CHINEDU HILLARY ONU

Enugu State Gubernatorial Aspirant, Peoples Democratic Party (PDP)

7 comments

  1. ENUGU SHOULD SPEAK B4 THE FUTURE OF OUR STATE BE MORTGATE WITH COMPOUND INTREST NEWS. PLS OTHER NEWSPAPERS SHOULD HELP SPREAD THIS NEWS

  2. why bordered about a loan u might not inherit…to talk is silver but silence is gold… people of the world

  3. Chime claims credit for zoning governorship seat to Nsukka but his current action leaves a lot to be desired.

    If the Nsukka governor is so encumbered that he is unable to perform, unable to pay workers salaries, is it not a quick way to ensure he loses that seat? Ndi Enugu should be awake because a grand scheme may be on to rubbish the ability of the next governor to have funds to run government and execute developmental projects.

    Ifeanyi Ugwuanyi, if truly serious, should be heard voice out dissent otherwise it will be too late by the time he takes over as he hopes to. It is a wonder he is not noticing the circles being drawn around him.

  4. 11 billion naira at this time…only God knows…

  5. The hallmark of the borrowing is state’s welfare, since you ‘ve tried to this extent but cannot accomplish all that you ‘ve for us, it simply imply that you faild in that aspect so don’t in cure debt for your successor for him to be judged based on what He Will do and not debt paid.

  6. Sullivan Chime une mu nwoke, Kedu ife iji N11billion emeh kita ina apu-apu naa office???

  7. Sullivan Chime, my brother what do u want to do with N11billion now that u are leaving loin building Enugu come may 29th 2015????? OKWA OSHII!!!

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