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Group condemns National Assembly ‘reckless approval’ of loans

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National AssemblySocial Action, a rights activist group, has condemned in strong terms what it called “reckless loan approvals” by the Nigerian National Assembly to certain states.

Speaking about the recent loan approval granted to Edo State government, the group, in a statement signed by the head, Vivian Belonwu, titled “Refrain from Reckless Loan Approvals – Social Action Charges National Assembly”, alleged that the loan ‘is not unjustifiable’.

It also chided the National Assembly for not knowing “that what is needed now are pragmatic steps to return these states onto the path of economic wellbeing instead of approvals for more loans”.

Below is the full content of the statement:

“Press Statement – With Nigeria currently grappling with yet another loan burden and the fear of repayment following profound indebtedness of several states, ministries and agencies of the country, the National Assembly need refrain from worsening the hardship of Nigerians through gratuitous loan approvals.

“In a country where over two – thirds of its federating states has gone bankrupt and unable to meet statutory obligations as basic as payment of workers’ wages, the National Assembly should have known and in fact ought to know that what is needed now are pragmatic steps to return these states onto the path of economic wellbeing instead of approvals for more loans as it recently granted to Edo state to borrow a whooping sum of $75 million from the World bank.

“This latest loan approval for Edo state is not only unjustifiable but a sad disservice to the poor suffering masses of the state that no doubt will bear the burden of these debts. Evidence on ground show that the Edo state government has not sufficiently matched the several loans it has acquired over the years with commensurate infrastructural development and service delivery. 

“It is also on record that the nation’s Debt Management Office, D.M.O, had in March, 2013, warned some states including Edo state to refrain from further borrowings given the unduly unsustainable high profile these states had reached in indebtedness. Edo state which ranks among the most indebted states in the country with an external debt of $123.1 million as at December, 2014 and an equally staggering sum of N48,190,150, 127.26 billion in domestic debt as of December 2013 also has a history of poor procurement practices.

“Indices have also shown that virtually all the loans obtained by authorities in the country (on the behalf of Nigerians) were all either misappropriated or outrightly stolen; none achieved what it was obtained for. On the other hand, similar indicators also show that it is the ordinary Nigerian citizens that bear the burden of these loans as was evidently demonstrated with the states salary crisis.

“According to the Programmes Manager of Social Development Integrated Centre (Social Action) Mr Ken Henshaw, “what I expect the National Assembly to do with regards to the debt crisis currently facing the country is to institute full scale investigation of all the loan acquisitions by states, ministries, agencies and departments in the country in order to ascertain the state of these loans with a view to recovering non-performing ones instead of approving more loans that are likely going to end up the way of the previous ones”.

“The Social Development Integrated Centre (Social Action) therefore calls on the National Assembly to halt any further approval of loans for any state, ministry or agency in the country until full audit of the loans have been carried out and their application established.

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