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CSO raises alarm over N48 billion Loan acquired by AKSG in 2019, insists Debt Profile suspicious, unsustainable

CSO raises alarm over N48 billion Loan acquired by AKSG in 2019, insists Debt Profile suspicious, unsustainable

Udom

By Ekemini Simon

Policy Alert, a non-governmental organization working to promote social, economic and ecological justice in the Niger Delta, has raised an alarm over the N48 billion loan acquired by the Akwa Ibom State Government in 2019.

The Civil Society Organization has said that the fresh loan acquisition has caused the debt profile of the State to reach an unsustainable level.

Speaking on Wednesday during the 2020 edition of its annual Open Budget Forum (OBF), Iniobong Usen, the organisation’s Programme Lead on Extractives and Open Data, noted that the state acquired fresh loans to the tune of N48billion in 2019 as against N6.7billion in loans acquired in 2018.

While describing the 2019 loan acquisition as a mind-boggling 623 percent year-on-year increase, he explained that quite significant is the fact that 2019 was an election year, which makes the sharp rise rather suspicious.

While noting that in 2020, the State plans to acquire another N38.1billion in loans, he added ” It is particularly disturbing that a significant part of this new debt will be spent on the Coconut Refinery Project and the 21 Storey Building Project which both received a loan injection of N10 billion last year.

“In 2019 the state spent N13.9billion on loan repayments alone. When we consider that these are commercial bank loans with high interest rates, the situation becomes all the more worrisome, as it translates to a huge debt burden for future generations.”

The organization cautioned the state government against taking out loans for projects that are not self-liquidating.

Policy Alert however applauded the State House of Assembly over the passage of the Fiscal Responsibility Bill, calling on the state governor to give assent to the Bill.

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The Organization pointed out that when bill finally becomes law in the state, it would become an offence for the executive to acquire loans without a proper cost-benefit analysis, as is currently the case in Akwa Ibom State.

The CSO called on the State Government to stem the seeming appetite for debt accumulation, especially in this period which investments should be tailored towards addressing the impacts of Covid19 on the state’s economy.

The organization also commended the State Executive Council for approving the establishment of an Audit Service Commission for the state, noting that “an independent audit cadre for the state was long overdue as it would entrench principles of transparency, accountability, value for money and integrity in public financial management in the state, and eventually lead to improved service delivery.”

Now in its sixth year, Akwa Ibom State Open Budget Forum (OBF) is an annual event organized by Policy Alert where government representatives, civil society organisations, community representatives, media practitioners, representatives of labour and professional groups and other stakeholders meet to deliberate on the state budget in an open manner, to ensure the process meets the required standards of transparency, responsiveness, accountability and citizens’ engagement.

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