STAKEHOLDERS DECRY IMPOVERISHING S’EAST DEBT BURDEN, URGE GOVERNORS TO BORROW FOR PRODUCTION, NOT ‘VAIN PROJECTS’
– State Governments should borrow to complete productive projects started by their predecessors to avoid abandoned projects
Enugu – Civil Rights Concern (CRC), a Non Governmental Organization, NGO in collaboration with her partners, Christian Aid Nigeria, a UK-based organization, and the Civil Society Legislative Advocacy Centre(CISLAC) on Saturday in Enugu organized a one day Zonal dialogue on South East public debt financing and Sustainability.
The consensus from participants was that State Governments in the region should lessen borrowing and loans when necessary should be for production driven capital projects, not vain or white elephant projects that increase poverty in the region without generating the needed revenue and economic growth to repay such loans.
A case study was that of borrowing from a commercial bank at high interest rate by the Sullivan Chime administration in Enugu State in 2015 to fund the construction of a ‘bogus’ ultra modern state Secretariat whereas the International Conference Centre started by the preceding administration and which has huge revenue generating capacity was abandoned.
Participants came from the five South East states and were drawn from civil society organizations such as the South East Good Governance Project (SEGGOP), representatives of the financial and business sectors such as Institute of Chartered Accountants of Nigeria (ICAN), Tax Justice Platform and Tax Association of Nigeria, the academia and representatives of the South East State Governments, such as the offices of the states Accountant Generals and their Debt Offices.
They equally noted that the situation has continued to make life unbearable for the poor masses in the region, and responsible for the worrisome multi dimensional poverty rate in the geo political zone.
Speaking at the event, Executive Director, CRC, Mr. Okey Onyeka, explained that the organization is working on matters that improve accountability and access to Basic Social Services (BSS) in areas such as Elections and electoral process Education; Agriculture, Infrastructure and Health sectors.He disclosed that CRC is currently working with the partners on public debt financing and sustainability, adding that it has reviewed the debt financing and suitability challenges in the country, focusing mainly on the South East.
According to Onyeka, “the financing of our public projects and programmed through borrowed money for quite a long time now has really created a lot of problems and untold hardship for the Nigerian citizens, especially the vulnerable ones, including those in South East Nigeria”. He decried the fact that despite the huge debt, by the South East states, the capacities the borrowing are supposed to create in areas as infrastructure and human capital development are absent, hence, leading to increased multidimensional poverty in the region as captured in the 2022 report of the National Bureau for statistics NBS.
“So, this multi dimensional poverty Nigeria and South East are experiencing is as a result of the poor performance of our capital programmes, including the ones funded under public debt. And if you look at the country generally, you we see that alot of debts have been created, and people have begin to raise the question, as to say, ‘Debt rising poverty: is it the Souvenir of the elites to Nigerians’.
Onyeka, further lamented that the debt profile and poverty rate in South East states of Imo, Abia, Anambra, Enugu and Ebonyi keep rising almost on daily basis without any capacity being created in the states, maintaining that if not urgently addressed such development may jeopardize the entire economy of the geo political zone in the nearest future.
On the suggestion that the State Governments should be made not to take loans without the consent of the Civil society and other stakeholders in their states, Mr Chinonye Okegbe, a representative of the Enugu State Debt Management Office stated that such was not realistic, “The House of Assembly is constitutionally empowered to represent you and shall take decisions on your behalf, including taking loans by the State Government”
He however suggested that civil society organizations in the South East should track the quarterly budget performance of the states, as statutorily published on their websites.
Okegbe also noted that the rising debt profiles was due to inadequate funding and that State Governors borrow because of low Internally Generated Revenue (IGR).
Some of the participants who spoke at the event, frowned on the use of private contactors in revenue generation by states in the South East, positing that such method has done more harm than good to both the state and citizens, and promotes lack of accountability and transparency in governance.They however, advocated use of single treasury Account (TSA) and electronic system by the states, as it eliminates corruption and enhances the internally generated revenue IGR base of governments.The stakeholders equally faulted the new trend of proposing unrealistic bogus budgets by various states governor’s that hardly implement such budget up to 20 percent during the fiscal year.
In his contribution, Prof Titus Okeke from the Department of Marketing, Nnamdi Azikiwe University, Awka noted what he described as ‘IGR Politics’ which made states, nationwide to inflate their IGR figures since states with high IGR get higher allocations from the National cake.
The meeting which had members of the South East Good Governance project (SEGGOP), in attendance, is also serving as a peer review mechanism in the zone. In his own remark, the Convener, South East Good Governance Project (SEGGOP), Mazi Ikechukwu Bismarck Oji, MNSE, COREN , noted that the essence of the Zonal dialogue on South East public debt financing and Sustainability was in line with his group’s mandate.
According to him, SEGGOP aims at the promotion of Good Governance in the South East through the production of periodic, monthly and quarterly Good Governance Reports, from the 5 South East States so as to serve as a peer review mechanism, to constructively engage State Governments and other stakeholders in the region in good Governance advocacy.
He also noted that civil society organizations in the region would be better organized to constructively engage State Governments in the region, if they all collaborated.
A financial expert, and resource person at the meeting, Dr. Cosmas Ohaka in his presentation harped on the need for governments at all levels to reconsider the accumulation of domestic debt as it hurts the economy.“Although multilateral debts appear more expensive, they are better in the long run as it allows for free domestic resources for local entrepreneurs which facilitates investments in the respective states and reduces unemployment and poverty.
He advocated that the South East state governments should strive to reduce their exposure to loans by drafting more realistic budgets. Quoting the NBS report for 2022, Ohaka, recalled that Imo state with a total domestic debt stock of N220.8billion is the seventh in the federation and first in South East.“The least indebted in the Southeast is Ebonyi. However, in terms of per capita debt burden, Imo is the highest while Anambra is the Lowest. For external debts, Enugu comes tops with a debt burden of USD120.7m and a per capita burden of USD22.
“The least indebted in the Southeast is Ebonyi. However, in terms of per capita debt burden, Imo is the highest while Anambra is the lowest
For external debts, Enugu comes tops with a debt burden of USD120.7m and a per capita burden of USD22.
“Imo state residents are the least indebted to foreign interests with a per capita external debt burden of USD12.
“Overall, the Southeast states are among the most indebted of all the states in the country.
“Two states, are among the top ten most indebted while all the five states fall within the first seventeen states.
“Anambra state generates the highest IGR in the region within the period under review.
“The IGR figures of all the states have also been very steady in a progressive pattern except for Ebonyi state which has been recording a steady decline since 2021.
“Surprisingly, Imo state recorded the least IGR in the region from 2019 to 2021. Even in 2022, the state was only able to out-perform Ebonyi.
