The Peoples Democratic Party (PDP) has warned on the dire consequences of the huge debts into which the Action Congress of Nigeria (ACN) is plunging southwestern states under its control.
It also implored the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC) and other financial clearing houses to do all in their powers to check the “alarming” rate at which the states are obtaining loans.
PDP’s National Vice Chairman (South West), Chief Segun Oni, who spoke on behalf of the party, warned that the ACN-controlled states would go bankrupt should they continue with the “regime of taking loans and bonds and giving promissory notes on multi billion naira contracts to execute questionable projects like building new government houses.
“It is worrisome that less than two years after ACN took over Osun and Ekiti states, the two are now indebted to the tune of over N150bn, with Ogun State on the verge of taking N100bn bond,” Oni lamented in n a release signed by his media aide, Mr Lere Olayinka.
“Osun State alone is owing over N120bn, Ekiti is owing over N30bn and is rumoured to be planning to take another N30bn, while Lagos State government was said to have, as at 3oth June 2012, accumulated an external debt profile of $517,677,672 (more than half a billion dollars), despite having a monthly revenue of about N23 billion.
“We wish to alert all well-meaning Yoruba sons and daughters on the dangerous trend of obtaining frivolous loans by the ACN governors in the South West, and call on the CBN and other financial regulatory agencies to put a stop it.
Continuing, Oni said, “As at today, Osun State has taken N60bn bond, N25bn loan from First Bank, N17.8bn from Infrastructure Bank (to construct Oshogbo-Kwara Boundary Road), N17.5bn road project (six inter-township roads) to RATCON on contractor financing and another N7.6bn Ilesha and Oshogbo township roads to RATCON on contractor financing. Contractor financing means you are borrowing from your contractor at a cost higher than even bank term loans.
“In Oyo State, a 4km road project around Challenge area in Ibadan was awarded for N5.7bn to Hitech Construction Company, owned by ACN leader, Bola Tinubu, on contractor-financing basis while the same practice is going on in Ogun State. One begins to wonder where the states’ incomes (federal allocation and internally generated revenue) are spent on.
“All these projects being financed by the contractors are bank-guaranteed by the ACN State governments with promissory notes with a tenor beyond their legal tenures, and the implication is that the states are owing. It beats one’s imagination that a government will embark on projects it has no capacity to fund.”
Oni, therefore, called on “well-meaning Yoruba people to intervene in the affairs of the region by preventing these ACN governors from mortgaging the future of our children through frivolous loans, because most of the loans being obtained now cannot be paid back in the next
50 years.”