Recently, the Kogi state government made a public admission and disclosure that it has defaulted in paying its workers’ salaries due to huge loan servicing by the State. The State’s Director-General, Media and publicity stated in the report that “. . .the loans were taken by the two previous administrations for projects that did not add value to the state. Sometimes, we repay between N400m and N500m monthly as loans that add no value to the state. These loans were taken by the last two administrations and some of them were invested on projects that were never completed”.
This attempt to justify the failure of the state governments to fulfill its obligation to the workers in the state although obnoxious and objectionable however again buttresses the import of unsustainable loans and reckless borrowing by governments especially at the sub-national levels. State-level debts have become a considerable source of worry to well-meaning Nigerians. As it is well known today, many States in the Country are insolvent and barely surviving on monthly allocations from the Federal Account Allocation Committee.
But even with this renteership system currently in place, many states are still strained to meeting its fundamental obligation including payment of salaries to its workers even as many more are hugely indebted to local contractors on jobs and services executed, as they are neck-deep in protracted indebtedness over loans procured by both past and incumbent administrations. Countless innocent workers are known to have died as a result of the hardship imposed on them by this. Only recently, five college staff died in Abia State over owed Salaries. On the heels of this year’s Workers Day, Labour Unions also reeled out chilling figures of its members including pensioners that were either owed protracted salaries or have out rightly died as a result of same in States across the Federation. Worse off are infrastructural conditions including public service delivery in these States.
Only recently, the Senate rejected a loan request of $350 million by the Kaduna State government, this was rightly so. Kaduna along with Lagos and Edo States rank top three in the highly indebted States of the Country, jointly pulling a staggering figure of $1.8 billion in external debt profile alone. This is worrisome, for while the process of contracting these loans have been poor and non-transparent, its management have been worse. Administrations simply contrive and obtain huge loans that are neither subjected to any transparent or accountable use, nor oversight checks and at the end of its life tenure, simply pass the buck onto the incoming administration and transfer the burden (of repayment) on the people. This is undoubtedly the reason why, of the massive debt profile of governments at both Federal and State levels over the years and decades, little or no significant impact can be traced to them rather while innocent citizens are left with back-breaking debt burden.
While the action of the Senate in taking these citizens’ concerns into cognizance in rejecting the Kaduna State government loan request was in order, patriotic and masses-oriented, the National Assembly should in addition, place stringent measure to curb excessive state borrowings and reckless spending of specific purpose funds such as the bailout and Paris refund monies as well as other project-specific funds. Furthermore, it should institute an effective monitoring and oversight of loans and loan-designated projects. Agencies and bodies charged with public debt management such as the Fiscal Responsibility Commission, the DMO and the Ministry of Finance should be compelled to rise to their responsibilities of enforcing the various statutory provisions on transparent and accountable management of public debt in Nigeria to help bring about the impact of loan benefits in the lives of Nigerians.
Head, National Advocacy