Outrage as Enugu Govt draws down on N58 billion supplementary budget in one month, seeks fresh N170 billion loans

Contrary to claims that part of the N170 billion loan recently approved by the Enugu State House of Assembly was to help in financing the N58 billion supplementary budget recently approved by the state House of Assembly, investigations have revealed that the government of Governor Peter Mbah has already drawn down on the sum from the coffers of the state government.

The Enugu State Government has stirred controversy following the approval of the N170 billion loan facility by the state government, as stakeholders accused the governor of piling debts on the state even when there are no indications of any capital projected on the ground to justify the demand.

On September 12, 2023, the House of Assembly approved the N58 billion supplementary budget for the government, and while presenting the request for the loan facilities gave the impression that the money was to help in financing the supplementary budget.

But a member of the State Assembly has said that findings have indicated that the government has drawn down on the budget, which suggested non-disclosure of the purpose for which the loan facility was going to be put.

The loan approval, which was given expedited approval by the state assembly, will raise the state’s debt profile to more than N300 billion, a development that has alarmed the people of the state, who have been wondering how the government wants to finance the piling debts.

A report by Enugu Metro, an online publication based in Enugu, stated that the average receipts from the federation account to the state has averaged N6.7 billion monthly, meaning that were the government to use all her allocation receivable to pay for the loan, it would take more than 25 months to totally repay the debt.

This is even as most of the loans were said to be chargeable to the state’s internally generated revenue (IGR).

Although the IGR of the state is largely opaque, with little or no reporting, a report by Premium Times newspaper in June 2023 stated that the state generates only N31 billion per annum from internal revenue sources, which is more than five times the amount of the loan approval.

It therefore means that it would take no less than five years for the state to successfully service and repay the loan. This is however contrary to the advertised repayment plan for the loan, which was said to be 48 months (four years).

On Tuesday, the Enugu State chapter of the Labour Party issued a statement condemning the loan, describing bth the application and its approval as catastrophic.
In a statement signed by the Chairman of the party, Casmir Agbo, and Publicity Secretary, Onuora Odo, the party said; “We are by this media release expressing our shock and indignation over the borrowing disposition of Mbah-led administration. We are not of the view that the government should not borrow, we are simply alarmed and shocked at the clinical precision and catastrophic rapidity with which the borrowing occurs. More so when the loans are not channeled towards any infrastructural developments.

“You can observe that both the social and the mainstream media have been on fire since yesterday, the 9th day of October 2023 when the request made in writing to the leadership of the State Assembly hit the media space. The purpose of the loan was not stated but, we are strongly persuaded that the purpose is tailored towards self-enrichment and satisfaction of personal greed. Sadly, the level of infrastructural decay in Enugu is nothing to cheer about and the Governor is busy scooping monies from left, right, and center.”

On Wednesday, a human rights organization, the Human Rights Writers Association of Nigeria (HURIWA) also issued a statement condemning the loan request, describing it as deeply alarming.

“The approval process within the state Assembly was astonishingly rushed, devoid of the requisite due diligence and public discourse essential for decisions of such financial magnitude. This hastiness has left the people of Enugu State in the dark regarding the loan specifics and its intended benefits for the state. This lack of transparency and accountability undermines the principles of good governance.

“Responsible governance should prioritize the citizens’ welfare. Leaders must ensure that public funds are employed for the people’s benefit and that decisions of this magnitude are characterized by utmost transparency and accountability. Governor Peter Mbah and the Enugu State House of Assembly must be held accountable for their actions and decisions. The people of Enugu State deserve leaders who prioritize their welfare and are committed to responsibly managing public funds.”