APC, PDP Guber Aspirants Kick against Chime’s N11bn Loan Request

                                   Governor Sullivan Chime

The All Progressives Congress (APC) in Enugu State on Tuesday reaffirmed its opposition to the N11 billion loan requests by the state government a few months to the expiration of Governor Sullivan Chime’s tenure in office.The party therefore called on the people of the state to rise up against the “illegal” loan request, saying that they should start by withdrawing their patronage from the two commercial banks (names withheld) for allegedly serving as conduit pipe to drain the coffers of the state.

Also, a gubernatorial aspirant on the platform of the Peoples Democratic
Party (PDP) in the state, Chinedu Onu also kicked against the loan, describing it as “awkward” in view of the general knowledge that the Chime’s administration is not known for borrowing.

Onu in a press statement said it would be wrong for the in-coming administration to be saddled with any debt, noting that the haste with which the government was making the request would  plunge the state into a huge debt burden.

However, briefing newsmen, Chairman of the APC in the state, Dr. Ben Nwoye said the loan contravenes the Fiscal Responsibility Act as it was not taken for capital projects or the projects for which it was taken clearly spelt out.

“We cannot fold our hands and watch, while we know that we cannot stop (Governor) Sullivan Chime in what he wants to do, I’m begging the people of Enugu  state to stop banking with these two banks. These people, the institutions are conduits pipe within which the government of the Peoples Democratic Party is using to divest them of our future earnings, it’s not even the present day earning that they are involved in.

He said the governor submitted a memo to the state House of Assembly to approve N11 billion loan, in addition to the request that the House should approve retroactively another loan of N7 billion, which the state government had earlier borrowed bringing the total to N18 billion.

He said that out of the N11 billion, N1 billion was for servicing of earlier loan borrowed from one  of the banks.

Nwoye said that the state government knew that PDP has collapsed in the state and that APC will take over government in 2015, and that the ploy was for the outgoing government to take their last flight with pocket full of cash in order to put the state in huge deaths, which will be inherited, by APC government come 2015.

He said that the lawmakers that approved the illegal loan were already on recess that was to end on December 3rd, but had to hurriedly come back, and knowing that what they were about to do was unconscionable, had to chase the media away and sat in secret.

“The same thing that they did in the chicken impeachment is what they are repeating now. But again I hope it will be the last time. The loan was not taken in furtherance of 70 or 75 percent unemployment rate that he bequeathed in the past seven years administration; that loan is not being taken in furtherance of a better institution of our health care system, the loan is not taken in order to fortify our university system, IMT is still outdated institution,” he lamented.

He called on the anti-graft agencies to move into action and investigate the shady deal surrounding the loan and to possibly stop it.

On his part, Onu while acknowledging that the Chime administration had executed several people-oriented projects, said since government is a continuum, handing over the remaining uncompleted projects to the next administration was much better than to hand over a huge debt overhang with associated interest cost elements.

“Also a loan taken in a hurry by an administration that has few months to go will likely be poorly negotiated because government cannot negotiate from a point of strength.

“Another issue is that the current fall in oil prices calls for greater
caution. In a state like Enugu with low federal allocation, after taking care of the wage bill and administrative overheads, it will take not less than 18-20 months to repay a loan of such magnitude especially in the light of the admission of the government in the same report that it found it difficult to repay a previous loan of only N1 billion.

“I believe that the governor has not been properly advised about the true implications of such last-minute borrowing. At going commercial lending rate of above 17 per cent and other upfront charges added, a loan of N11 billion from a commercial bank will accumulate interest of over N2 billion in just one year.

“A sum that should be saved and properly applied to the needs of the people instead of serving to swell the profits of commercial bankers who act as shylocks,” he said.

source:ThisDay News