The last may not have been heard of the controversial N11bn loan approved for the Sullivan Chime-led administration in Enugu State by the state House of Assembly as a Peoples’ Democratic Party (PDP) gubernatorial aspirant in the state, Chinedu Onu has come out to kick against the loan.
Onu in a press statement issued on Tuesday described the loan as “awkward” in view of the general knowledge that the Chime’s administration is not known for borrowing, adding that it would be wrong for the incoming administration to be saddled with any debt.
He further raised eye brows with the haste with which the state government was making the request, noting that it would plunge the state into a huge debt burden.
The gubernatorial aspirant, who conceded that the Chime administration had executed several people-oriented projects, argued that since government is a continuum, bequeathing the remaining uncompleted projects to the incoming administration was much better than handing over a huge debt overhang with the concomitant interest cost elements.
Hear the PDP chieftain, “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 asserted.
It would be recalled that just yesterday, DAILY POST reported that the All Progressives Congress (APC) in Enugu State restated 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 Chairman of APC in the state, Dr. Ben Nwoye, while reaffirming the position of his party on the loan to newsmen in Enugu, opined that 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.
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