New Loans Will Not Benefit Taraba, Says Petitioner

Ismail Abdulaziz
Aug, Tue, 2023

General News

New loans will not benefit Taraba, says petitioner

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By Wandoo Sombo

Mr Abdullahi Usman of Taraba, has petitioned the Acting Governor, Central Bank of Nigeria, (CBN) Mr Folashodun Shonubi over alleged plans by Gov. Agbu Kefas to access a N206 billion loan facility.

Usman alleged that the governor planned on getting the loan from commercial banks in violation of laws guiding the process of loan application by the various tiers of government.

He urged the acting CBN governor to, as a matter urgency, instruct the affected commercial banks to suspend any consideration of granting the requested loan.

“If the CBN governor does not urgently wade into this matter, the state will be thrown into a perpetual state of abject poverty.

“The state will also be saddled with an excruciating debt burden and an inability to meet its financial obligations, which will impact negatively on the capacity of the state to remain a viable entity,’’ he said.

In addition to the suspension of the loan request, the petitioner also prayed the CBN governor to instruct the affected banks to present copies of relevant approvals from all agencies.

“They should also present limitation of use of commercial bank loans to fund capital expenditures and state budgets and finally, restriction of all loan facilities to Taraba until after the final determination of the ongoing gubernatorial litigation by the Supreme Court,’’ he said.

The petitioner, through his counsel said that the petition became necessary in order to draw the attention of the CBN governor to the planned contravention of the law.

He said the petition was also necessary to enable the CBN to take proactive steps and investigate the matter with the aim of discouraging the affected banks from getting involved in the process.

Copied in the petition were President Bola Tinubu, the President of the Senate, the Speaker of the House of Representatives and the Ministry of Finance.

Others are the Ministry of Justice, Nigeria Financial Intelligence Unit (NFIU) and the Chairman of the Economic and Financial Crimes Commission, (EFCC), amongst others.

According to Usman, the loan facility requested by the Taraba government from some commercial banks is hasty, ill-conceived and a wasteful venture that is politically motivated.

“This is to consolidate the power of an embattled governor and an attempt to put Taraba in a state of perpetual servitude of paying debts beyond its means and penury.

“All this under the guise of embarking on purported developmental activities,’’ the petitioner said.

The petitioner said that the Taraba House of Assembly’s prompt approval of the governor’s letter read on the floor of the house by the speaker with regards to the loan was hasty and ill-advised.

He said that one of the grounds on which he was challenging the proposed loan was that the process was shabby and had a defective risk assessment for the loan facilities.

He further argued that the loan was unrealistic and had an unsustainable repayment plan just as it had political inducement and motives.

“ Taraba is one of the poorest states in Nigeria, and is already overburdened with humungous debts and repayment of various facilities.

`How then can any commercial bank in Nigeria resort to inaccurate, unsustainable and unrealistic cash flow projections to avail Taraba any loan facility at the moment?

“All the cash flow projections for Taraba cannot adequately accommodate the repayment plan of a loan of N206 billion for a tenure of four years at 23 per cent interest rate,’’ he said.

The petitioner expressed concerns that the governor was currently defending his election at Taraba Governorship Election Petition Tribunal which had yet to deliver judgment.

“The loan amount from Taraba government can easily be diverted to other projects unconnected with what the loan is meant for.

“Since the position of the current government is shaky and may be set aside by the court, what will happen to the repayment of the huge loans granted to Taraba ?”

He decried what he described as the incessant attitude of commercial banks giving loans to state governments without following due process.

“In fact, it now appears that this form of armchair banking is what has been adapted by many commercial banks in going after states with meager and unsustainable cash flow.

“It is an easy way of making huge profits at the detriment of the state governments and their poor citizens.

“It is also to the detriment of the Federal Government and all Nigerians, who will bear the burden of bailing out failed states, when they cannot meet their financial obligations to the commercial banks.”

The petitioner also said that he had instructed his counsel to take necessary steps required by law, including instituting legal action, to restrain the affected banks from granting the loan to Taraba.(NAN)

Edited by Ismail Abdulaziz

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