Findings have revealed that the state governments across the federation are owing commercial banks the sum of N2.2tn.
According to data from the Central Bank of Nigeria’s quarterly statistical bulletin obtained by PUNCH, states and LGAs owing banks a total of roughly N2.21 trillion as of March 2023.
The aforementioned represents a significant rise of approximately N240bn during the period being analysed.
State chapters of the National Union of Pensioners and the National Union of Local Government Employees asserted that the bank’s loans did not result in improved infrastructure or worker and pensioner welfare.
In response, Chairman of the Association of Senior Civil Servants of Nigeria’s Enugu State Chapter,Mr. Igbokwe Chukwuma, claimed that such borrowing had not improved workers’ welfare.
He said, “That comes as a surprise to me. I can say that there is no evidence that such funds were used to pay the arrears of workers. States like Abia, Plateau, Benue, etc are still in arrears of salaries ranging from three to nine months.
“Except the states are still at the preparations stage to use such funds to pay salary arrears but we are not aware of any arrangement or pronouncements to that effect.”
Also the Head of Information of the National Union of Pensioners, Bunmi Ogunkolade, lambasted the governors saying the loans had yet to translate to a better life for residents, workers, and pensioners.
Ogunkolade said, “Can anyone of them come out plain to let us know the liabilities they met and the ones they offset? . There are some states that have been doing well, we have released their lists in the past, as well as those of states that are not doing well like the immediate past governors of Benue and Abia. Most of these states have not paid pension gratuities since 2010. So if someone is borrowing and is not disclosing what it is for, then that is daylight robbery. They often claim they are funding infrastructures.
“The N30,000 minimum wage that has been approved for over six years; yet only about 18 states are paying that rate. Some states have not even deliberated on this and they are going about borrowing money. These facts need to be exposed. Let the CBN always notify the public whenever these states borrow. Let everyone know. We can’t continue like this, we can’t continue to complain while the same thing continues to happen.
“On our own as NUP, we will continue to use every opportunity to talk about these issues. We will address a press conference and talk about these issues.”
The National President, NULGE, Hakeem Ambali said, “ It is evident that local government have not benefited from these loans.”
Also, the immediate past Chairman, NULGE, Anambra State chapter, Mr Cyril Okosa, said, “Unfortunately, the borrowing has not benefitted or translated to the welfare of Anambra workers. Workers have raised a lot of concerns as regards their take-home pay and working conditions, but their concerns have not been addressed while government appointees live in opulence, driving big cars with massive convoys.
“The worst-hit are the local government workers who don’t feel the impact of any welfare package from the government at all levels. Their monthly take-home pays can’t take them home anymore as inflation keeps rising.
“It is very unfortunate that the state governments have continued to borrow to service their personal lifestyle instead of spending it on infrastructure. Can anyone point at any tangible infrastructure they have used it for in the last two years?”
A economist, Paul Alaje, emphasised the necessity of conducting thorough investigations into the loans acquired by state governments and the subsequent allocation of funds by governors towards various projects.
He said, “Debts are like a burden, especially when the money collected is not spent on capital expenditure or projects that can create revenue for the government in the future. Most of the governors-elect have a lot of challenges because more than two-thirds of the states take allocations from Abuja and can barely pay salaries. As the value of the naira falls, it becomes worse for state governments, especially those whose predecessors have borrowed money on their behalf.”
