…says borrowing for development should be consistent with Open Governance Partnership
Frank Nweke Jr has reacted to the approval of the N170 Billion loan by the Enugu State government, decrying the increase of the state’s debt profile by almost 100% and charging the administration to adopt the provisions of the Fiscal Responsibility Act.
Nweke, who shared a statement with the press on Tuesday, October 10, stated that while he supported borrowing for development purposes, it should be consistent with the Open Governance Partnership requirements for transparency and accountability, per the provisions of the Debt Management Office for fiscal responsibility, and with the citizens apprised of the purposes of these facilities.
He revealed that the N170 Billion liability would take the State above the borrowing limit stipulated by the Debt Management Office by 226% and place Enugu State as the 4th most indebted State in the country.
Noting that the government and financial institutions would act in breach of the approved limit if these facilities were drawn, Nweke cautioned against circumventing the Fiscal Responsibility Act and the guidelines of the Debt Management Office as it would not be in the interest of the economy.
He also expressed concerns about the speedy approval of the loan request by the Enugu State House of Assembly, noting that a loan of that magnitude required rigorous analysis and clearly outlined projects with a cost-benefit analysis detailing the economic and social benefits.
He indicated displeasure at the government’s plan to include the Local Government funds in the repayment plan for the loans, saying that it is an encroachment on the fiscal autonomy of the Local Government. He opined that the sustainability of the debts and the proposed repayment plans are questionable considering the current revenue and liabilities of the state.
In conclusion, Nweke charged the ENSG to shun opacity and embrace transparency in the management of the state’s accounts. He reiterated the need for the government to publish the state of accounts, including the details of the N58 Billion supplementary budget which was approved by the current administration in September, stating that no clear plan has been communicated for which the borrowings are being effected.
“Enugu State faces the heightened risk of economic meltdown if fiscal responsibility, transparency, and accountability are not prioritised. As a citizen of this state, I demand that the government respond to these concerns and reevaluate the management of the State’s accounts”, he stated.
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