hanging on the neck of Imo citizens for the next 20 years, if a new
N20b (Twenty billion naira) loan on top of the bail out fund being
sought by the State Government gets a final approval, and it seems it
is going to.
Governor Rochas Okorocha has received a federal nod to borrow the said
amount, which has a monthly repayment of N402,957,780.91, to finance
old projects and develop new ones.
Imo State is currently indebted to the tune of N60b (Sixty Billion
naira), comprising N34b (Thirty four billion naira) and N26b (Twenty
six billion naira), as revealed in the Federal Government bailout
programme, which is repayable in 20 years.
A 'No Objection,' letter addressed to Governor Owelle Rochas Okorocha
by the Federal Ministry of Finance said the N20b being sought would be
repaid in seven years and subject to the state meeting other
requirements of the Investment and Securities Act 2007. (Read full
text on Page 3)
If this new loan sails through, the implication is that Imo State will
repay N80 billion in 20 years, about N334 million per month, plus nine
per cent interest.
This will be the case if the loan is spread out but the commitment the
Government is about to make on the new N20b is to pay approximately
N403 million monthly for the next seven years, which is, of course,
beyond the lifespan of the present administration.
"The new move by Imo to borrow N20b from the capital market by way of
84 months bond is the height of financial rascality and determined
intention to further mortgage Imo children unborn in the next 20
years. With monthly repayment of N402,957,780,91 as shown in the
letter from the Federal Ministry of Finance, it means Imo will be
using a total of this amount to service this particular debt monthly,"
said a financial analyst who wants anonymity.
While giving 'no objection' to the loan request, the letter from the
ministry of finance called for financial prudence and drew the
attention of the Imo-Government to the economic difficulties facing
the nation.
"I would like to use this opportunity to draw the attention of Your
Excellency to the fact that based on the fall in oil prices and the
consequent decline of revenues for governments at all levels in the
country, there is an urgent need to exercise greater restraint with
respect to borrowing to avoid future debt unsustainability.
-NigeriaBulletin
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