Last week, Hon Declan Mbadiwe Emelumba, Imo State Commissioner for Information / Strategy announced that the government is seeking to borrow fresh N10bn Loan.
The commissioner who, spoke to newsmen at the end of the weekly State Executive Council, SEC, meeting at the Imo State Government House, Owerri, further clarified that the said Loan would be used in the construction of ongoing road projects in the state.
We have had cause on several occasions in the past to say that, borrowing by government or, organizations or, even individuals, is never a bad idea.
No society, government or organization is an island and self sufficient in all ramifications, so it is normal to solicit financial support or otherwise, when need arises.
So, on the surface so to say , borrowing is not bad. What concerned citizens, however, focus attention on when governments talk about borrowing are usually the reason(s) for opting for such policy and, whether the facility will be properly invested when obtained.
Nigerians always seem obsessed by the foregoing issues because as experience has shown governments seem to borrow for the mere sake of borrowing.
At other times, when such Loan plans seem tied to infrastructure and other viable economic projects, that, can in future help repay such loan, while at the same time fostering growth and development, they often end up in private pockets when accessed, thereby harming both the economic and the society.
This, in the perspective of many seems to be what is happening at the federal level in the past six years or so. As at June 30, 2020, Nigeria debt profile rose to an alarming N31.009 trillion ($85. 897b), but on ground, there is little or nothing to show that such humongous amount has entered the economy.
Imo people can also recall that ex-Governor, Owelle Rochas Anayo Okorocha during his time embarked on a borrowing spree which effect is not being felt today by the people.
When Loans are not properly utilized, it is the people that end up bearing the brunt, because willy nilly debts owed have to be paid back.
When Loan repayment is due governments, no matter the state of their finances are bound to fulfill them and in the process, may be forced to abandon other critical funding obligations which, ultimately impacts the economy and the citizens very negatively.
It is largely the numerous negative fallouts of Loan regimes in this part of the world, that makes
citizens dread it and prudent governments run away from it.
For us, Gov Uzodinma should have walked that path for some obvious reasons. Revenue receipts from Abuja have continued to drop in recent times and, what that implies is that, repaying Loans may soon become difficult for an economy gasping for breath.
Similarly, the state’s debt profile seems to be reaching unsustainable levels which if not addressed now may sound the death kneel on the economy in the near future.
Under these circumstances, we would have preferred it if in place of Loan the government has opted for strategies to cut cost of governance.
At both Federal and State levels, Imo inclusive governance has been fingered as gulping larger chunk of the revenues accruing to governments.
Consequently, there have been strident calls for cost cutting by governments and channeling such saved funds to critical infrastructure.
That is the path the Uzodinma adminstration should have toed. After that it should devised creative strategies to shore up the Internally Generated Revenur,IGR of the state.
With improved IGR and savings from high costing we believe government can to a large extent fulfill its obligations to the people.
In our considered opinion therefore, it is time to end seeming frivolous borrowings, while looking intently inward to see how Internally Generated funds can be properly utilized for good governance and for the good of the state.
