Despite its debt burden, Enugu State Governor, Dr Peter Mbah is seeking the approval of the State House of Assembly to raise the sum of N170 billion in loans.
If granted, it will raise the total debt burden of the state to over N300 billion, Saharareporters can report.
In an order paper of the House of Assembly for Monday, October 9, 2023, which was obtained by SaharaReporters, the Assembly members were informed about a message from Governor Mbah, requesting approval for the loan facility.
According to the memo, a breakdown of the loan shows that Governor Mbah wants N100 billion in bank guarantees, an N10 billion term loan, another N10 billion overdraft, and an N50 billion credit facility.
Although the memo did not indicate the purpose of the loan, it is noteworthy that the credit facilities being demanded by Governor Mbah are N3.38 billion higher than the entire budget presented by former Governor Ifeanyi Ugwuanyi for the entire 2023 fiscal year.
This also comes four weeks after the House of Assembly approved the sum of N58 billion supplementary budget for the governor – on September 12, 2023.
Several reports on September 18, 2023, claimed that Governor Mbah was planning to raise the sum of N50 billion from the bond market.
It is also not clear if the N50 billion bonds were floated to finance the N58 billion supplementary budget already approved, or whether it is going to be used as part of the financing for the N170 billion fresh loans being sought.
The National Bureau of Statistics (NBS) data released in February 2023 ranked Enugu State as the 7th most indebted state in the federation with a total of $123.02 million (N167 billion) of external debts.
Meanwhile, some stakeholders in Enugu State are worried about the rising debt profile of the state, especially as there are no signs of development projects on the ground to justify all the monies received by the government since it came into office on May 29, 2023.
Apart from the N5 billion fuel subsidy palliative, which the government has yet to justify how it was spent, the state government has received more than N40 billion through federal allocations since June 2023.
But apart from announcements of projects it intends to embark upon, there has been nothing on the ground to indicate the projects to which the monies were allocated.
Governor Mbah has talked about increasing the state’s revenue from its current $4 billion (N3.8 trillion) to $30 billion (N28.5 trillion) in eight years.
In an interview published in This Day newspapers on September 4, 2023, Governor Mbah said the revenue growth was going to be anchored on growing the private sector.
“You would recall that we got the mandate of the Enugu people entrusted into our hands based on all the promises that we made. One of them was to grow the economy from $4 billion to $30 billion. And we also said to them that that growth will be driven by the private sector, it will be enabled by the government, but driven by the private sector.
“We were deliberate because we knew that for us to tackle unemployment and generate wealth, we needed private sector investments. It is not going to come from the public sector. And for the private sector to invest, they also need the government to do certain things,” the governor had said.
With a minimum total external debt of N300 billion, Enugu State appears to be too indebted to be attractive to any private sector investment.