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Gombe State Bleeds Over N44bn Debt In Two Years, As Governor Seeks More Loan

A political pressure group, Gombe Good Leadership Association duly registered by the Corporate Affairs Commission, has pleaded with the governor of the state, Inuwa Muhammed Yahaya, to put an end to his borrowing spree and stop mortgaging the future of the state.
In a statement signed by one of its trustees, Mohammed Salisu Abdullahi, the group stated that the administration has borrowed well over N44Billion in just a little over two years and yet it is embarking on obtaining another loan of N35B from the Capital Market.
It added that the Gombe State Executive Council had on 6th October 2021 allegedly  given its approval for the loan and directed the Commissioner of Finance and Economic Planning “to write to the Honourable Minister of Finance to issue an ISPO of N665,605,647.90 monthly to allow deductions from State FAAC allocation in settlement of Principal and Interest accruing on the Suku through a sinking fund to be created for the purpose and the payment of the Financial Advisory.
Service Fees of 0.005% of the sum of N175,000,000.00  to Finmal Finance Services Ltd”(A company allegedly owned by a close associate of the state government.
The statement reads in parts: “What is particularly concerning to us is that these excessive borrowings that come with a crushing socioeconomic burden and impact on the state are not stimulated or urged
 by the urgent and realistic needs of  the state.
“This irresponsible borrowing enthusiasm,  if not checked or curbed, will end up crippling the state and subject its people to a long term of heinous and infernal economic slavery. The overarching condition for the justification of a State Government to borrow is the ability of the proposed project to be self-sustaining, able to repay the loan and above all is integral and vital to the State’s Fiscal and Development framework. State debts should not be acquired at the whims and pleasure of State executives but for the sole purpose of fast-tracking development at a comparatively reasonable cost.
“We call on the Governor of Gombe State to, within seven days of this publication, publish in at least one National daily newspaper and one other circulating within the state details of all the debts it has procured which details should include the amounts, the purpose for such debts and their link to the Development Agenda of the Government, Cost-Benefit Analysis showing the Economic and Social Benefits of such borrowings, cash flow Projection to ascertain the viability and sustainability of the purpose of borrowing, Audited Financial Statements for the past three consecutive years, The Appropriation Laws authorising the purposes for which the Borrowings were utilised, how much that has been repaid or the plan for the repayment, the ratio of the State’s debt profile against its total revenue, the State’s Internally Generated Revenue, investments of the State( if any, Evidence of attainment and maintenance of current Credit Rating, Debt Sustainability Analyses by the DMO, Evidence of  an  up  to  date  submitted  to  the  DMO  of  Quarterly
 Domestic Debt Data and Evidence of compliance with all the requirements of the Investment and Securities Act(ISA)
The Association also cautioned banks that have granted loans to the Gombe State Government or are in the processes of processing loans for the Gombe State Government or that are involved with the loans of the Gombe State Government in any manner whatsoever, on NOTICE that it shall institute legal processes to ensure that they face the full wrath of the law for any failure to comply with all regulatory requirements concerning such an involvement.”
“We also call on the following institutions and offices to pay attention to the borrowing appetite of the Government of Gombe State with a view that it complies with DMO Domestic guidelines for State Governments:
1. The Debt Management Office/Debt Management
2. the Vice-President of the Federal Republic of Nigeria
3. the Minister of Finance;
4. the Attorney-General of the Federation;
5. the Minister responsible for national planning;
6. the Chief Economic Adviser to the President;
7. the Governor of the Central Bank of Nigeria; and
8. the Accountant-General of the Federation;
“In the case of the DMO and the Minister of Finance, we state that it owes the people of Gombe State the abiding duty of ensuring that the Gombe State Government does not acquire any debt without complying with the letter and spirit of the Guidelines for such borrowing.
“We are worried that despite the borrowing of humongous sums and of course the earnings of the State from FAAC and IGR, the State is getting poorer by the day, its infrastructure, public institutions and departments are deteriorating at an accelerating rate.
” The rising profiles of the Education and Health sectors of the State under the previous Governments are dimming, and no aspect of the State can be said to have been positively impacted by this borrowing Government. Indeed, the State is falling apart and the present borrowing spree is indicative of the cluelessness of Gombe State Government. The Government has on paper been awarding contracts but we state boldly that the reality on the ground is not reflective of such contracts.”

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