Edo State: Stop the Loans!

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by Isaac Botti

Governor Adams Oshiomhole places debts on Edo working peopleA major reason why several states have not been able to pay salaries is the high level of their indebtedness (up to N660bn). But some of the state governments, particularly Edo state, have refused to learn from this. Recently an approval was granted to the state government to accumulate a further $75m!

This is the same state that was declared to be on the brink of insolvency as a result of its debts in 2013, by the Debts Management Office. In 2012, the World Bank approved a loan of $225million for Edo State to support its Development Policy programme which is to be implemented in three tranches. The first tranche of the loan was given in 2012 under 2012/2014 Federal government borrowing plan but did not translate into a better life for the working people of the state. Now the state has gotten approval for the second tranche of the loan.

It is important to note that Edo state is one of the most indebted states with a whooping sum of N48,190,150, 127.26 in domestic debt as of December 2013. While its external debt increased by over 200%, from $44.2million in December 2013 to $123.1million in December 2014. These debts now limit the income of the state as their service payments are deducted directly from funds in the federation accounts meant for the state.

This accounts for why the state could not meet some of it obligation such as payment of workers’ salaries which has resulted in the wave of strikes actions that spread across the state in the last one year; workers in most ministries including teachers, Judiciary workers, local government workers and the ‘YES’ workers who were employed under the Edo State Development Policy Programme supported by the loans from the World Bank were owed by the state for several months.

We should recall that the state owes workers in several ministries and parastatals backlogs of salaries, up to 12 months in some instances, while the YES workers employed under the Youth Employment Scheme were sacked ostensibly for lack of money to pay them. All these express the dire financial situation and the hopelessness of the state in fulfilling its responsibility to the working people of the state.

The state claimed in the letter sent to the Senate to request the approval for the $75million loan, that the first tranche of the $225million loan from the World Bank was judiciously utilized for development purposes which include infrastructure, employment generation and increased revenue generation etc. However, there have been flaks concerning the cost at which these achievements have been procured.

It has been noted for instance, that road infrastructure in Edo state cost far more to construct than in other states of country, insinuating either poor contract negotiation, a weak procurement system or outright corruption. It has also been noted that in the course of driving the infrastructural development of the state, the governor has weakened other government agencies with statutory responsibilities.

For instance, the state Ministry of Works which is responsible for the construction and maintenance of roads has been neglected in favour of the Rapid Response Agency, an ad hoc road maintenance agency set up by the governor. Similarly, the role of the Ministry in the supervision and certification of public works contracts has been taken over by government appointed private consultants.

All these call for concern as it appears that the state procurement policy lacks transparency and due process. We thus demand an immediate halt to further debts being accumulated by the state. A detailed report of how the first tranche of the loan was expended should be published and circulated for the people to access.

We ultimately call on the working people of Edo state to resist further attempts by the government to mortgage their future through its “borrow and loot mechanism”, while the workers are subjected to hunger and deprivation. In solidarity we must break the haughty power of our oppressors and win our freedom.

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