Why I’m against Ebonyi borrowing $150m loan, says Elechi

The immediate-past Governor of Ebonyi State, Chief Martin Elechi, has explained why he is not in support of the plan of the Ebonyi State Government to borrow $150 million from the Islamic and African Development Banks respectively for the construction of Abakaliki Ring road.

The road is meant to run across eight of the 13 local councils in the state.

Elechi, who spoke with newsmen in Abakaliki yesterday, said: “We have a law in Ebonyi State which I initiated in 2009 called the Fiscal Responsibility Law that guides on the handling of financial resources and this law spells out how the state should borrow and unless for any reason; this law is common to the 36 states of Nigeria. Apart from the federal laws, every one of the 36 states of the federation has its own Fiscal Responsibility Law. The terms may not be the same.

“Under our own law, when you borrow, what you borrow must not be more than 40 per cent of the monthly average of your previous two years. We are now in September 2017. If you go back to August 2015, if you add up government’s receipts from August 2015 till August 2017, and divide by 24, what you get is the monthly average. So, that law says that what you pay by way of debt refund must not be more than 40 per cent of the monthly average of the previous two years.

“This was why in 2010, I borrowed N20 billion for various projects. And in order to comply with that law, the loan came in two tranches of N16.5 billion and N3.5 billion respectively. We paid it as stipulated by law beginning from August 2010 to July 2015, which is a period of 60 months. I had paid for 58 months by the time I exited at the end of May 2015. So, the succeeding government had only two months to refund. And as you know, it is deducted at source, which means the deductions were for only for June and July 2015. So, we completed the refund of the bond by July 2015.

That is the procedure and I had expected somebody who had served as deputy governor to say that when he was there, this was part of the procedure.