‘It’ll take 50 years to repay $3.3bn debts owed by states’

The financial crisis facing states in the country and their level of indebtedness may be worse than many thought, as the states are said to be indebted to foreign creditors to the tune of $3,271,960,461.

This was disclosed on Saturday by the Chairman of the Senate Committee on Local and Foreign Debts, Senator Shehu Sani, who raised the alarm over the growing debt profile of state governments in Abuja.

According to Sani, most of the debts were loans collected to provide infrastructure or to create investment opportunities, adding that many of them might take up to 50 years to service. He however said that most of the foreign and domestic loans collected by the states were spent on personal luxuries or wasted in maintaining local political empire or even used to finance white elephant projects and unrealistic political campaign promises.

Read also: Northern govs’ plan for Saudi loan illegal, Senate cautions

The outspoken Senator further expressed fears that many states in the country could failed states if they with the rate with which they borrow if adequate plans are not put in place and there paucity of resources to service them.

Restating his earlier stand against the decision of Northern governors to borrow from Islamic Development Bank, Sani said the money, like others before it, may end up in private pockets.

“The Northern Governors had through their Chairman, the Borno State Governor, Kashim Shettima, reacted to my opposition to their move to secure loan from the Islamic Development Bank in Saudi Arabia.

“They insisted I am wrong and they are right. I wish to respond to them. The current foreign debt profile of Nigerian States stands at $3,271,960,461.03. Most of these debts were loans collected in the name of infrastructure or investment.

“There is no tangible infrastructure development in the North commensurate with amount of loans collected by the state governments in the last two decades.

“Most states are incapable of servicing their debt in the next 50 years. Taking cognisance of the current state of our economy, we have been plunged into a debt trap, which our grandchildren will not even be able to pay.

“There is no single export-based investment or industry in the North that is currently in operation towards generating and attracting $1m monthly of foreign exchange.”

RipplesNigeria …without borders, without fears

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now