Approval Of N39.4bn World Bank Loan For Lagos State Unwarranted-CACOL



The Coalition Against Corrupt Leaders, CACOL has described the World Bank N39.4bn loan approval for Lagos state as unwarranted.

This came on the heels of the recent release that the Board of Executive Directors of the World Bank has approved $200m (about N39.4bn) credit to Lagos State to support a range of reforms relating to fiscal sustainability, budget planning, budget execution and the investment climate in the state.

According to a statement issued by the World Bank, the facility is to help sustain the state’s recent economic growth and poverty reduction, while helping to continue to deliver social services to the expanding population.

Reacting to this on behalf of the Coalition, its Executive Chairman, Comrade Debo Adeniran expressed his total disagreement on the loan approval based on the reasons advanced by the World Bank as basis for the approval.

“The World Bank, unlike the contemporary commercial banks, essentially, neither out to make profit, nor to just satisfy its obligations as bankers, but basically has, as the centerpiece of its prerogatives, to ensure that in giving financial support to the needy government and states, the interest of the generality of the people should be paramount. Since governance itself is all about the people, the World Bank, as the citadel of financial back-up as well as the economic bedrock of the whole world, it is thus so expected that criteria for loan consideration should go beyond just the ability of such loan applicant to repay but more of what the loan is to be utilized for and of course, the record of performance of the applicant as regards its sincerity in strictly applying the fund for the original purpose.

“ far has Lagos State government gone to provide the needed social services to the people that would justify the unending borrowing? On poverty reduction, building of developmental projects, what is the positive impact of their programmes on the lives of the average citizen of Lagos State?

“In the area of infrastructure, it is an open fact that the unmotorable roads are more in number than the motorable ones. Even most of the roads that could be regarded as motorable have become a big hype of traffic jams on daily basis just because the flyovers, pedestrian bridges are lacking. All the measures that could make way for free traffic are not available and these are to be provided by the state.  Public transportation is still in short supply.

On housing, how many civil servants could boast of having houses of their own even after having put in decades of services to the state. Even where some are provided, the price tag is too high and beyond the reach of the average civil servant.

When we talk of providing social amenities, we know that health institutions have been under-provided and it is not able to meet half the need of the people. On portable water, except for individual landlords, having to rely on making boreholes for occupiers of houses; the government has rendered that virtually to the background as over 80 percent of its citizens have no access to portable drinking water; they do not even talk about it anymore as if it does not fall within its priority. One would not be asking for too much for a state government like Lagos’s, with an annual average IGR of over N400bn, to have in place social security schemes like the National Insurance Scheme for its citizens or civil servants, to take care of the un-foreseen?

’The Debt Management Office DMO’s external debt figures (without adding domestic debts) show Lagos as Nigeria’s most indebted state with $1.17 billion debt. The Coalition queries the justification for additional loans approved by the World Bank and we challenge the state to justify how appropriately previous loans had been utilized and its impact on Lagosians. We also challenge the state to come out and defend its present state of insolvency.

“The state is owing so much and it could get to a point that no matter how much they earn i.e from their Internally Generated Revenue IGR, it may not be able to meet up with the repayment schedule and by the time a sizeable percentage of the earnings go to servicing loans, little would be left to address the core issues of governance which of course should be pro-people in every way.”

”Looking at it from the angle of what happened at the Federal level which depended so much on oil, the fall in oil price almost collapsed the country’s economy. A similar thing could happen to any state that depends so much on its IGR. There could be a sharp drop in the IGR and that may lead to such government’s inability to meet its obligations especially in the area of debt servicing. We want to express the fear that, should the trend continue, it might get to a point whereby the greater bulk of earnings would go into loan servicing thus leaving so little for developing both the people and the state itself.

“It must be realized that when loans are obtained, the servicing of then repayment generally is done from this same common-wealth which is said to belong to the people now the people are not enjoying from the borrowing but they are to bear the pains of repayment. Today the state is groaning under the burden of the existing loan. An addition loan means additional pains and suffering.

Speaking further, Adeniran said “it must be realized that when such loans are given, the borrower premises it reasons for borrowing on its constitutional responsibility for making life better for the people. Therefore, consideration for gratifying such loans should as well be premised on its end implication on the same people.

The World Bank should begin to look beyond the ability of the borrowers to pay back but the general implication of such deals on the lives of people; this is what informs the sharp difference between its corporate status and that of the other commercial banks.

SOURCE: News Dairy.

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