Posted by The Niger Delta-focused CSO Policy Alert has criticized Akwa Ibom State’s decision to pay back N104.66 billion in interest on loans acquired from commercial banks over the course of the last eight years.
According to the group, the N104.66bn paid by Akwa Ibom State to commercial banks between 2015 and 2022 is within N600 million of Abia State’s maximum yearly revenue (2022) over the last eight years under consideration.
Following the 8th annual Open Budget Forum (OBF) for Akwa Ibom State, which took place on Tuesday in Uyo, a statement was released on Friday by the organization’s Programme Officer, Fiscal and Governance Reforms, Faith Paulinus.
According to the organization, the interests paid by Akwa Ibom State between 2015 and 2022 look like this after a review of the state’s financial statements: 2015 = N4.46 trillion, 2016 = N12.84 trillion, 2017 = N14.3 trillion, 2018 = N12.4 trillion, 2019 = N12.2 trillion, 2020 = N10 trillion, 2021 = N15.51 trillion, and 2022 = N22.95 trillion.
According to the statement, over the past eight years, the interest rate on each loan received by the Akwa Ibom State government has been kept secret, and the total amount paid has raised red flags about the legitimacy of the transactions involved.
The group maintained that the government should be transparent about the terms of the loan it had secured from commercial banks because Akwa Ibom State was paying a higher interest rate than Delta and Rivers States, both of which had greater debt loads.
What’s more concerning in the interest paid on the loans obtained during this period, according to the statement, is the origin from where these loans were obtained.
About half (28) of the 57 loans taken during the study period originated at Zenith Bank. In addition, 13 of the State’s 18 outstanding loans are held by Zenith Bank.
“During his time as governor, Mr. Udom Emmanuel also held the position of Executive Director at Zenith Bank, a financial institution that has provided the state with questionable loans at high interest rates.
As the author puts it, “this is a red flag and gives citizens more reason for suspicion on the deals that may have led to the high interest paid by Akwa Ibom State for its commercial bank loans.”
The group demanded that the state of Akwa Ibom and the accountability institutions look into the interest payment transactions and get their hands on the money.