The Nigerian Senate has once again cautioned state governments across the country against obtaining reckless foreign loans, threatening that it will not give blanket approval to applications for such loans. Senate Committee on Local and Foreign Debts, gave the admonition on Monday, when some states appeared before it to defend their applications for loans against the 2013 fiscal year.
Some of the states that came before the Senate committee on Monday, to seek approval for foreign loans to execute various projects embarked upon in the respective states include: Anambra, Delta, Ondo and Niger states. Also, five states, including Adamawa, Ogun, Plateau, Abia and Imo, had appeared before the committee last week where they, along with the Federal Government, defended their request for foreign loans totalling $3.039 biilion.
Objecting to the frequency at which most of the state governments resorted to foreign loans, Senator Gbenga Obadara from Ogun State, charged that they should not mortgage the future of the country through reckless loans. “There is no need for any state to over-borrow. Ten-year grace to repay most of these loans may seem far away, but it is just like 10 days… We should be thinking of who will pay back the loans. This was how the country was led into a serious and great indebtedness to the London and Paris Club.
“The 10 per cent interest on the loans today will lead to greater indebtedness later. We are just coming out of a major debt settlement… I will not like my children to be in perpetual indebtedness due to the recklessness of some of those who are presently in government… It is true that some of these states are embarking upon laudable projects, but we should learn to cut our coat according to our clothes,” he said.