In a statement today, Senator Shehu alleged that the loans were usually for the purpose of providing infrastructure or to create investment opportunities but that the governors, whom he did not identify, usually ended up not utilizing the loans for the purpose.
Senator Shehu claimed that most of the foreign and domestic loans collected by the states were spent on personal luxuries or wasted in maintaining local political empire.
This is even as he opposed to the plans by the northern governors to obtain huge loans from the Saudi Arabia-based Islamic Development Bank, stressing that the money might be diverted for personal use as usual.
“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 cognizance 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.”
The lawmaker observed that states in the country could end up failing, if measures are not taken to curb their incessant borrowing. [myad]
