Ini Billie, Uyo
Policy Alert, a Civil Society Organisation that promotes fiscal and ecological justice in the Niger Delta region, has urged the Akwa Ibom State Government to show proof of its transparency in the breach of contracts and interest on commercial banks loans.
The Non-Governmental Organisation which said the Akwa Ibom Government breached the State Public Procurement Law by taking loans for contractors, also described it as unacceptable that the government paid N104.66 billion as interest on loans taken from commercial banks in the last eight years.
Policy Alert stated that the analysis of the financial statements of the State showed that after the Public Procurement Law of Akwa Ibom State came into force in July 2020, the government continued to obtain loans for contractors illegally.
According to a press statement signed by its Programme Officer, Fiscal and Governance Reforms, Faith Paulinus, after the organisation’s 8th annual Open Budget Forum (OBF) for Akwa Ibom State held on Thursday in Uyo, Policy Alert revealed that the loans taken for contractors was in violation of the Akwa Ibom State procurement law Part IV, Section 16 and Subsection 7(ii) which stipulates that, “All procuring entities shall possess the required financial capacity to carry out procurements contracts”.
The statement mentioned Hensek Integrated Services and MIMSHAC- MERKAVIM Transportation Technologies Limited as contractors the government took loans for in breach of the law.
It explained that in 2022, the State Government took a loan of N8.59 billion in the name of Hensek Integrated Services and N4.7 billion in the name of MIMSHAC- MERKAVIM Transportation Technologies Limited, a private firm handling the car assembling plant.
“We must note that this is not the first time a loan was taken for Hensek Integrated Services. In 2019, N5bn was taken in his name. As of December 2022, the outstanding debt the State owes Zenith Bank in the name of Hensek Integrated Services is N8.2bn.”
It further revealed that between 2015 and 2022, the government took loans for both indigenous and foreign contractors, one of them, VKS Group, where a loan of N20 billion was taken from Zenith Bank for the company in 2019 for their contract at the Airport Terminal Building, 21-storey building and coconut factory.
It also identified that a N18billion loan was taken for Wizchino both at Zenith Bank and UBA for the Ndon Eyo road construction project in 2016 and 2019, including N7 billion loan taken from Zenith Bank to CCECC for Eket-Etinan road in 2016 and 2019, and N10 billion from Zenith Bank to Julius Berger in 2019.
Policy Alert alleged that most of the loans did not get the approval of the House of Assembly as they were not deliberated at plenary, as such stands as an insult to the powers of the legislature and a breach of the law, and called on accountability institutions to take actions against the illegality.
Similarly, on the payment of N104.66 billion interest on commercial bank loans taken in the last eight years, Policy Alert said it was only N600 million short of the highest annual revenue (2022), neighbouring Abia State had in the last eight years under review.
The organisation said the analysis of the financial statements of Akwa Ibom State between 2015 and 2022 showed that the interests paid as follows: 2015- N4.46bn, 2016-N12.84bn, 2017-N14.3bn, 2018-N12.4bn, 2019-N12.2bn, 2020-N10bn, 2021-N15.51, 2022- N22.95bn.
It noted that in the last eight years, the interest rate per loan obtained by the state government has been shrouded in secrecy, saying the amount paid revealed a red flag in the deals.
It called for investigations on the deals for the interests paid and recovery of the funds, insisting that the government must come clean on its deals per loan obtained for allegedly paying a higher commercial bank loan interest than Delta and Rivers State, whose debt burden is higher than Akwa Ibom State.
“What is more worrisome in the interest paid on the loans obtained within this period is the source which these loans came from.
“Of the 57 loans taken within the period under review, 28 which is about half of the loans came from Zenith Bank. And among the 18 outstanding loans the state has yet to clear, 13 are from Zenith Bank.
“It is a known fact that Mr. Udom Emmanuel who served the State as Governor during this period, had served as Executive Director of Zenith Bank, a bank that has strangely been magnanimous in giving the State loans and with resultant controversial interests paid.
“This is a red flag and it 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 statement noted.