A Review of the Nigerian Energy Industry

NGOs raise alarm over rising debt profile of Rivers State

Governor Rotimi Amaechi of Rivers State

Mkpoikana Udoma 1 September 2014, Sweetcrude, Port Harcourt – A coalition of organisations interested in transparency and accountability in the Niger Delta region, the Niger Delta Citizens and Budget Platform, has raised alarm over the rising debt profile of Rivers State.

Coordinator of the coalition, Mr. Ken Henshaw in an interview with SweetCrudeReports said, if the Rivers State Government goes ahead to secure the recently approved N52billion loan, the external debt profile of Rivers State will increase from $322million to near $600million.

The Budget Analyst warned that the huge debt profile of Rivers State pose a great dangers to the economy of the state, the future of the state and the dwindling internal revenue generation of the state.

According to him, “From the figures of 2013, the external debt ratio of Rivers State is at $322million, which means that Rivers State is the second indebted state in Nigeria after Lagos State. And then we have not added the N52billion bond that is coming in, which may put Rivers State in the position where it will be contesting debt portfolio with Lagos State, which is where Rivers State is heading to.”
“And of course, the Governor clearly said that we have ‘dwindling economic fortune’, which means the fortunes of the state are going down economically. We are not getting as much money as we use to get before, but we are spending as we use to spend before, which doesn’t work that way”

The Coordinator of the Niger Delta Citizens and Budget Platform, Mr. Ken Henshaw also said there is no moral justifications for the Rivers State Government to go ahead to secure a new loan with less than 9months in office.
“It is funny to say that the loan is not a new loan, because the loan is a new loan. At the instance you approached the creditor and take a loan, of course it becomes a new loan. In all fairness to the government, is it morally right for such debt burden to be incurred at this point in time? Of course it is morally wrong because it is not the right cause of action to be taken at this point in time”

Mr. Ken Henshaw the Financial Analyst, also warned that the Chibuike Rotimi Ameachi administration will leave behind a huge debt profile for Rivers people and a huge number of uncompleted projects.

“I sincerely feared that at the time this government leaves, some projects will not be completed; I fear there will be rollback in some of the reforms that have already taken place, because certain things have not been clearly defined. For example, the policy on education has not been clearly defined; the funding structure and the maintenance structure for the state have not been clearly defined. But above all these, I fear that this government will bequeath a debt burden to the incoming administration which will be very difficult for that administration to repay, which may in the long run, hamper the infrastructural development of Rivers State” he said.

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