SOS: Enugu Debt Profile Set To Soar As Gov. Peter Mbah Seeks House Of Assembly Approval For N170 Billion Loan.

Gov. Peter Mbah.

The Governor of Enugu State, Barr Peter Mbah has approached the Enugu State House of Assembly for approval to raise the sum of N170 billion in loans, a development that might raise the total debt burden of the state to more than N300 billion.

In an Order Paper of the House of Assembly for Monday, October 9, 2023, the assembly members were informed of a message from Governor Mbah, requesting that approval be given for the loan facility.

A breakdown of the loan, according to the memo, shows that Governor Mbah wants N100 billion in bank guarantees, a N10 billion term loan, another N10 billion overdraft, and a N50 billion credit facility.

Although the memo did not indicate the purpose for which the governor wants to put the loans, it is noteworthy that the credit facilities being demanded by Governor Mbah is N3.38 billion higher than the entire budget presented by former Governor Ifeanyi Ugwuanyi for the entire 2023 fiscal year.

The memo.

This is also happening exactly four weeks after the same House of Assembly approved the sum of N58 billion supplementary budget for the governor, on September 12, 2023.

On September 18, 2028, some online media reported plans by Governor Mbah to raise the sum of N50 billion from the bond market.

It is also not clear if the N50 billion bonds were floated to finance the N58 billion supplementary budget already approved, or whether it is going to be used as part of the financing for the N170 billion fresh loans being demanded.

Data released by the National Bureau of Statistics (NBS) in February 2023 placed Enugu State as the 7th most indebted state in the federation with a total of $123.02 million ( N167 billion) of external debts.

Stakeholders in Enugu State are worried about the rising debt profile of the state, even when there are no signs of development projects on the ground to justify all the monies received by the government since it came into office on May 29, 2023.

Apart from the N5 billion fuel subsidy palliative, which the government has yet to justify how it was spent, the Enugu State Government has received more than N40 billion through federal allocations since June 2023, but apart from announcements of projects it intends to embark upon, there has been nothing on the ground to indicate the projects to which the monies were allocated to.

Governor Peter Mbah has talked up increasing the state’s revenue from its current $4 billion (N3.8 trillion) to $30 billion (N28.5 trillion in eight years.

In an interview published in This Day newspapers on September 4, 2023, Governor Mbah had said the revenue growth was going to be anchored on growing the private sector.

“You would recall that we got the mandate of the Enugu people entrusted into our hands on the basis of all the promises that we made. One of them was to grow the economy from $4 billion to $30 billion. And we also said to them that that growth will be driven by private sector, it will be enabled by government, but driven by private sector. We were deliberate because we knew that in order for us to tackle unemployment and generate wealth, we needed private sector investments. It is not going to come from the public sector. And for the private sector to invest, they also need the government to do certain things,” the governor had said.

With a minimum total external debt of N300 billion, Enugu State appears to be too indebted to be attractive to any private sector investment.