Tuesday, June 7, 2011

Akwa Ibom State goes broke

The Akwa Ibom State Government is seeking a loan of N3 billion from the Federal Mortgage Bank of Nigeria as part of efforts to boost housing development in the state.

The State House of Assembly has already given its approval for the loan facility following a request made to it by Governor Godswill Akpabio.

The loan is coming on the heels of a directive by the Revenue Mobilisation Allocation and Fiscal Commission that the state government should make a refund of N10 billion to the Rivers State Government following the loss of 86 oil wells which had been ceded to the state.

Analysts say the move by the state government to obtain a loan to prosecute its housing scheme was an indication that it was increasingly coming under financial pressure and could be facing credit squeeze in no distant time.

According to them, the state government had in the past executed multi million projects including the N33 billion Ibom Tropicana and Entertainment Centre, several kilometres of roads, as well its airport project worth millions of naira without obtaining loan from banks or any other financial institution.

Noting that the loss of the 86 oil wells might have negatively affected the revenue profile of the state government, analysts maintained it was a clear indication that next year’s budget would witness cuts in many key sectors, a development they say would slow down economic activities in the state.

Giving his support to the loan, Jerome Isangedighi, who served as a leader in the Akwa Ibom fourth assembly, noted that the request for the loan approval was timely, adding that the housing scheme would address the needs of civil servants in the state. According to him, it would be difficult for government employees to afford houses of their own without an intervention by the government.