Policy Alert queries payment of N104.66bn interest on Commercial Banks loans by Udom-led administration

Policy Alert, a Civil Society Organisation that promotes fiscal and ecological justice in the Niger Delta has described as unacceptable the payment of N104.66 billion by the government of Akwa Ibom State as interest on loans taken from commercial banks in the last eight years.

The organization said the N104.66bn which the government of Akwa Ibom State paid to commercial banks between 2015 and 2022 is only N600 million short of the highest annual revenue (2022) a neighbouring State, Abia State had in the last eight years under review.

Policy Alert in a press statement signed by the organisation’s Programme Officer, Fiscal and Governance Reforms, Faith Paulinus, after the organization’s 8th annual Open Budget Forum (OBF) for Akwa Ibom State held on Tuesday in Uyo said analysis of the financial statements of Akwa Ibom State between 2015 and 2022 has shown 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.

The statement said in the last eight years, the interest rate per loan obtained by the government of Akwa Ibom State has not only been shrouded in secrecy but the amount paid has revealed a red flag in the deals.

The organization insisted that for Akwa Ibom State to pay a higher commercial bank loan interest than Delta and Rivers State whose debt burden are higher than Akwa Ibom State gives more reason the government must come open on its deals per loan obtained.

The statement added ” 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 which the State is 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 organization called on the government of Akwa Ibom and accountability institutions to investigate the deals on the interests paid and recover funds.