The Rivers State Government recently obtained a revolving loan of N200bn from banks for project execution in the State, with a plan of repayment through Internally Generated Revenue on an agreed interest rate.

The decision of the State Government  is in apparent conformity with the desire of the Rivers State Governor, Rt Hon. Chibuike  Amaechi to complete all projects initiated by his administration. In seeking the loan through a request of  approval  by the State House of Assembly, the Governor explained that it does not imply that Rivers State was broke, rather it became  necessary to meet up targets by ensuring that money is not a constraint to speedy delivery  of ongoing projects.

In the course of its deliberation and subsequent approvals of the two loan  requests, the Rivers State House of Assembly, certified that the internally Generated Revenue, (IGR) profile of the state was buoyant enough to service  the loans on agreeable terms. The State lawmakers also consented to the necessity of the loan in view of the “many people oriented project embarked upon by the Governor”. The Assembly therefore gave the governor smooth ride to stave off all distractions through its legislative backing.

Pundits and virulent  critics of the Government has however expressed reservation over its decision to obtain the loans, referring to it as “a booby trap for fiscal impropriety and profligacy in the State”.

In the general estimation of analysts, the  propensity for loan is a predisposition to mortgaging the economic future of the state to serving of accruing interest of accumulated loans.

Analysts believes that Rivers State by all standard is disposed financially to carry out projects without recourse to borrowing, and as such accuse the State Assembly of a tacit connivance to squander the state resources.

But the Rivers State House of Assembly Stand by its decision and as a follow up is exploiting its legislative will to augment governments decision and to get it appropriately channeled  towards accountable  governance. Recently the State Assembly initiated a bold move to forestall the looming prospect of a debt burden for the State.

The initiative came at the instance of the leader of the  Assembly Hon Chidi Iloyd  through a privately sponsored  bill, calling  for the establishment of a debt management office in the state. The bill referred  to as “Rivers State Debt  management  office (Establishment)  bill 2011”, is an initiative of the Emohua  born lawmaker to strengthen the Rivers State Government on borrowing and debt  management  to forestall a crippling debt burden in the  State.

Introducing the bill on the floor of the House, Hon Chidi Iloyd, said “the law is to provide for the raising of loans through the issuance of bonds, notes and  other debt securities and for connected purposes”.

He said the bill when passed as law; “will serve as a legal framework to guide the government in the raising of bond and loan for pursuance of projects, building of infrastructure for the economic development of the State”.

Reacting to public criticism of the bill, Hon Chidi Iloyd denied allegations that the bill stands to institutionalized profligacy in the spending of public fund, by giving limitless powers to the Governor to Squander the state. Hon Ilyod said the bill was part of the process of consolidating the state revenue based.

The bill had undergone its first and second readings on the floor of the house and it is presently been debated upon by members of the state Assembly.

The bill which has 27 clauses and 28 citations, came under debate on the  floor of the House after members gave it  proper perusal and digesting it details for proper deliberation.

While the lawmakers appreciated the fact that Government’s decision to borrow, presupposes the fact that there must be proper management of the loan obtained for fiscal propriety in the state, some of them expressed reservation on the workability of the bill.

In his contribution on the floor of the House, Hon Victor Ihunwo representing Port Harcourt constituency III called for the withdrawal of the bill on the grounds that it demerits out-weights it merits. Hon Ihunwo reasoned that beyond creating employment opportunities for Rivers people, “the  bill did not  include how the debt management will brief the House periodically to avert  the temptation of borrowing  by subsequent governments. He also argued  that the state do not require more borrowing.

Debating on the issue, Hon Golden Chioma kicked against  the recommendation that the Rivers State Commissioner for finance should be the head of the debt management office.

He called for an independent chairman for the office arguing that the state commissioner for finance was already saddled with executive  functions. He called for  fresh  nominees to appear before the House for screening for appointment as directors of the debt management office, while the Hon Commissioner for finance, the secretary to the State Government, (SSG) and the Accountant  General of the state should  serve as members.

Hon Chioma who supported the bill, said it was in line with ‘the federal government act which made provision for the establishment of debt  management office” while calling for  the domestication of the bill in Rivers State, he  said the five years duration of tenure  recommended for the directorate  should be  reduced to four years.

Hon Ikunyi Ibani of Andoni Constituency, supported the bill and stated that “if the government is committed to borrowing  it should also have a modified  means of repayment.

He thanked the leader for sponsoring the bill and tasked the Assembly on the need  for proper  monitoring of the loan facilities.

His words: “If  the Assembly  has power  to grant the executive  request to borrow it also has the power to regulate  the mode of  repayment”. Hon  Ibani also suggested  that the debt management  office should be established as a department in the Rivers State Ministry of Finance.

Hon Augustine Ngo of Abua Odual constituency who also supported the bill said it was timely and also provided  the opportunity for “the Assembly to  put the records straight and wade off criticism and media hypes over alleged endorsement of profligacy in public spending”. Hon Ngo also shared the same view with Hon Chioma that the  directors should be fresh nominees to be screened by the Assembly.

Hon (Dr) Innocent Barikor of  Gokana Constituency also supported the bill on the ground that  it will check the tendency  of abuse of public fund. He said people with proven integrity and the right technical expertise  should be appointed in the directorate.

Also contributing, Hon Belema Okpokiri, of Okrika constituency said  the establishment of the debt management office was necessary but suggested  that “overriding powers should be vested in the Assembly on the activities of the office”.

Hon Michael Chinda representing Obio/Akpor Constituency I, described the establishment of the debt management office as “part of Government planning strategy on debt  management.”

Hon Chinda  called for the inclusion of a clause in the bill stipulating that  “all debts incurred by a particular government should be zeroed to bearest  minimum, by ensuring that all such debts are liquidated within the last lapse of the  administration.” He also suggested that the Attorney  General of the State should be a member of the board of directorate of the debt management office.

Hon Gift Nwokocha of Ogba Egbema Ndoni Constituency I, supported the bill and pointed out that, “issues of debt management is necessary but it is important to know when it is necessary for the state to borrow and when not to borrow”.

The deputy speaker of the State House of Assembly, Hon Leyii Kwane who presided over the session, said  the bill debated on the floor of the house was critical to the development  of the  state, and added that members  will be given  due opportunities to contribute on the issue.

The Rivers State debt management office (establishment) bill 2011, is the first privately sponsored  bill since the resumption, of the  7th  House of Assembly in Rivers State. Subsequent deliberation of the House will determine if the bill will scale through as law.

Taneh Beemene