The Chairman of the Senate Committee on Local and Foreign Debts, Senator Shehu Sani, has raised the alarm that the state governments owe $3,271,960,461 foreign debts.
Sani said in a statement on Saturday that most of the debts were loans collected to provide infrastructure or to create investment opportunities and that many of them might take up to 50 years to service.
He alleged that most of the foreign and domestic loans collected by the states were, however, spent on personal luxuries or wasted in maintaining local political empire or even used to finance white elephant projects and unrealistic political campaign promises.
He expressed the fear that states in the country could end up failing if they kept on borrowing at the current pace, without adequate plans and enough resources to service them.
Sani, who represents Kaduna Central in the Senate, restated his opposition to the plans by the governors of the northern states to obtain huge loans from the Saudi Arabia-based Islamic Development Bank, insisting that the money might end up again in private pockets.
He said, “The Northern Governors had through their Chairman, the Borno State Governor, Kashim Shettima, reacted to my opposition to their move to secure loan from the Islamic Development Bank in Saudi Arabia.
“They insisted I am wrong and they are right. I wish to respond to them. The current foreign debt profile of Nigerian States stands at $3,271,960,461.03. Most of these debts were loans collected in the name of infrastructure or investment.
“There is no tangible infrastructure development in the North commensurate with amount of loans collected by the state governments in the last two decades.
“Most states are incapable of servicing their debt in the next 50 years. Taking cognisance of the current state of our economy, we have been plunged into a debt trap, which our grandchildren will not even be able to pay.
“There is no single export-based investment or industry in the North that is currently in operation towards generating and attracting $1m monthly of foreign exchange.”
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