It is criminal borrowing when a State Government that ought not to borrow owing to availability and abundance of material and capital resources; borrows and becomes a serial borrower. It is also criminal borrowing when what has been borrowed is made incapable of repaying itself owing to its channelisation into crooked, white-elephant and unproductive sectors (i.e. payment of government and civil service wage bills and diversion and misappropriation of public funds). Another form of criminal borrowing is where a State Government conceals and suppresses its actual borrowing financial sheets in a manner that breaches the law, misinforms and misleads the public.

On the other hand, governance deficiencies are obtainable where the fundamental essence of public governance (social services provision and delivery) is in shambles resulting in public accountability crisis, energy crisis, health crisis, food crisis, shelter crisis (including children of the street and children in the street), water & waste management crisis, environmental crisis, education crisis, infrastructure and maintenance crisis, public wage crisis, etc. Governance deficiencies are fundamentally driven by corruption and armchair policies and actions leading to inability, incapability and unwillingness to effect adequate non borrowing resources mobilisation. Government is deficit when a State is left in deep financial crisis resulting in huge debts and diminishing capacity of the electorates to feel the presence and impact of the government.

From our recent study of the state of public governance in Nigeria’s six geopolitical zones and the Federal Capital Territory, criminal borrowings are common place in Nigeria’s three axis of wealth: Lagos State, the South-South or Oil Niger Delta and the Federal Capital Territory (FCT). The referenced three axis of Nigeria’s wealth ought not to borrow to govern. Lagos State, for instance, is a N450B economy including N300B annual Internally Generated Revenues (IGRs) and over N100B annual federal allocations. The FCT is the contemporary capital of Nigeria with multi billion naira tax revenues annually. The Niger Delta or South-south zone, comprising six States of Rivers, Akwa Ibom, Bayelsa, Delta, Edo and Cross River, is the country’s oil liquid cash capital and sole beneficiary of the country’s constitutional 13 per cent oil derivation proceeds with the States of Rivers, Akwa Ibom, Bayelsa and Delta getting the lion’s share.

In spite of these huge revenue potentials and realisations, the referenced three axis of Nigeria’s wealth have borrowed and borrowed to the point that they have become criminal and serial borrowers. Today, Lagos State alone, has cumulatively borrowed at least N501.2B, out of total of N740B owed by the South-West geopolitical zone. The South-south zone or Oil Niger Delta has total criminal loans of at least N717.9B, while the Federal Capital Territory (FCT) is burdened with at least N91.3B teething loans. In other words, the referenced three axis of wealth in the country have total criminal debts of at least N1, 332.818 trillion or about $7B (based on N190.00 per USD).

This is out of the total sub-national debts of N2,205 trillion or about $11B cumulatively owed by the whole 36 States and the FCT; comprising sub-national local and external debts as at 31^st December 2013 and 31^st December 2014 respectively (source: Debt Management Office, Nigeria 2015). The social wealth creation, distribution and spread in the referenced areas is found by our findings to be acutely uneven and lumped in the hands of privileged few including thieving current and past public office holders.

The other aspect of criminal borrowings, which has to do with concealment and suppression of the actual borrowing financial sheets with intent to breach the law and defraud, misinform and mislead the public was found to be common place in many states including some states of the South-Sast zone. Out of the two sub-national debts categories (local and foreign) owed by the 36 States and the FCT; the referenced sharp practices are common place in local debts category. In other words, while the States and the FCT’s external debts’ records maintained by the Debt Management Office (DMO) are reasonably authentic, the reverse is the case in the area of local or internal debts’ records also maintained by the DMO. Nigeria’s Debt Management Office (DMO) was created in October 2000 to centrally manage the country’s debts.

The authenticity of the sub-national external debts of the 36 States and the FCT is derived from the fact that the Federal Government of Nigeria serves as collateral for the states and the FCT seeking to borrow externally. But in the aspect of local debts, the processes and records appear to have been left in the hands of the affected States, their Houses of Assembly and the lending individuals and institutions. In transmitting the records of local debts to the Debt Management Office by the affected states, bargaining and persuasive methods are applied and this has extensively encouraged manipulations and suppression of records leading to the affected states local debts profiles being under-reported by the DMO. This is owing to the fact that there appears to be is no existing law of the Federation making it compelling and punitive for States to transmit the actual records under reference to the DMO. It only requires the integrity and openness of any of the affected State Governments to come clean with true picture of its local debts.

Unfortunately, integrity and openness is found to be the direct opposite of public policies and actions of most of the affected states. In Imo State, for instance, its local debts records at the DMO saying the state owes only N12.6B as local debts as at December 2013 is mostly likely fallacious, criminal and misleading. The state is independently accused of owing more than N60B. As a matter of fact, a former governor recently disclosed that the state was in cumulative (local and foreign) debts of over N100B. In the case of Abia State, its DMO’s quoted local debts of N31.7B as at December 2013 may most likely be untrue. The Orji Uzor Kalu’s former regime was once accused of incurring total debts of N29B. In Anambra State, the latest DMO records saying the State now owes N3.02B as local debts are likely misleading because in its early 2014 records, the State was credited with a total local debt of N6.2B. How possible is it for the State to repay N3.18B in six months of 2014?

On the other hand, the DMO’s records saying Anambra State’s external debt as at December 2014 was $45.1M; is not only convincing but also shows that the State borrowed $21M in the last six or seven months of 2014. The State’s external debts as at December 2013 were $24M. The total of N72.7B, which the DMO gave as total local debts of the Southeast as at December 2013, is acutely under-represented. The zone may be in actual local debts of over N220B in the period under review.

Similar criminal situations are common place in Ebonyi with N13.26B quoted by the DMO as its local debts; Enugu with N12.06B as its current local debts; and other States in South-south, North-East, North-West, North-Central and South-West geopolitical zones. The referenced ugly situations are compounded by the fact that the DMO has not updated the local debts records of the 36 States and the FCT for 2014 fiscal year.

Though the Debt Management Office has adjusted upwards the total local debts of the 36 States and the FCT from N1, 467 trillion in December 2013 to N1, 707 trillion in December 2014; showing that the referenced States and the FCT further incurred extra N239.5B in 2014 fiscal year, but this has not been included in its State-by-State breakdown posted on its official website. If this is added, the individual States’ local debts figures will be higher.

It is independently held that another N1 trillion hidden and criminal debts of local contents belonging to the 36 states may exist in the country’s six geopolitical zones. In the Southeast, at least N150B local debts may have been hidden with Imo and Abia states taking the lion’s share; followed by Enugu and Abia states. Anambra State’s hidden debts might have commenced in 2015 fiscal year. In the South-South, over N150B hidden debts may exist particularly in Rivers State, which officially owes N138.04B (both local and foreign). In the South-West, over N200B hidden debts may exist particularly in Lagos State, which is already indebted officially to the tune of 501.2B (local and external). In the North-Central, North-East and North-West zones another N500B States’ hidden debts may exist.

It is important to note that these internal debts of the states under reference do not include public and civil service wage debts, which worth hundreds of billions of naira across the six geopolitical zones of Nigeria. In Bauchi State alone, a whopping sum of N11B is owed the State’s retired workforce. Several months of salaries and allowances are owed active workforces in several states of the Federation.

Conversely, in the entitlements of top government appointees and elected officials including security votes and other sundry allowances; they are deducted, collected pocketed at source leading to criminal governance and governance deficiencies being common place in the affected geopolitical zones and states.

•Being Part One of a statement on ‘2015 Polls: Criminal borrowings and governance deficiencies in Nigeria’s geopolitical zones’ issued today in Onitsha by Intersociety. It was signed by Emeka Umeagbalasi, Board Chairman; Uzochukwu Oguejiofor, Esq., Head, Campaign & Publicity Department; and Chiugo Onwuatuegwu, Esq., Head, Democracy & Good Governance Programme. Photo shows DG Debt Management Office, Dr. Abraham Nwankwo.

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