The administration of Akwa Ibom State paid N104.66 billion in interest on loans it had obtained from commercial banks during the previous eight years, according to Policy Alert, a Civil Society Organization (CSO) that works on fiscal and ecological justice in the Niger Delta.
According to the group, Akwa Ibom State’s administration paid commercial banks N104.66 billion between 2015 and 2022, which is just N600 million short of the greatest annual revenue (2022) a neighboring State, Abia State, had in the eight years under consideration.
This was said in a statement released on Friday by Faith Paulinus, the organization’s program officer for fiscal and governance reforms, following the 8th annual Open Budget Forum (OBF) for Akwa Ibom State, which took place on Tuesday in Uyo.
According to the organization, an examination of Akwa Ibom State’s financial documents from 2015 to 2022 revealed that the following interests were paid: 2015: N4.46bn; 2016: N12.84bn; 2017: N14.3bn; 2018: N12.4bn; 2019: N12.2bn; 2020: N10bn; 2021: N15.51; 2022: N22.95bn.
In the last eight years, the interest rate for each loan secured by the government of Akwa Ibom State has not only been veiled in secrecy, but the amount paid has also shown a red flag in the negotiations, according to the statement.
The group stressed that the government should be more transparent about the terms of each loan it takes out because Akwa Ibom State pays a higher interest rate on commercial bank loans than Delta and Rivers States, whose debt loads are larger than Akwa Ibom State’s.
“What is more concerning in the interest paid on the loans obtained within this period is the source from which these loans came,” the statement continued.
“Of the 57 loans taken out during the time period under examination, 28, or almost half, were provided by Zenith Bank. 13 of the 18 unpaid debts that the State has not yet paid off are from Zenith Bank.
“It is well known that Mr. Udom Emmanuel, who presided as the State’s governor during this time, was also the Executive Director of Zenith Bank, a curiously generous bank that has granted the State loans with the payment of contentious interest.
This raises more questions for the public about the transactions that may have resulted in the exorbitant interest rates Akwa Ibom State paid on its commercial bank loans.
The group urged the Akwa Ibom government and accountability agencies to look into the agreements about the interest payments and retrieve any lost money.