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HomeUncategorizedThat Kaduna State World Bank Loan: Issues Arising

That Kaduna State World Bank Loan: Issues Arising





Three issues are trending now in Kaduna State: the face-off between the State Government and NUT in respect of the threat by the State Government to sack about 21,780 teachers that have allegedly failed the Primary Four competency test; the request for loan facilities to the tune of $350 Million from the World Bank; and the impending restructuring and possible sack of some staff in the 23 Local Government Councils of the State.


I had earlier spoken about the face-off between the State Government and NUT/teachers. Today, I will speak about the World Bank loan, but not in a manner that may meet your expectations.


There are many good reasons why a Government may have the need for loan facilities, both foreign and domestic, from banks and other financial institutions. Top among these reasons is for the purpose of infrastructural and other sundry developmental projects in the State.


This becomes necessary where both the statutory subvention/allocation and the internally generated revenue accruable to the State are not sufficient to meet with the huge profile of both its recurrent and capital expenditures.


The request of the Kaduna State Government to obtain a loan facility of $350 Million from the World Bank may not be outside these and other cogent reasons. For this, the State Government may be justified to source, request for, and process this loan facility from the World Bank.


But, there are latent issues embedded in this seemingly good intention and plan.


The politicization of the whole process has demurred whatever good intention it might have. An instance is the face-off between the State Governor and the Senators from the State which is now common knowledge.


The demonstration by some women demanding the Senators, especially the Senator representing Central Kaduna Senatorial District who is also the Senate Committee Chairman on Foreign Debts, to support the loan was unnecessary; and has also belittled the whole essence of the loan.


It merely portrayed the political desperation of the sponsors of the demonstration to obtain the loan, and not the genuine need for the loan. I think the sponsors did a bad job there. Another group of women could also be sponsored and orgainsed to stage a demonstration against the loan. In that event, which of these groups should be taken seriously? A serious issue of this magnitude should not be handled on the pedestrian pedestal of demonstration by sponsored women.


If the State Government genuinely needs this loan facility for developmental purposes, then there must be a synergy and good rapport between the Governor, as the Chief Executive, and the Senators from the State. If such rapport exists, the Governor can go to sleep, while the Senators do the work for him to ensure that the Senate approves the loan effortlessly. But, this is not the case here.


Even the Members of the Kaduna State House of Assembly that have taken it upon themselves to intervene in this face-off might have embarked on an exercise in futility. The face-off between the Governor and the Senators, especially those representing Central and Southern Kaduna, has been lingering for quite sometime now without any intervention from these Members.


What is special or spectacular about this loan that necessitated them to intervene now? Would they have intervened if there was no loan issue involved? Is their intervention sincere or self-serving? Is it for public or private good?


The Online version of the Vanguard Newspaper of reported that, statistics available from the Debt Management Office shows that Kaduna State has a foreign debt profile of $225.28 Million; and holds 6.16% of the sub-national foreign debts. Kaduna State is  second after Lagos State. (See the Online version of the Vanguard Newspaper of 2/05/2017, available at www.vanguardngr.com)


If the total foreign debt profile of Kaduna State is $225.28 Million, then it will attract public curiousity if this Government is requesting for $350 Million from the World Bank in a single swoop. This amount is about 75% more than the current total foreign debt profile of the State. And, if the loan is accesed, the total debt profile will be $575.28 Million. This is quite huge!


The timing for the loan also raises concern. If the request for the loan is ultimately approved and granted, the expenditures are likely to be captured in the 2018 budget. We all know that primary elections will be conducted next year, thereby heralding the commencement of vigorous and aggressive political activities in the country preparatory to the 2019 general elections.


Why did the State Government not seek for this loan earlier? Why would the State Government seek to obtain and spend such huge amount of money in an election-active period? Will it have the time to judiciously spend the money in accordance with the purpose for which it is granted?


The burden to convince the people of Kaduna State on the genuine and sincere need and purpose for this loan lies with the State Government.


But, so far, it has expended more time and energy in the face-off with the Senators and fighting other perceived political opponents than in discharging this burden.


Despite all the odds, I wish the State Government all the best.





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