THE recent justification for a loan of N20 billion from Capital Market by the Kwara State government may have drawn scathing criticisms from members of Peoples Democratic Party (PDP) - the leading opposition party in the state.

The PDP believes that the All Progressives Congress (APC) - led government in the state would, through its quests for a lifeline for the governance of the state, plunge it into a perpetual pit of debts.

According to the state's spokesman of the party, Chief Rex Olawoye, "Although I am a trained pharmacist and not an economic expert, I believe that any economy premised on borrowing for survival is not a healthy one.

"Whatever name the government of Kwara may call it, we believe as a party in the state that there is no reason for borrowing at this time, if the treasury is not leaking. We saw what Bukola Saraki's bonds had fetched us. At least we could see some facilities on ground. But what has Governor Abdulfatah Ahmed done in his last five years that could have warranted it to go borrowing? I think as a people, we need to know how he had been managing our monthly allocations from the Federal Government, as well as the Internally Generated Revenue (IGR)," he stated in a chat with The Guardian.

Recently, the State Government hinted of its plans to access the capital market to source for a loan of N20bn. The governor explained that the loan was imperative for prompt infrastructure development.

The government had cited the need to fund major infrastructure projects, which were stalled by the alleged 50 per cent drop in monthly allocations to the state.

The disclosure had also attracted criticisms from the state chairman of the PDP, Chief Iyiola Oyedepo who challenged the Ahmed-led government to mention publicly the "exact infrastructure" it intended to build and the estimated cost.

Oyedepo argued that there must be a veritable plan for food production in Kwara with its expanse of arable land, noting that the Shonga Farm commercial experiment "has yielded our people no profit or good. No one is seeing the produce of the so-called farm in any market in Kwara or even in Nigeria. It is shrouded in mysteries."

Oyedepo also criticised the State House of Assembly (KWHA)'s response to the N20b bond issue when approached by the Governor for approval, alleging that the House's action was teleguided.

As part of efforts to involve Kwarans on the issue, the KWHA, through the Speaker Dr. Ali Ahmad directed its members to hold constituency meetings on preferred projects to be funded under the bond window. The subsequent meetings in constituencies across the state witnessed robust input by Kwarans on the desirability of the bond.

But Oyedepo said, "The so called public input was teleguided as opposition members with reasonable voices were not allowed. They made it public only to their puppets and 'yesmen'. I know what I am saying because of my position as the chairman of the PDP in the state."

Reacting to this allegation, the Senior Special Assistant to the Governor on Media and Communications, Dr. Femi Akorede told The Guardian that Oyedepo's position was based on obsessive inclination to criticise, "even when it is unwarranted to do so."

Akorede said, there was an elaborate forum with the public on the issue and stressed that the government and the KWHA did not only extend the deadline on the issue, but equally entered into serious consultations with major stakeholders. The Governor had briefed the stakeholders at a meeting held at the State’s Banquet Hall, Ahmadu Bello Way, Ilorin.

Representatives of major stakeholder groups including labour, organised private sector, students group, Conference of Nigerian Political Parties (CNPP) market women, artisans, taxi drivers, and journalists attended Ahmed's interactive section Akorede said.

He added: "Over two days, Governor Ahmed, took the 5000-strong audience through his comprehensive plans for infrastructural development in the state. The State Governor said his administration has commissioned a study on Kwara State's Strategic Infrastructure requirements, which identified a N255bn gap.

While he was determined to plug this gap, Ahmed noted that the state government cannot afford to raise such funds within the life time of his administration, hence the decision to implement the strategic projects aimed at bridging the gap in phases, starting with the N20bn bond. Governor Ahmed made it clear that the proposed N20b was one of several platforms for funding the N56 billion capital expenditure in the proposed estimates of the 2016 budget.

"Other sources of funding are Internally Generated Revenue (IGR) and monthly Federal Accounts Allocation Committee (FAAC) inflow into the state. Alhaji Ahmed emphasised that the bond will be used strictly for advertised projects, as it leaves no room for any unauthorised variation. At the end of the interaction, the 5000 stakeholders endorsed the Ahmed administration's infrastructure plan and the proposed bond."

Speaking on the development, Chief Press Secretary to the Governor, Alhaji Oba Abdulwahab said about 70 per cent of monthly federally allocated funds accruing to all states in the country go towards the payment of civil servants' salaries.

Abdulwahab added that Kwara State is number 33 among the 36 states in the ranking of how much is paid to the states by the Federal Government noting: "that situation leaves little room for funding infrastructure development projects. This also underlies the very limited options open to states seeking to fund strategic infrastructure projects that will positively impact their people and boost the levels of economic activity in their respective domains.

"In view of this, it is impossible for even 'affluent states' to fund infrastructure from recurrent inflow of funds such as FAAC. Indeed, some of these states' monthly allocation is five times that of Kwara State. As a consequence, one option is the money market. However, bank loans are expensive facilities compounded by short tenor that leave states little room to maneuver."

But a lecturer of Economics at the University of Ilorin who spoke under condition of anonymity expressed reservation on assessment of bonds by the government as a means of funding infrastructure.

"Although the economics maxim of borrowing if you have the capacity to pay is still relevant at present, we need to look inward as well if we must break even. We need to do more of indigenous technological development to be relevant economically. This proposition will create more job opportunities, reduce crime rates and boost our Gross Domestic Products (GDP)."

The APC spokesman in the state, Sulyman Buhari said it was the norm for governments around the world and indeed several states in the country to fund infrastructure from medium and long term borrowing such as bonds which were cheaper, have longer tenor and relatively low repayment installments.

"In such cases, FAAC allocations and IGR are used as the basis for raising bulk funds for infrastructure. This was the case with N17bn bond obtained by the previous administration of Dr. Abubakar Bukola Saraki in 2009. The N17bn financed the Kwara State University (KWASU); the International Aviation College, Ilorin; the Harmony Advanced Diagnostic Centre; the remodeling of the Ilorin Township Stadium; Upgrading of Asa Dam Waterworks and phase one of Ilorin Water reticulation Projects; Urban and Rural Electrification; Rural and Feeder Road Projects; Ilorin Metropolitan Street Lights Projects; and the Kwara Mall Project."

However, Oyedepo said the projects financed with the bonds under Saraki's administration were not the immediate needs of the people of the state thus making them "white elephant" projects.

He described Kwara as being "a risky state financially" to be trusted with any bond at present just as he opined that the much touted IGR drive was not certain, adding, "the only impetus to make people pay IGR is when a government had carried out its responsibilities to them."

Perhaps Buhari's submission would at this juncture remain the best way to round off the debate when he said: "My brother, the opposition cannot dictate to the ruling party on how it intends to run the affairs of the state. We had been entrusted with the mandate to lead in an overwhelming electoral victory. So let them continue with their talks while we continue with our works."