Governments around the world borrow funds to stimulate their economies and secure the future of their people. When revenues fall short of spending, government must borrow. Borrowing by a government is not a crime; if there are well-spelled priorities and prudent management of funds including efficient debt management strategies.
On the other hand, if borrowed funds are not directed to productive sectors of the economy; forget it- it will constitute an impediment to long-term growth of the economy, open the windows of mismanagement and create citizen mistrust of the government.
Some experts say, not-well-managed commercial debt service and repayments at all times lead to growth retardation- commercial debts have an overhang effect! The government of Governor Ahmadu Fintiri of Adamawa state has so far borrowed billions of naira in just two years- N9.9 billion for the 2000 housing units, N17 billion for critical projects and N4 billion for the Adamawa state university and the recently approved N100 billion bond for agribusiness. Many people are of the view that ‘agribusiness is a generic statement. Though, to their credit, the Fintiri government was able to restructure many loans collected by the previous government, especially the Bindow administration.
As of March 31, 2021, Adamawa state domestic debts stood at N95,223,661,061.51. Massive borrowings without proper forecast and strategy for investment always lead to heavy debt burden and, also create adverse effects for the economy and on the poor people. The big questions – is the Fintiri government borrowing without prioritising? Did the government put in place plans for the efficient utilization of the borrowed funds? Or it is just the same old Nigerian story?- borrowing for consumption
On August 21, 2021, some national dailies published a story on the structural decay at the foremost General Murtala Mohammed College Yola, but few meters away from the school, the Fintiri government is constructing a multi-billion naira flyover and inter-change. Misplacement of priority? There is news making the rounds that the Fintiri government is in the process of renovating and furnishing the Adamawa government lodge in Maitama, Abuja at the cost of N250 million of which N100 million has already been released. Another misplaced priority? The Boni Haruna administration bought the building at the cost of N100 million.
On August 18, 2021, the Adamawa state executive council approved the sum of N56 million for consultants to monitor the completion of the 40km Pella-Maiha road which was awarded in 2007 by the Governor Murtala Nyako administration. The project was worth N3 billion but now N9 billion (the adjustment happened between the period of Nyako-Bindow governments). Although, there is nothing wrong in hiring a good consultancy firm in order to get excellent results, however, prioritising of needs of the people is very important for a government like that of Adamawa state with meagre resources and very poor people. Critics of the Fintiri government always point out that a teething problem with the Fintiri administration is that they are unmindful of capital flight from Adamawa. Most of its contracts are handled by non-indigenes of Adamawa. For example, the consultancy for the monitoring of the completion of the Pella-Maiha road should have been handled by locals- imagine forming a committee with people like Sajo Gella, SYB Yunusa and many more people from that area to handle the monitoring. Fintiri will get the desired results as well score a point on policies and politics at the same time.
The Fintiri government is facing three critical issues. First, misplacement of priority- some of its projects are misplaced ones. Second, the government is facing the issue of public mistrust- however good its intention to borrow; many citizens don’t trust the government. Third, the Fintiri government is also having the issue of poor distribution of wealth. However, to be fair to Fintiri, it is not easy governing Adamawa state, but accepting some good advice can help.
Zayyad I. Muhammad,
[email protected], 08036070980