Kwara Coalition for Good Governance and Accountability (Kwara-CGGA) has called on the Economic and Financial Crimes Commission (EFCC), to probe an N1bn loan the Kwara State Government allegedly secured from a bank on the eve of the general elections, insisting the loan was suspect and in bad faith.
In a statement by its secretary general, Hassan Omoiya, on Sunday in Ilorin, said it has intelligence that the state government obtained the loan on 13th February from a first generation bank using the remittance of Kwara State VAT allocation due in February and March 2019 as collateral.
The statement reads: “We urge the EFCC and indeed the Federal Ministry of Finance to determine the appropriateness of utilization of credit facility of N1 billion naira by Kwara State Govt at the twilight of general election and the status of VAT Account as collateral for the credit facility in the absence of prior approval and authorisation from Debt Management Office and Federal Ministry of Finance in tandem with extant laws and regulation on granting of loan to State Governments.
“It is our expectation that your investigation will extend to individuals and corporate institutions that participated in the unwholesome act with a view of prosecuting the affected individuals and institutions with attendant cost and penalty.”
The statement further said it was clear that the loan would be used to prosecute election for the ruling PDP in Kwara State, adding: “It seems the state government remote-controlled by Senator Bukola Saraki doesn’t want to change its ways despite efforts to end misuse of public funds by the President Muhammadu Buhari administration.”
Meanwhile, the state Commissioner for Finance, Demola Banu, in his reaction said “owing to the consistently low and unstable federal allocation, the state government often secures short term loans from banks to augment inflows to meet monthly obligations.
“These obligations include salaries, pensions and overheads as well as liabilities such as payments to contractors and gratuity arrears. States affected by the consistent drop in monthly allocation often augment the shortfall with bank loans. Kwara State is no exception.
“Additionally, banks only grant loans following due diligence which examines the capacity to repay and what the facility will be used for. Any facility obtained by the state government, therefore, goes only towards budgeted expenditure. It is through this prudent management of funds that we are able to pay salaries, pensions and subventions as well as fund major infrastructure besides providing repayment guarantees. This administration will also liquidate these short term loan interventions by or before it leaves office.”
