ReportsNG
Taraba State asked the State Executive Council and House of Assembly to approve a N50 billion loan for developmental projects and the rehabilitation of dilapidated schools and the second-tier bank granted only N15 billion of it in 2023, at an effective cost of roughly 23 percent once administrative charges are added, and the money was spent overwhelmingly on examination registration fees and university accreditation bills rather than the infrastructure projects the loan’s paperwork described, ReportsNG has found out
Documents reviewed by our newspaper found that a Bank granted the Agbu Kefas administration a four-year term loan of N15 billion in 2023 against a N50 billion request approved by Taraba’s State Executive Council and House of Assembly, meaning less than a third of what the state’s own governing bodies signed off on was ever actually disbursed.
Investigators further found that the bank “technically modified the purpose of the loan,” which had originally been stated as being for state developmental projects and rehabilitation of dilapidated schools, without any indication that this change was put back before the legislative bodies that approved the original borrowing purpose.
What the loan proceeds actually paid for reads less like an infrastructure programme and more like a recurrent-expenditure bailout: N654.83 million to register 20,958 candidates for WAEC examinations across 143 public secondary schools; N454.95 million for the full National Universities Commission accreditation of 53 academic programmes at Taraba State University; N496.46 million to renovate a girls’ hostel at the same university; N230 million for accreditation of courses at the College of Education, Zing; N220.75 million for accreditation at the College of Agriculture, Jalingo; and N151.9 million for accreditation of 17 programmes at the State Polytechnic, Suntai.
A bank that changed the terms, and a lender who skipped the compliance check
FRC investigators found the interest rate on the facility, at 18 percent with a further 5 percent in administrative charges deducted upfront, works out to an effective cost of about 23 percent, high by any measure, and the kind of rate Section 41(1)(a) of the FRA 2007 explicitly discourages by requiring concessionary, low-interest terms for government borrowing. The Commission’s report states in direct terms that the Bank did not obtain evidence of proof of compliance with the Fiscal Responsibility Commission before lending the money, meaning the bank under disbursed N15 billion in public debt without the certification Section 45 of the Act requires lenders to demand.
A loan sold to lawmakers as money for developmental projects and dilapidated schools became, in practice, a fund for WAEC registration and university accreditation fees after the bank itself changed what the money was for.
To Taraba State’s credit, the FRC found that all payment documents for the loan were sighted, that MDAs cooperated fully with the verification team, and that the state was up to date with three years of audited financial statements. But investigators also flagged that Taraba’s total domestic borrowing, excluding external loans, stood at N81.33 billion as of December 2023, a debt profile the Commission says warrants sustained scrutiny and recommended the state pursue lower-cost alternatives such as Sukuk financing and multilateral lending, and keep future project durations within a single administration’s term to avoid the multi-year abandonment risk that plagues many state-funded projects.
