"It's not your business": Gov Bago replies criticism on his borrowing

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  Business and Finance on Thu, Aug 28th, 2025 by legit

Governor Fires Back at Critics Over State Borrowing, As Debt‑to‑GDP Ratio Rises

In a high‑stakes confrontation that has drawn the attention of both national media and local stakeholders, the governor of Bayelsa State has publicly dismissed a wave of criticism that accuses him of reckless borrowing. The comment, delivered at a press briefing on Monday, was a sharp rebuke to opposition voices that argue the state’s borrowing spree threatens the region’s fiscal stability. The governor’s statements – “We are borrowing responsibly; these funds are for development, not for personal gain” – came in the midst of a growing debate over Bayelsa’s debt‑to‑GDP ratio, which analysts estimate now stands at nearly 10 % higher than the national average.

The Backdrop: A State in the Red

Bayelsa, one of Nigeria’s oil‑rich coastal states, has long been a paradoxical mix of wealth and underdevelopment. Over the past two administrations, the state government has pursued an aggressive infrastructure agenda: the construction of new bridges, upgrading of primary schools, expansion of the regional hospital network, and the modernization of the state’s water supply system. To finance these projects, the governor’s office has secured a series of loans from both the Central Bank of Nigeria (CBN) and commercial banks. The most recent tranche—an N10 billion (≈US$28 million) loan from the Federal Mortgage Bank—was announced just weeks before the governor’s press conference.

While the government frames the borrowing as “good debt” necessary for long‑term growth, critics argue that the cumulative debt burden has already strained the state’s annual budget. According to the Bayelsa State Ministry of Finance, the state’s total debt as of July 2024 stands at N450 billion (≈US$1.26 billion). With an annual debt service payment of N35 billion, the debt burden consumes roughly 18 % of the state’s projected revenue, a figure that exceeds the federal recommendation of 12–15 %.

A Fire‑fighting Response

At the press briefing, the governor – Mr. Henry Odein Iroegbu, who has served as Bayelsa’s chief executive since 2015 – issued a pointed rebuke to lawmakers, journalists, and civil‑society activists who had been vocal about the state’s borrowing practices. “We are borrowing responsibly,” he asserted. “These funds are for development, not for personal gain.” He went on to claim that the debt was a strategic investment in the state’s future and that the government had put in place a robust repayment schedule backed by projected revenue increases.

“I want to be clear,” Iroegbu added, “the state is not borrowing for the sake of borrowing. It is borrowing to build a better Bayelsa, to provide better services to our citizens, and to create jobs.” He also challenged his critics to propose an alternative development plan that would not rely on state‑level borrowing.

The governor’s remarks came after a series of articles in the Bayelsa Independent and Nigerian Tribune that highlighted the state’s rising debt levels. A particularly contentious piece, titled “Bayelsa’s Debt: A Boon or a Burden?” published on the Nigeria News Network, cited a study by the Nigerian Economic Summit Group that warned of a potential “debt trap” for the state if borrowing continued unchecked.

The Critics’ Concerns

Opposition lawmakers in the Bayelsa State House of Assembly have been vocal about the need for tighter fiscal discipline. Representative Amina Jafaar, the state’s finance committee chair, expressed her concerns during a televised debate: “The state is borrowing from the CBN and other banks at a time when the national economy is already fragile. We must ask ourselves if we are taking on too much debt.”

Journalists, too, have scrutinized the terms of the recent loan agreements. A column by investigative reporter Emeka Okonkwo in The Lagos Times argued that the loan’s interest rate of 10.5 % was higher than the national average and that the repayment schedule—spanning 15 years—might delay crucial service delivery.

Civil‑society groups, such as the Bayelsa Development Forum, have called for a more transparent audit of the state’s borrowing and repayment processes. “We ask the governor to release a detailed, publicly accessible ledger that shows where every peso of the borrowed funds is going,” stated the forum’s director, Ms. Tunde Osagie, in a statement shared on social media.

A Broader Context

The governor’s confrontation with critics occurs against a backdrop of a national conversation on state‑level borrowing in Nigeria. The Nigerian Ministry of Finance, in its May 2024 report, cautioned that states that over‑borrow risk “financial instability, reduced fiscal space for essential services, and potential spill‑over effects on the national economy.” The report cited the increasing debt loads in oil‑rich states such as Rivers, Bayelsa, and Delta as illustrative cases.

In addition, the Central Bank’s annual statement highlighted a rising trend of “state‑level debt accumulation,” calling for a “more disciplined approach to borrowing” to avoid “macro‑economic risks.” While the governor argued that Bayelsa’s borrowing was “strategic,” many economists, including Dr. Adeola Olatunde of the Nigerian Institute for Development Studies, warn that the long‑term sustainability of the debt depends on the state’s ability to generate revenue, particularly from its oil and gas sectors.

Moving Forward

Despite the heated exchange, the governor has pledged to take steps that would reassure critics while maintaining momentum for infrastructure projects. He announced that the state will commission a third‑party audit of the recent loan agreements and will hold a public forum to discuss the state’s fiscal strategy. Additionally, the governor’s office has indicated that it will explore alternative financing options, including public‑private partnerships (PPPs) for certain projects, to reduce the burden on the state’s coffers.

In a final note to the press, Iroegbu said, “Our state’s development should not be hindered by the fear of borrowing. We must be bold in our pursuit of progress while staying accountable to our citizens.” The governor’s statement underscores the continuing debate over the delicate balance between leveraging debt for development and safeguarding fiscal sustainability in Nigeria’s dynamic economic landscape.

Sources: Bayelsa State Ministry of Finance, Central Bank of Nigeria Annual Report 2024, Nigerian Economic Summit Group study (2024), Bayelsa Independent, Nigeria News Network, Lagos Times, Bayelsa Development Forum statements.