Princewill Odidi|5 March 2016|11:05pm
When a state is in debt, just like a small business, one of the best ways to get back on your feet and rebound the economy or business is to secure more debt, consolidate existing debt or secure a buy over into the current debt for a lower interest rate.
The new bail out loan if secured should be applied to a sector that can jump start the economy on the short term not long term projects that would outlive the regime before its gains can be measured.
The bail out loan should also be applied to a sector that will readily boost the domestic economy and improve on the short term internally generated income of the state.
Cooperative Agriculture, mining, small business enterprises and a well structured micro credit enterprise public lending structure, easily accessible even to the very poor without any collateral is strongly recommended.
The state or the business concern should cut down on wasteful expenditure and redundant manpower to enable it create savings and new income base for the state.
However, if the state intentionally creates avenues of waste and opportunities for wasteful spendings and retainer ship of redundant and unproductive assumed manpower, once the bail out funds expire and misused, our end sometimes will be worst than the beginning.
This was what happened in Osun State and Imo state. Today, the foreign loans they secured 5 years ago has made them worst than they were originally. Today they cannot even pay salaries.
If we must secure foreign loans, it is important it is applied directly to a productive and responsive sector.
Again, it is strongly encouraged to access facilities from public institutions like the world bank with stretched out repayment plans and possibility of debt cancellations, not predator lending institutions whose fine prints are often hidden in footnotes of deception.
Reverting to predator lenders is not encouraged and should never be an option, those who took that route regretted it.
As a people we can get it right and make our state great again with determination and the will to succeed. In difficult times like these, it is important to listen to the voice of reason.
Princewill Odidi
Is a Public Commentator who writes from Atlanta.
