Lagos — Loans do not come cheap; it comes with the conditions that keep the borrower enslaved for long time. This is one lesson the present government in Borno State has learnt in the cause of providing infrastructural development.

Loans, and disguised grants have continued to hold many nations and their people hostage, they continued to be in shackles of indebtedness for years without any reasonable way out.

To make matter worst, most of these loans have been repatriated by corrupt leaders to the economies and banks where they were taken from in the first place. It is a proven fact that the burden of debt for developing nations has restricted their development, for smaller nations, it has suffocated it altogether. For instance in 2000, the UNDP and UNICEF calculated that $80b a year for ten years would be enough to ensure that the entire population of the world had basic services such as decent food, access to drinking-water, primary education and access to basic health care. Yet in 2001 alone, developing countries spent $382 billion on debt repayments.

It has also been proven that indebtedness remains one of the biggest barriers to developing countries' effort to build strong domestic economies and improve the living standards of their citizens. For every $1 owed in 1980, developing countries have since repaid $7.50 but still owe $4.This is a massive transfer of resources from the South to the North that makes international institutions talk about "poverty reduction" and achieving "Millennium Development Goals" meaningless.

Yet the spectre of debt is just one concern governments must consider. Borrowing money to fund development can be a viable option, but that is if the reasons for borrowing are clear and justified. Without a clear purpose determined by the borrowers themselves, such loans will not significantly meet real needs, and instead, place a country at the mercy of the lenders and the conditionality they place on such loans.

Experience shows that countries with weak negotiating positions are reduced to implementing economic packages prescribed and enforced by lenders such as the African Development Bank and the World Bank as a condition for the loans. These economic packages are imposed with little understanding of the local political and economic dynamics, and generally serve the interests of the lenders and their business elites better than those of the borrowing nations'. Indeed, the "concessions" a government may be forced to make can be a larger burden than the repayment of the loan itself.

So most times it is a wise decision to afford getting loans that may mean nothing to a country or state, but getting into the purse of corrupt leaders and by extension into their foreign accounts and back to the banks and economies from where the loans came for in the first instance with the only trace in sight the heavy burden of indebtedness on the generations who some times were unborn when the loans were taken.

During Nigeria's second republic, the federal government and most of the state governments because of the downturn in their economies as a result of dwindling oil price took loans to finance their budgets. The impact of the loans was not felt by the people but the nation and its constituent states were compelled to go through series of economic policies dictated by lenders and their backers. The nation continued to bleed under these numerous economic packages hitherto alien to it because of the misadventure of their leaders, but reprieve finally came when the economy witnessed another boom during the administration of Olusegun Obasanjo. The monies that should first be used for development had to be sacrificed to the lenders so that the nation's economy could be freed from the slavery of the western world to which it seems to be eternally in.

Lessons were learnt by wise leaders who were old enough to know the pains the country went through after the loans and disguised grants of the late 1970s and 1980s. Even at this, many of the leaders at all the three tiers of government-federal, state and local refused to learn that it is wiser to manage available resources than selling ones birthright of economy freedom like Esau did just because of a plate of portage that is bound to last for just a while with the sorrow from the deal lasting perhaps for eternity.

While many states in the country are yet to learn the lesson, one state which its leader has decided against loans and grants is Borno. Governor Ali Modu Sheriff has so far shunned every plea of bankers and international agencies to take loans and grants for development purpose. Sheriff who has spent more than six years as the governor of Borno state has depended only on federal allocation which includes Value Added Tax (VAT) and the state's Internally Generated Revenue (IGR) to pay up the state expenditures and provide projects.

The policy position of the governor is no loans, the only resemblance of this are the grants from the Millennium Development Goals which are for projects linked to the universal agenda to see an end by 2015 to such problems as poverty alleviation, maternal mortality and gender inequality among the eight goals. And under the MDGs, the state government has only received conditional grants to boost its health sector and build skill acquisition centres.

Apart from these two areas covered by the MDGs, the state government has done it alone and despite the fact that the governor on his inauguration in 2003 inherited enormous problems as a result of the decay in infrastructure-roads, schools, health institutions, high rate of unemployment and crime, demoralised public service and frustrated pensioners as well as huge debt profile. He launched a redemption programme, to redeem the state from these unsavory situations, targeted at the rehabilitation of dilapidated infrastructure, provision of basic amenities, ensuring social justice and creating job opportunities through the reactivation of ailing industries and the encouragement of private sector investment.

In spite of the dependence on the federation account and IGR, the magnitude of projects executed is legion. A visit to the state which is in the extreme of the country will definitely teach most of the nation's leaders some lesson in management of resources for optimal performance. Projects abound in all sectors and in all nooks and crannies of the state as a testimony to the prudent financial management. Some of these important projects include the numerous road projects scattered across the state, the equipping of the security agencies in the state with new vehicles and modern communication gadgets, 777 and 500 housing estate units were built and a housing estate was also developed at each of the 27 local governments and almost completed is the massive 1000 housing estate in Maiduguri,

In the area of water supply, bore holes are sunk in parts of Maiduguri, the state capital and this is replicated in all the 27 local government areas of the state. The entrance and exit ways from major towns in the state are lightened with eco-friendly solar street lights; in the health sector, the Shehu Umar Ultra modern hospital built and completed by the Sheriff administration and boast of the state of art facilities is the pride of the state. In this sector, some other well equipped hospitals and health centres are built outside of Maiduguri, while there is renovation of Borno State Specialists Hospital and schools amongst others.

The state has in the last six years sent a message of no loans and prudent financial management, but one may perhaps asked how come this policy. The answer is provided by the state Commissioner for Finance, Alhaji Abdulrahman Terab who explained that the administration chose to be prudent and accountable with its finances.

"As a government, you look at the remote problems that you bequeath to successive government and generations yet unborn. Everybody knows the problems loans and all such facilities bring to successive generations and an entity like a state. This government you should understand inherited a lot of debts from past governments and particularly the immediate past government and that informed the decision of this government not to take loans, after looking at how difficult it was to pay up the backlog of the loans," the commissioner said.

He added that "the government also observed that it can actually do a lot without any loan even after repaying the backlog. If you look at the benefit analysis of the two it is better to achieve what you want and try to exercise control, instill discipline within the system, then if there is anything absolutely necessary that requires you to take a loan, then you take a loan."

The finance commissioner said the state decided to be more realistic with its projects rather than being a dreamer going after what is beyond its reach, noting that "we are all aware of what past loans have done to the state, the unfortunate aspect is that most of these loans if you go through the books some of them do not even exist. Some of them were for highly non-prioritised projects that have little or no impact on the masses."

Terab also revealed that the policy instead of affecting the state adversely has added to strengthen it. He said the administration paid between N8 and N10 billion in the past, being obligations from previous governments. This has made the state sound and in no way hindered or deterred from giving the best to its people.

He said with the state's savings there is no fear against the global recession on the averred commitment to the administration next line of action. "Lot of schools is underway, health sector projects, roads with the coming on stream of the road maintenance agency which though have all the facilities needed but still have to procure the needed materials like bitumen to construct roads in all parts of the state and water projects are still in the pipeline among others."

Terab who asked other governors to come to Borno state and learn said that Sheriff "has the opportunity and luxury of obtaining loans just like any governor, spend it the way he wants to, he has the full mandate of his people and opportunity to do what he wants but he thought on his own that this is the time people should be realistic and this is the type of government and governance and type of leadership style that I will like to implore all Nigerians to imbibe."