The Delta State House of Assembly on Tuesday approved the request of the State Governor, Ifeanyi Okowa, to borrow the sum of N150 billion in favour of the state government.
The loan which is a bridging finance facility is coming barely one year to the end of the tenure of the current administration in the state.
According to NAN, the governor’s request is contained in a letter which was read at the plenary of the assembly by the Speaker, Chief Sheriff Oborevwori in Asaba.
Why the state government is borrowing
Okowa said the requested credit facility which has Zenith Bank PLC as the “lead arranger, would be principally to settle the arrears of unpaid certificates earned by contractors with respect to the completion of some critical ongoing legacy projects awarded by past and present administrations in the state.
The governor also said that part of the loan would be used to take care of outstanding pension commitments to the state and local government areas pensions in the contributory pension scheme, amounting to N20 billion and N10 billion respectively.
The governor said, “The speaker and members of the state house of assembly, I wish to inform you that the state is expecting refund from the Federal Government, being Petroleum Subsidy Payments made without recourse to the 13 per cent derivation due to oil-producing states from January 1999 to Nov. 30, 2021.
“Delta state’s portion in this regard amounted to N270.6 billion.
“Bearing in mind the administration’s resolve to finish strong, it is necessary for the state to capitalise on the refund to defray arrears of unpaid certificates earned by contractors with respect to completion of some critical ongoing legacy projects awarded by past and present administrations.”
The majority leader of the House of Assembly, Chief Ferguson Onwo moved the motion for the approval of the credit facility was moved by the Majority leader of the assembly, Chief Ferguson Onwo.
The motion which was unanimously adopted by the house, assembly when put to a voice vote by the speaker, was seconded by the Chief Whip, Mrs Pat Ajudua.
What you should know
- Recall that earlier in February 2022, the Delta House of Assembly had approved Governor Ifeanyi Okowa’s request for N12 billion bridging finance facility for the state from the Central Bank of Nigeria (CBN) to cushion the effect of resumption of repayment of the Federal Government’s intervention facilities on the expiration of the forbearance period.
- In December 2021, the Delta State House of Assembly approved a request by Governor Ifeanyi Okowa for a N20 billion facility from Fidelity Bank Plc to finance the state government’s five per cent equity in the UTM offshore Limited Floating Liquified Natural Gas (FLNG) Project