Delta explains new N150 billion loan request approved by lawmakers

Omon-Julius Onabu in Asaba

The Delta state government on Wednesday explained the reasons behind its request for the N150 billion loan facility sent to the state House of Assembly by Governor Ifeanyi Okowa on Monday, raising concerns that the money can be spent by the government on activities related to the upcoming general elections in the country. .

The President of the Okowa College of Commissioners and State Commissioner for Finance, Sir Fidelis Tilijie, and his counterpart in the Ministry of Information, Mr Charles Aniagwu, explained the reasons for the loan granted by Zenith Bank, a commercial bank native.

They explained that the Okowa administration was encouraged to seek legislative approval of the loan in the context of the accrued liabilities provided by the Federation account under the 13% diversion fund for oil producing states. of the federation.

The finance commissioner said that following an agreement reached with the federal government on the reimbursement of years of wrongfully deducted funds belonging to the beneficiary oil-producing states, Delta should receive two tranches of 257.6 billion. naira and more than 130 billion naira over the next five or six years.

Therefore, in order to avoid the probable depreciation of the value of funds expected from the Federal Government in light of the constant rates of inflation, the State Government has decided to extend a loan of N150 billion to enable the government to further alleviate the enormous inherited burden. by the Okowa administration.

The finance commissioner said the funds totaling N270.6 billion should have been received a long time ago, but because the federal government could not pay all the bulk money, the oil-producing states have reached an agreement for part of it to be paid. within three years and the other party within five years.

Tilijie said, “After reducing the government debt profile from 151 billion naira to 72 billion naira, it is important that we have so many more contracts that we have awarded within the given time frame and because t is the close of a particular term, it has become very important that we ensure that these legacy projects, including the new Secretary of State building, are fully paid for before leaving office.

“Apart from the fact that we pay former contractors, we also ensure that even newly awarded contracts, which we call legacy projects, are also completed on time.

“The governor is also very aware that retirees are suffering. When we took office in 2015, the total pension arrears were N35 billion and we tried to reduce these arrears.

“The state government has approved payment of N300 million per month for pensions due and just recently it was increased to N500 million per month.

“To further reduce these past pension obligations, from the facility we will spend N20 billion on unpaid state pensions and N10 billion on the Office of Local Governments as a grant to enable them to also reduce the outstanding payments to local government pensioners.

Tilijie assured that the bridging loan facility would be used cautiously to offset debts owed to many contractors with certificates for various completed projects, especially “Okowa administration legacy projects”, including the State Secretariat Casaba, the Orere River Bridge, the Ode- Itsekiri Bridge, Koka Junction Asaba Flyover and Interchange, Ethiope River Bridge in Obiaruku, Owa-Alero Drainage Canals and Ongoing Projects execution in the three new universities.

The completion of the strategic Asaba-Ughelli dual carriageway which crosses Ogwashi-Uku, Kwale, Isoko to Ughelli from the state capital is also captured.

Around N50 billion of the requested loan would also go towards paying state pensioners’ entitlements and further assisting the Local Government Office.

Part of the N150 billion loan would also be used to fund the Warri/Effurun drainage project, the finance commissioner said, explaining that the loan facility was really soft in nature as it was offered on the basis of said loan fund. accumulated derivation wrongly retained. of the Delta and other beneficiary states, which serves as a defined and sustainable source of revenue to cover the loan facility.

He added that the government does not discount the unpaid funds expected from the Federation account at 100% because the Okowa administration is aware of the next administration in 2023, saying it is a way to save money. for the new government and to ensure that the current government left only an insignificant amount of debt.

The state House of Assembly, led by Speaker, Honorable Sheriff Oborevwori, on Monday gave Governor Okowa the go-ahead to secure the N150 billion commercial bank bridge loan facility.

Comments are closed.