Delta explains new N150 billion loan request approved by lawmakers
The President of the Okowa College of Commissioners and State Commissioner for Finance, Sir Fidelis Tilijie and his counterpart at the Ministry of Information, Mr. Charles Aniagwuexplained the reasons for the loan granted by Zenith Bank, an indigenous commercial bank.
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. federation oil.
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 of 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 this is of the close of a particular term, it has become very important that we ensure these legacy projects, including the new Secretary of State building, are fully paid for before we leave 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 300 million naira per month for pensions due and just recently it was increased to 500 million naira 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 reduce payments as well overdue to local government retirees..
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 the “Okowa Administration Legacy Projects”, including the Casaba State Secretariat Complex, the Orere River Bridge, the Ode-Itsekiri Bridge, the Koka Junction Asaba Flyover and Interchange, the Bridge over the Ethiope River at Obiaruku, the Owa-Alero drainage canals and the projects being implemented at 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, headed by the Speaker, the Hon. Sheriff Oborevworion Monday gave Governor Okowa the go-ahead to secure the N150 billion commercial bank bridge loan facility.