Ogun Assembly approves N109bn for loans refinancing

Ogun State House of Assembly on Tuesday approved Governor Dapo Abiodun’s request to restructure and refinance various loan facilities obtained between 2015 and 2017 by the immediate past administration, amounting to about N109 billion.

The Majority Leader of the House, Yusuf Sheriff, moved the motion for the approval of the loans and seconded by a member representing Ijebu Ode State Constituency, Kemi Oduwole.

Some of the lawmakers who contributed to the debate unanimously agreed that the move would allow the government to meet the short fall in the price of crude oil per barrel at the international market.

According to the legislators, the shortfall had impacted negatively on the global economy, thereby resulting in revenue decline for all tiers of governments in the country.

In his remarks, the Deputy Speaker, Oludare Kadiri, submitted that the approval would assist to the tenor of the facilities to enable it embark on more infrastructural programmes as encapsulated in its cardinal programmes and meet other financial obligations.

The governor had in his letter to the House, stated that the need to refinance the various loans in the state’s debt stock had become imperative with a view to providing “financial relief to the state in managing its available resources and enhance infrastructural development across the state.”

The letter partly states; “I have extensively considered the sustainability of this program to Ogun State and this includes: To increase liquidity and cash flows of the State; thereby providing fund for the State Government for the implementation of socio and economic infrastructural development programs across the state.

“To increase the tenor of the facilities; thereby reducing the monthly debt service and making more fund available for project implementation. To take advantage of the drop in the lending rate, this will confer significant savings in the cost of servicing debt.”

Governor Abiodun listed some of the loans as contained in the letter dated March 17, 2020 as including a Restructured Term Loan (FGN Bond) of N55, 405, 175, 055.11 obtained in 2015; Salary Bailout to State Government and Local Government of N9,779,580,234.86 and N9,139,628,430.00 respectively obtained in 2015

Others are Infrastructural Loan (Excess Crude Account) of N10, 000, 000, 000.00 obtained in 2015; Special Socio-economic Development Intervention Loan N20, 000,000,000.00 obtained in 2017 and Commercial Agriculture Credit Scheme of N5,000,000,000.00 obtained in 2017.”