Ogun Assembly Gives Abiodun Nod To Restructure N109.3bn Debt Burden Left By Amosun - THE DAILY CRUCIBLE



Tuesday, March 24, 2020

Ogun Assembly Gives Abiodun Nod To Restructure N109.3bn Debt Burden Left By Amosun

-  The Daily Crucible
Ogun State House of Assembly has granted approval to Governor Dapo Abiodun's request to restructure and refinance the various loans in the debt stock of the State bequeathed to him by his predecessor, Senator Ibikunle Amosun.

A key figure at the Ogun Assembly told The Daily Crucible that the cost of servicing the debt was so overwhelming that the present administration won't be able make any tangible headway if  sustained -  (the monthly interest rate) 

The source added that given  the dwindling monthly federal allocation, after debt servicing obligations are met, there is almost practically nothing left to run the government business, hence the approval.

The Assembly source said the approval will enable the current administration to negotiate for soft and longer payment terms with reduced interest rate and thus, free more fund from federal allocation to take care of the pressing needs of the good people of Ogun State. 

The debt burden which is weighing heavily on the present administration's ability to meet its obligations as well as fund projects, is put at about N109.3bn and resulted from series of loan facilities obained by Sentor Ibikunle Amosun's administration between 2015 and 2017.

Amosun had in the early stage of his first term in office while criticising his immediate predecessor, Otunba Gbenga Daniel, for allegedly leaving a huge debt behind, pledged to pay within the lifespan of his administration any loan facility obtained.

However, with the revelations coming from Abiodun's correspondence to the state lawmakers, it appears that Amosun did not only leave more debt burden to his successor than he inheited from predecessor, but also never cleared it or paid them off before he left office as promised earlier in his first term.   

The debt facilities according to the Governor's correspondence dated 17th March 2020 and acknowledged by Speaker Olakunle Oluomo before the lawmakers included: "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".

The approval of the Restructured Term loans followed a motion moved by the Majority Leader, Hon. Yusuf Sheriff, seconded by a member representing Ijebu Ode State Constituency, Hon.Kemi Oduwole and supported by the Whole House through a voice vote.

Contributing to the debate leading to the passage of the motion, members including Sheriff, Honourables Ganiyu Oyedeji, Bashir Oladunjoye, Solomon Osho, Akeem Balogun and Adegoke Adeyanju, explained that the approval of the request became imparative in order to meet the short fall in the price of crude oil per barrel at the international market, which had impacted negatively on the global economy, thereby resulting in revenue downturn to Governments at all levels in the nation.

Others lawmakers including Yusuf Adejojo, Kemi Oduwole, Adeyemi Ademuyiwa and the Deputy Speaker, Oludare Kadiri added that the approval would assist to the tenor of the facilities to enable it embark on more infrastructural programmes as encapsulated in her cardinal programmes and meet other financial obligations to the citizenry.

The letter, as earlier read by the Speaker 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
In another development, Speaker Oluomo has directed the State Commissioner for Forestry, Mr. Tunji Akinosi to appear before the State House of Assembly's Committee on Justice, Ethics and Public Petitions, on Monday, 30th March, 2020 at 10:00am.

 Additional report : OGHA press office

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