Okowa clears air on N10bn loan

By Barry Agbanigbi, Asaba
Obviously reacting to the spate of criticisms prompted by the state’s level of indebtedness, the Delta State Governor, Senator Ifeanyi Okowa said the proposed N10 billion loan was to rescue the state from
total collapse.
With a bloating 60,000 workforce and a monthly deficit of about N2billion the state had to result to loan seeking as an option.

 
According to the state governor, Dr. Okowa, the fund available to run the state after deductions from all loan facilities is N5.4 billion monthly which he said would continue, except there is a significant rise in oil receipt from Federal Allocation and Internally Generated Revenue.
Okowa, who disclosed this yesterday in a parley with the newly inaugurated members of the state House of Assembly, said that the sum of N7.43billion is being spent on salaries, including N678m support to local government councils for the payment of teachers’ salaries.
The receipt of Internally Generated Revenue (IGR), he said amounted to N2billion monthly after deductions from collection. He said the federal government allocation had dipped significantly to N8.03billion as at April from N20billion in previous years.
The governor said the state is grappling with revenue bond and indebtedness to commercial banks totaling N98.62billion, while outstanding contractor obligations stood at N538.601billion.

 
He explained that the state government in 2011 took N50billion facility from bond market with a repayment period of seven years in 84 installments at N1.098billion each month. The facility, he opined,
will terminate in September 2018 with 40 more installations totaling N43.92billion to pay.
Other debts, he went on, included the state acting as guarantor to some selected contractors supported by issuance of irrevocable standing payment order of N2.23billion monthly for which the
contractor received the sum of N40billion; Zenith Bank draft of N19billion and N715million as well as N2billion with other banks.
“As it is today, a total of monthly deductions of N4.60billion will be made from our FAAC receipt with effect from June through March 2017, and thereafter N1.098billion monthly until September 2018.
“This leaves us with a balance of N3.4billion assuming FAAC allocation stays at N8.03billion.”
Okowa said the 2015 budget of N409billion as earlier passed by the House was no longer realistic in the wake of the current realities and as such has to be reviewed.
He said he went into details to explain the state of finances to put the legislature on the same page with the executive “so that we can think together, plan together, and tighten our belts.