19th June, 2016
Abiodun Onafuye/Abeokuta
Governor Ibikunle Amosun of Ogun State has written to the House of Assembly seeking approval to access the N14.16 billion loan from the planned federal government’s budget support facility.
The latest bailout funds for insolvent states promise single digit interest rate and a repayment lifespan of 10 years.
Speaker of the State Assembly, Suraju Ishola Adekunbi disclosed this during plenary.
The Speaker, who read the governor’s letter indicating the state government’s proposal to access the loan facility, said Amosun is seeking their approval for the amount not exceeding N15.5 billion.
The governor, in the letter dated June 14, gave the need to navigate the current economic downturn as well as meet the state’s obligations, especially, payment of workers, pensioners and other stakeholders, as reasons for the proposal to access the fund.
“I have extensively considered the suitability of the programme to Ogun. The Federal Allocation to the state has adversely reduced due to the global fall in oil price.
“The tenor of the facility is 10 years with single digit interest rate, which will confer significant savings in the cost of funds to Ogun government.
“Authorise the executive to do all such other things as may be required to ensure the successful execution and completion of the Note Issue.
“Authorise monthly deductions from monthly statutory allocations accruing to the state from the Federation Account as may be required to service the loan”, the letter reads in part.