Kogi’s proposed $100m loan for capital projects, Commissioner explains
Kogi State Commissioner for Finance, Budget and Planning, Asiru Idris, has explained that the state’s request for $100 million loan is for the purpose of building capital projects.
Idris stated this when he appeared before the Senate Committee on Foreign and Local Debts to defend the $100 million request it tabled before it.
The Clifford Ordia-led committee had on Tuesday held a public hearing for states seeking loans from the World Bank, and Kogi was present to defend its $100 million request.
President Muhammadu Buhari had decided to borrow $29.96 billion to fund critical infrastructure across the country.
The Federal Government and some state governments were collaborating to request the loans from various lending institutions for which Kogi’s portion is $100 million.
In his submission, the commissioner, who represented Governor Yahaya Bello, explained that the World Bank loan request of $100 million would be repaid in the next 25 years.
According to him, the debt profile of Kogi is within the acceptable range for the state to go borrowing.
“Kogi’s debt profile as at December 31, 2019 is N123 billion. We can still borrow because we have looked at the analysis of the loan, and the very important factor to borrowing money from the World Bank is that the repayment/deduction must not be more than 40 per cent of the allocation for the preceding twelve months.
“Checks on our debt profile deduction is 28 per cent against the threshold of 40 per cent. It also shows that your total liability should not exceed 250 per cent of the total amount of loan you are seeking,” he said.
The state, he added, has calculated and what it submitted is 128 per cent.
Idris said there was no cause for alarm over the intended loan as the state was buoyant enough to sustain its present and expected debts.
“The $100 million, when accessed, will be used to build roads, electricity and other social amenities within the Alape Crop Processing Zone.
“This will in turn make the place and the state accessible to investors to come in and do agriculture businesses; a development that will generate income and employment for the state.
“We are not borrowing for consumption; we are borrowing to build capital projects. This is in line with the state governor’s fight against insecurity, because if you there is no food security, then any fight against insecurity will be a mirage.”
He said all ministries had also been mandated to look inwards and contribute to the economic development of the state in line with the fiscal discipline directive of the governor’s agenda.
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