Kano paid only N10.7 million interest on N9 billion loan for June salary – Official

Kano State Governor, Abdullahi Ganduje
Kano State Governor, Abdullahi Ganduje

The Kano State Government has debunked the rumour that it paid N1.3 billion charges for the N9 billion overdraft it took from banks to pay state and local government workers salaries in June.

The state Commissioner of Finance, Kabiru Dandago, who made the clarification while briefing journalists in Kano on Thursday, said the state government paid only N10.7 million to the banks as charges.

“The attention of the Ministry of Finance has been drawn to some mischievous speculations being circulated through some media houses on the overdraft facility accessed from some deposit money banks in the month of June.

“The mischief makers are speculating that the monthly cost of the facility to the state government is around N1.3 billion, totalling more than N15 billion per annum,” he said.

He said the ministry on behalf of state government negotiated the interest from the normal 27 per cent to 30 per cent.

According to him, the two banks that granted the overdraft charged 14 per cent and 15 per cent respectively.

The Commissioner said the state government took the facility in its commitment to ensure that salaries and pensions are paid before June 25, to enable the workers access their salary before Eid-el-Fitr.

He said the state government paid the charges for only three days as the federal government was able to remit the state share of the Federation Account three days after collecting the facility.

“As you calculate 14 per cent of N4.5 billion times 3/365 plus 15 per cent of N4.5 billion times 3/365, the total amount payable will be N5.2 million plus N5.5 million is equal to N10.7 million.

“The need to pay salaries and pensions in good time in Kano state is worth much more than a monthly cost of a meagre N10.7 million to people of goodwill in view of the multiple economic benefits of doing that, “he said.

(NAN)


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  • Stanley

    This is why restructure is inevitable and the only way out of the pit of hell that Nigeria is heading. If you need N9 billion to pay workers in one month, how much do the workers generate to Kano State government in one month? A close scrutiny will reveal that about N1 billion of that money will go to ghost workers. This is only possible in our current system where stealing is permissible. Kano state workers are less than 2% of Kano huge population. This 2% are mostly from the family of the politicians. It means that the rest 98% are totally forgotten. An Autonomous Kano State with N9 billion loan would have reduce their unproductive workers or transfer them to where they will be more productive and earn at least N3 billion naira profit annually from the loan. If we wait until Kano borrows and waste N9 billion every month for 10 years, then debt will make their situation irredeemable. Lets put a stop to these forms of bad governance across the country. Lets restructure.