The Ogun House of Assembly, on Thursday gave approval to Governor Ibikunle Amosun’s request to access N65.7 billion loan for development projects.
Adeyinka Mafe, the Majority Leader, moved the motion for the approval of the loan facility, while it was seconded by Razak Oduntan.
The News Agency of Nigeria reports that the governor had on Tuesday wrote to the House seeking its approval to access a N65.7 billion loan facility from domestic and foreign banks for development projects.
Opening the debate on the governor’s request, Mr. Mafe explained that the said amount was provided for as capital receipt in the 2017 budget approved by the House.
The majority leader said that if government could get the loan, it would be beneficial to the people of the state.
Mr. Mafe said that the money was provided for in the budget as income, apart from the Federal Allocation and the Internally Generated Revenue (IGR) of the state.
He said that the Assembly provided the capital receipt that the government could borrow up to, but not above N65.7 billion.
Mr. Mafe said that it was very strategic for the government to get the approval, so that it could start sourcing for the loan.
“And the request says the payment period is about 10 years, which is good for the state.
“It is also important to know that the request is coming in and it’s making a specific request for a single digit interest rate, which is not very common in the open market now.
“We know the commercial rate for loans nowadays, which is between 23 per cent and 29 per cent, the single digit loan will be good for the people of Ogun.
“The reason why this is coming now is that we have a law that the executive has to come to us to get this approval,” he said.
Olusola Bankole, the Chairman, House Committee on Finance and Appropriation, said that it was important for the house of assembly to give approval to the government to access the loan.
Mr. Bankole stated that there was need to take an urgent step to ensure that the budget of 2017 was realistic.
“Approving the loan facility will ensure that all the projects embarked upon by the government will be completed at the stipulated time.
“We are not putting the state in any financial mess, we have looked at it critically, if we can give the opportunity to the government, it will ensure that all projects are completed,” he said.
Olawale Alausa, the Minority Leader, submitted that the House should be intimated on the list of the projects that the loan facility was targeted at.
“My concern about this approval will be that if we have a list of the projects that this loan facility is targeted at, we will be able to monitor.
Olakunle Oluomo, the Deputy Speaker, said that in the course of 2017 budget presentation, most of the projects that the loan would take care of had been highlighted.
“The money will not be given to the governor directly, those offering the loans will finance the projects directly and we pray that we are able to get the loan,” he added.