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Published On: Wed, Apr 17th, 2019

Edo govt allays fear over $276.25m foreign debt

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By Osaigbovo Iguobaro, Benin

Edo State Government has allayed fears over its foreign debt portfolio of $276.25m recently released by the Debt Management office (DMO).
The amount represents 6.53 per cent of the sub-national foreign debt of $2.12bn, according to DMO data owed by the 36 States of the federation and the Federal Capital Territory Administration as of December 31, 2018.
Edo State occupies the second position in the chat which Lagos is on top of the list with a foreign debt portfolio of $1.43bn which represents 33.81 per cent of the debt.
The DMO analysis also revealed that Kaduna emerged third while Cross River State came behind the rear as 4th in that category.
Besides, Edo State government currently service the debt with over N502 million monthly.
In a statement on Tuesday, the Special Adviser to Edo State Governor on Media and Communication Strategy, Mr. Crusoe Osagie, said the State enjoys, were accessed as a result of transparent and prudent financial management.
He admitted that Edo State topped the list of sub-nationals with high external debts after Lagos State.
He also said the State government prioritises sustainable development and judicious use of state funds, which is what has enabled it to promptly access the low-interest credit from multilateral organisations.
Osagie argued that it was erroneous to assume that foreign credits are bad, noting that they help to fast-track development at the lowest cost of funds possible.
According to him, “Foreign credits usually come with single, lower digit interest rates, ranging from one to five per cent.
“They carry many years of moratorium, that is, a period within the tenure of the loan when the borrower is not required to make repayment.
“This gives the borrower more time to bring development to the people and therefore increase the capacity to repay the loan.
He said, “contrary to opinion by less informed people that ranking as the second state in the country after Lagos with the highest foreign debts portfolio is a negative feat”.
The Governors aide explained further that “it is actually a positive development because this simply indicates that Edo State, like Lagos and Kaduna States, are the few States in the Country with the requisite level of transparency in governance to access the huge international pool of development financing to help improve infrastructure and enhance the living standards of the ordinary people.”

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