From Yakubu Mustapha, Minna
The Niger state House of Assembly has given the approval of the state Governor, Alhaji Abubakar Sani Bello to restructure a revolving N3.5 billion overdraft into a 36 months term loan.
The Legislators who were responding to the letter written to the Assembly by the Governor acknowledged that the COVID-19 pandemic has affected the revenue inflows of the state.
Governor Bello’s in a letter to the lawmakers titled, “Restructuring of Existing N3.5 billion Revolving
Overdraft into 36-Month Term Loan”, the governor explained that the state had to borrow short-term funds totaling N3.5billion in times of urgent needs.
The letter added that the borrowings were predicted on projections that the quantum of inflows from FAAC would be enough to off-set the resultant debit position of the State’s FAAC account with Zenith Bank Plc stating that the downturn in the volume of receipts from FAAC has meant that over the last eight months, the account has not received inflows as anticipated and the debit position has remained around N3.5 billion.
“Rather than continue to hold the debit position along with the attendant cost, Government approached Zenith Bank Plc. with a proposal for the debt to be restructured into a 40-month term loan at 14 per cent per annum to enable us cleanup and put the state on a more sustainable financial position.
According to the letter, “After series of negotiation, Zenith Bank communicated an offer of a 36-month term loan at an interest rate of 17 per cent per annum, on a reducing balance basis), which is Competitive in terms of the market.
“We note that in the current challenging atmosphere of economic recession, government will have to continuously review its portfolio of assets and liabilities for prudent management as well as ensuring that it meets its obligation to workers in the State as well as other financial commitments of governance and capital investments”, the letter read.
The letter further stated that a Resolution of the House of Assembly in support of the facility is needed as part of conditions for the conversion of the overdraft required while seeking the consent of the Assembly to get the facility.”
Reading the letter was read during plenary yesterday in Minna, the member representing Agwara constituency, Honorable Bello Ahmed Agwara noted that the government is facing serious financial problems and the resources are not longer much after the payment of salaries to take care of other needs in the state.