•Takes debt repayment to above N1billion monthly
According to the Supplementary Appropriation Law signed by the governor of Kwara State, AbdulRahman AbdulRazaq on the 16th of September, 2021, It revealed that the repayment amount of about N630million on the new debt item in the Law commenced in July, 2021. This consolidates the earlier position of an Article published on NationalPilot titled, ‘Truth, Lies, scandals of Gov AbdulRazaq’s N35bn bond bid’.
Recall that the acquisition of the bond generated outcries from the high and low within the state. While some analysts lamented the negative effect of the loan on the future of the state FAAC, others believe that the loan will be used to improve on the various sector of the govt that needed urgent attention.
“The first issue there is the fact that this N35 billion is going to be paid in two tranches. The first they will collect is N25 billion after which they will get N10 billion. If we add it together, it will give us N35 billion.
“The second thing is that the bond is seven years tenure repayments and it is our FAAC that will be used to pay this debt. It is our FAAC they used as surety. Our government signed ISP (Irrevocable Standing Payment Order) of N630,203,900 which will be deducted every month from our FAAC.
“On this note, we called this bond a ‘secret borrowing’. But that is the secret the AbdulRahman AbdulRazaq led government is trying to hide from the good people of Kwara state and it is our duty to let you know this,” a former member of Kwara State House of Assembly, Hon. Ayansola Mohammed was quoted to have said on a popular radio program.
Excerpts from an article by the Spokesperson of the governor, Rafiu Ajakaye, titled ‘On Kwara bond and other issues’ reads: “Indeed, Kwara got parliamentary approval to raise N35bn. However, it has only raised N27bn at the extant 15% market rate.
“A few concerns have been raised on the bond. That included the viability to pay back. Kwara is solvent and can easily payback. That is the expert conclusion of the DMO, the national statutory body that regulates lending by the national and subnational governments in Nigeria. The administration has cut waste and cannot in good conscience be accused of profligacy. It has earned itself various cognomen for ending the corrupt, unproductive patronage system of the past. Bond redemption will take seven long years, charged to the state’s monthly allocation from the federal government. Bolstered by internal revenue, the plan is such that no basic commitment of the government will be affected.”
In view of this, the Kwara State govt confirmed the acquisition of the bond, thereby budgeted the sum of N3,793,223,400 in the 2021 Supplementary Appropriation Law, and consequently, taking the debt repayment to the tune of N9.4billion in the second half (H2) of the year (2021).
This further takes the debt repayment to the sum of about an N1.2billion/monthly, from the initial N610million monthly on yearly basis.