Amosun seeks N19 billion loan, approval dicey

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Tunde Olanrewaju, Abeokuta


Ogun State Governor, Senator Ibikunle Amosun
Ogun State Governor, Senator Ibikunle Amosun

Ogun State Governor, Senator Ibikunle Amosun, has approached the state House of Assembly seeking approval for a N19 billion loan, which is expected to be used in facilitating the completion of major infrastructural projects across the state. But fears persist that lawmakers opposed to the governor could truncate the request using the absence of transparency and refusal to set up a Debt Management Office (DMO) as excuse.

 

The governor’s request through a letter, was read by the Speaker of the Ogun State House of Assembly, Hon. Suraj Ishola, at the resumed plenary session on Tuesday.  In the letter dated 3rd February, the Speaker said that the executive needed the money as a matter of urgency to facilitate the completion of all on-going infrastructural projects across the state.

It said, “Kindly refer to the Ogun State 2014 approved estimates wherein a sum of N29billion only was budgeted as capital receipt from the internal loan.

“However, the sum of N19billion only out of the amount stated in paragraph two above will be needed urgently to further the execution of the five cardinal programmes of the present administration, particularly in the area of infrastructure from the following banks:
1. First Bank of Nigeria Limited–Purpose– infrastructural project–N5billion.

2. Sterling Bank Plc–Purpose–Infrastructural Project–N10billion

3. Guarantee Trust Bank Plc for infrastructural projects–N3billion

4. Ecobank Nigeria Plc, the purpose is for short term UBEC counterpart funding–N1billion

“The approval of the Ogun State House of Assembly is hereby sought to obtain a loan of N19billion to facilitate the implementation of the 2014 budget.

“You are kindly requested to issue individual borrowing resolution as required by the banks.”

On the surface, the lawmakers opposed to the loan want Amosun to inaugurate a Debt Management Office (DMO) and also furnish them with details of Ogun State indebtedness to financial institutions since he became governor. But observers believe the subtle refusal of the legislators to consider the loan request is a continuation of the political crisis rocking the Gateway State.

 

A highly placed OGHA source, who also holds a ranking position, observed that the opposition of his colleagues to the loan request stems from the governor’s refusal to set up a DMO as contained in the Financial Instrument Law (FIL) which Amosun signed last year.

The source who spoke on the condition of anonymity said, “What we now want is that the governor should respect the provision of the Financial Instrument Law. When we passed the bill, the governor signed it the same day, just to show his commitment to the importance of that bill.

“When he brought the last budget (2014) estimate, we wanted to stop the consideration on the ground that the DMO, which would have been able to coordinate, regulate and manage the state debts, had not been set up, more than a year after the bill was passed and assented to by the governor.

“A Finance Director in the Ministry of Education was hurriedly drafted to the office they claimed was the DMO in December because of the budget. Right now, the man has been sent back to the ministry as Finance Director. That means the DMO is still in abeyance.

“No one is against borrowing, but we demand full disclosure and the fulfillment of the provisions of the law. That is the basis on which this new N15bn loan, which is lying in the Speaker’s office, will not be approved.”

 

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