The $500 million (about N80 billion) loan being sought by Akwa Ibom State Government would be used to be used to offset earlier loan, pursue developmental projects and save the state a whopping N25billion from UBA loan.

This explanation was contained in a letter which Governor Godswill Akpabio sent to the Akwa Ibom State House of Assembly seeking its approval to borrow the said sum from Standard Chartered Bank International, London.

In the letter with Ref No. GO/AKS/S.45/86 read to the lawmakers by the Clerk of the Assembly, Mrs. Mandu Umoren, yesterday during plenary, Akpabio said that what he is seeking is not just another loan but one to be used to offset the N50 billion loan from United Bank for Africa (UBA) in 2012 and also refinance the outstanding financial liabilities and commitments of his administration.

“I, hereby, request for your speedy consideration and approval of the house of my request to borrow $500 million dollars (about N80 billion) from the Standard Chartered Bank International.
“The proceeds of this loan facility will be utilised to offset all outstanding loan commitment of the State Government to UBA Plc. This will drastically reduce the applicable interest that government will have paid on the facility from UBA Plc which runs into billions of naira,” Akpabio wrote.

The governor disclosed that the loan from UBA attracted interest rate of 18.5 per cent per annum, while Standard Chartered Bank International loan rate is 8.19 per cent per annum.

News Express reports that the House on May 2012 in a resolution after thorough deliberation on the earlier request had approved the borrowing of N50 billion to execute ongoing infrastructure development programmes of the state government.

The Speaker, Samuel Ikon, had directed that the letter be referred to the House Committee on Appropriation and Finance, for in depth work and report back to the house as soon as possible.

The state government’s contingent liability commitment to its key contractors, according to Governor Akpabio, amounts to N30 billion bringing the total bankable liability of the state to N80 billion.

•Photo shows Governor Akpabio.