Delta Assembly approves Okowa’s request for N30bn bailout

Posted by Osteen Oyibode, Asaba | 10 September 2015 | 3,934 times

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Delta State House of Assembly has approved the request by Governor Ifeanyi Okowa to apply for bailout loans from the federal government through the Central Bank of Nigeria (CBN) to defray the outstanding salaries for public servants in the state and fund capital projects.

Our correspondent reports that the approval for the bailout, totaling about 30 billion naira, came after the consideration of the request on its merits on the floor of the house in a debate led by the majority leader, Hon Tim Owhefere, during plenary, presided over by the Speaker, Hon Monday Igbuya.

Governor Okowa in the letter to the state house of assembly informed the house that presently the state government is saddled with a backlog of outstanding salaries due to its employees as well as pension commitments to the tune of over fifty billion naira.

He attributed the development to continuous decline in her revenue from the Federation Account Allocation Committee (FAAC) occasioned by the dwindling oil prices.

The governor disclosed that as part of the federal government's bailout program for the states of the federation, the CBN advised the states to submit data on outstanding debts profile to commercial banks and salaries obligation to public servants.

Dr Okowa stated that the CBN also indicated its readiness to provide a loan of 10 billion naira at a concessionary interest of 9% per annum to all state governments to aid their funding of capital projects, aside the loan to pay up backlog of salaries and pension commitments.

He told the house that it has become necessary to accept the kind offer of the federal government in form of bailout loans totaling twenty billion, Nine hundred and thirty six million, seven hundred and ninety nine naira.

The governor said the sum is made up of ten billion, nine hundred and thirty six million naira for the settlement of outstanding salaries and ten billion naira for funding of capital projects.

Dr. Okowa disclosed that the request to approach the federal government for the bailout loan was approved by the state executive council at its fifteen meeting of September 1st 2015, a copy of the extract attached to the application to the house.

He noted that the approval of the state legislature is a mandatory requirement to the conclusion of the loan transaction and appealed to the house to by way of resolution approve the request to enable him apply for the loans.

The majority leader, Hon Tim Owhefere, while leading debate on the merits of the loans, said that was need for speedy approval of the request by the house to enable the state government apply for the bailout funds by the federal govt.

Hon Owhefere stated that the loans have become imperative due to the realities of the time, maintaining that over 80% of states across the country can no longer pay the salaries of its workforce.

He said for the federal government to come up with the bailout option was a welcome development, stressing the need to allow Delta state key into the program to the benefit of the people.

The debate was unanimous as no member spoke against it, leading to the motion by the majority leader, Tim Owhefere for the approval of the request by the governor for the bailout loans.

•Photo shows Speaker Igbuya.

Source: News Express

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