Again, Enugu Assembly Approves N15. Billion Loan for Governor Ugwuanyi

Posted by African Examiner Latest Headlines, News Across Nigeria, News From The State, Uncategorized Thursday, June 16th, 2016

By IGNATIUS OKPARA

Enugu, Nigeria, (African Examiner) – Enugu State House of Assembly has passed an executive bill authorising the State Government to raise internal loans of about N15 billion from the Capital Market through the Issuance of Securities in the form of Registered Bonds.

The loan, will be for Specific Developmental Projects, as authorised by the State Executive Council.

Such Projects include urban and rural roads, completion of the new Secretariat Complex and Completion of the Medical Diagnostic Centre among others.

The law (Act) empowering the state governor, Ifeanyi Ugwuanyi, to raise the loan went through the second and third reading before it was passed after a debate on the merit of the bond by the House members.

Before the passage of the law, the House had earlier passed a resolution on a motion brought before it by the member representing Udenu Constituency and who is also the leader of the House, Hon. Ikechukwu Ezeugwu and 22 others.

AFRICAN EXAMINER recalled that this is coming barely two months after the House also approved a 30 billion naira bond for the state government.

The House had in April this year approved that the state Ministry of Finance should register a N15 billion bond through the United Bank of Africa, UBA, with a 3-years profit plan at the Capital Market and another N15 billion, bridging finance facility with a 12 percent interest in a repayment plan of 7 years making a total of N30 billion.

Speaking on the merits of the motion, Ezeugwu explained that the motion was in line with President Buhari’s approval of the establishment of a Federally Guaranteed, Conditional Budget Support Facility, BSF.

He said: “Whereas I am pleased to inform you that His Excellency President Muhammadu Buhari has approved the establishment of a Federally Guaranteed, Conditional Budget Support Facility.

“This will provide financial support to states and better position them to navigate the present economic challenges and meet their obligations to staff, pensioners and other stakeholders,” Ezeugwu stated.

He stressed that the bond will be obtained in three tranches of N1.39 billion for three months followed by N1.11 billion for nine months.

The House authorised that its payment would be by deductions from the monthly statutory federal allocations accruing to the state.

“That the House of Assembly hereby authorises monthly deductions from the monthly statutory allocations accruing to the state from the Federation Account into an account(s) established for the purposes of servicing the state’s debt obligations under the Note Issue.

“The Sinking Fund or any other account as may be designated by the subscriber to cover interest payments and principal repayments of the Note and payment of agreed transaction costs and expenses due from the state,” the resolution states in part.