Amosun promises to repay bailout funds within 10 years
OGUN State governor, Senator Ibikunle Amosun, has disclosed his administration’s plan to reduce the repayment period of the bailout funds approved for the state by the Federal Government from 20 years to 10 years.
The governor said his administration had already set machinery in motion to repay the bailout funds within the next 10 years. The governor spoke in Abeokuta when he met workers under the aegis of Nigeria Labour Congress (NLC) and Trade Union Congress (TUC).
The workers had, last week, staged a rally for “Good governance in Nigeria”, pledging their support for President Muhammadu Buhari’s anti-graft war.
The Federal Government, through the Central Bank of Nigeria (CBN), in July approved a restructuring of existing bank loans owed by state governments from a short-term repayment period of about seven years to 20 years as part of the bailout for financially depressed states.
Bank loans acquired for salary arrears, according to the apex bank, would also be extended to a minimum of 15 but not more than 20 years. But Amosun, who said he did not want his successor to inherit such a huge debt, declared that he would save about N80 billion for the state with the option taken by his government. He disclosed that the state’s debt currently stands at N55 billion.
The governor assured workers in the state that salaries and outstanding deductions would be paid as soon as the bailout funds are accessed by the state government.
He, however, charged them to work hard towards increasing the revenue base of the state, stressing that if the state could generate N250 million monthly as Internally Generated Revenue (IGR), it would no longer have difficulty in paying wages.
He said, “The bailout they (FG) are talking about and the money that they said they’ve restructured, if we are going to pay it for 20 years, you know how much we will pay back? We will pay about N160 billion back in 20 years time. “All that we have collected now is the N9.7 billion for the state and the N9.1 billion for the local governments.
Now the N55 billion that is being speculated, the loan that I collected (from banks) since I became the governor is about N39 billion. The outstanding that we paid from my predecessor is about N16 billion.
When you add the two together, it’s N55 billion. “And for us in Ogun State, I have said I don’t want to subject Ogun State to that debt for that 20 years; so we said they should reduce it to 10 years.
The savings we are going to make for Ogun State is N80 billion for opting to pay it for 10 years. “Even I pray to God that between now and when I would leave office, we would have probably settled the debt so that people coming after us, they will come and meet a clean slate.
So, when people hear this bailout, it means that those states, for the next 20 years, it is the debt that they would be paying. “Yes, we may have this temporary discomfort, but within the few months, if everybody works together, we’ll make our money. If Ogun State everyday makes about N250million, we are okay.
That is the target.” Amosun said his administration was the first to introduce Treasury Single Account (TSA) in 2011, adding that he closed over 200 government accounts in various banks as a result. He commended the civil servants for their cooperation with his administration and solicited their continuous unflinching cooperation.