Senate Okays Ogun’s $350m W’Bank Loan Request

• Senate Okays Ogun’s $350m W’Bank Loan Request

The Senate on Thursday approved the move by the Ogun State Government to obtain a $350m loan from the World Bank.

The upper chamber of the National Assembly also approved the 2018 budget of the Federal Capital Territory with a total estimate of N222,360,551,512.

The approval of Ogun State’s loan request followed the adoption of the report by the Senate Committee on Local and Foreign Debts at the plenary on Thursday.

The committee, which is chaired by Senator Shehu Sani (Kaduna-Central), said in the report that the loan had been captured in the 2016-2018 Medium-Term Expenditure Framework and Fiscal Strategy Paper and the 2016-2018 External Borrowing (Rolling) Plan of the Federal Government.

The report read in part, “Based on the submissions and interactions with some of the invited government officials, the committee observed as follows:

“That the Ogun State Development Policy Operation (Budget Support) for $350m was approved by the World Bank in 2016 and was captured in the 2016-2018 borrowing plan as approved by the National Assembly.

“That the credit facility has an attractive low-financing data of 1.25 per cent interest; moratorium of five years and a 25-year maturity tenor; that the facility is already captured in the 2016-2018 Medium-Term Expenditure Framework; that Ogun State has a low and acceptable debt sustainability level, and therefore is eligible to borrow.

“That the Development Policy Operation Loan is basically used to finance deficit in the state’s annual budget, thereby enhancing the capacity of the state government to execute its key projects; that the Ogun State Government has met the various conditions by the World Bank to qualify for the loan.

“That the Ogun State Government has put in place institution’s framework for transparent and accountable budgetary and financial process; that the various projects to be funded from the facility will engender economic growth and increase revenue generation capacity of the state and create employment opportunities.

“That the Ogun State Government has shown a high degree of prudence in implementing her annual budget.”

The panel, therefore, recommended that “the Senate do approve the Ogun State Development Policy Operation in the sum of $350m as contained in the 2016-2018 External Borrowing (Rolling) Plan of Mr. President, Commander-in-Chief of the Armed Forces.”

The recommendation was unanimously approved by the lawmakers.

For the FCT budget, the Senate approved the sum of N129.3bn for capital expenditure and N93bn for recurrent. The personnel cost is N52.5bn, while the overheads is N40.4bn.