Gombe govt says 53.7 bn for development not mortgaging the state
Gombe State Government says the 53.7bn loan it is applying for is not a sign of mortgaging the future of her citizens, rather would enhance development, ensure projects are brought closer to the people.
Recently, the government approached the state assembly to seek for N18.7bn FGN intervention facility with a 30-year tenure and a 2-year moratorium and N35bn Sukuk bond, totalling 53.7bn which did not go well for some groups.
Recall that a group under the aegis Gombe Good Leadership Association issued a viral statement entitled “A Call to Stop the Gombe State Borrowing Governor from Mortgaging the State.” the group accused the state government of leading the state to perpetual bankruptcy.
According to a press statement made available to journalists on Tuesday, by the commissioner for information, Julius Ishaya, he explained that loans are useful instrument so far it yields ample development.
Ishaya revealed that the state has a healthy debt profile, noting that unlike the previous administration that accessed similar loans but did not complete the supposed projects.
According to the commissioner, the government of Muhammadu Yahaya has brought viable development, which is second to none, with little resources, adding that it has successfully put the state in sound footing.
The statement partly stated, “The desire of the Muhammadu Inuwa Yahaya administration to bequeath a better and more economically viable State brought about the idea to raise the N35bn Sukuk bond. A painstaking review and evaluation of our state of finances was undertaken. This revealed a funding gap that needed to be hedged in order to enable government deliver on its mandate. Again, the time value of money and low rates of interest played major roles in taking the decision. This is aside the need to ensure the completion of abandoned projects of the past administration. At present the debt-to-revenue ratio of the state is one of the lowest in the country at about 22% far less than the 73% of the federal Government. Recall that this ratio, due to the reckless misapplication of facilities by the last administration had over shot the 20% maximum limit and made it impossible for the present administration to adequately finance its projects.
“The review of the ratio to 40% now provided the window for the state to access funding. The proposed bond proceeds will be utilized to fund Phase 1 of the Muhammadu Buhari Industrial Park, the Gombe Capital Special Development Zone, which will include a new state secretariat complex, a new state assembly complex and a new judiciary complex – a replica of the 3 arms zone in Abuja. Part of the proceeds will also be used for the expansion of the Gombe Regional Water Project for which the FGN is also making a 30% contribution in the over N7bn project. The bond is designed in a way that it will not to have any negative effect on the state throughout its term.
“Incidentally, the Federal Government in its bid to assist the sub nationals contend with the effect of repayments of the existing FGN facilities has extended a N18.7bn FGN intervention facility with a 30-year tenure and a 2-year moratorium. Recall that such interventions were earlier enjoyed by the past administration but were misappropriated as there is nothing to show for the huge sum of moneys they got including the huge Paris club refunds of about N24bn! The FGN’s window of opportunity for a transparent and accountable government such as that of Governor Muhammadu Inuwa Yahaya will greatly assist Gombe state to invest in more critical infrastructure that will stimulate growth and bring about economic prosperity.”
Ishaya noted that the immediate past administration left a burden of over N124 billion in Loans/Bonds, Pension/Gratuity arrears and contractors’ liabilities, adding that the current administration has been servicing it.
“The Muhammadu Inuwa Yahaya admin
