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October 9, 2023
The Assembly, which is dominated by the Labour Party, also expressed delight that the loan would run its full course in the first tenure of the Governor.
The Enugu State House of Assembly on Monday approved the request of the Governor Peter Mbah administration to source for a N170 billion facility to fund capital projects, among others, in the state.
The lawmakers unanimously approved the request on Monday, saying that it would enable the government deliver on its mandate, especially in the provision of critical infrastructure needed to attract investments to the state.
The Assembly, which is dominated by the Labour Party, also expressed delight that the loan would run its full course in the first tenure of the Governor.
According to a draft of the loan request N100 billion is for bank guarantee line while N10 billion is for term loan, N10 billion is for overdraft facility, and N50 billion credit facility.
A letter signed by the Secretary to the State Government, Prof. Chidiebere Onyia, and addressed to the Speaker, Hon Uchenna Ugwu, disclosed that the request was sequel to the approval of the Enugu State Executive Council of the offer of N100 billion bank guarantee line, N10 billion term loan and N10 billion over draft facility from Fidelity Bank and N50 billion credit facility from Globus Bank.
The N100 billion bank facility will guarantee payment for contracts issued to approved contractors.
The loan will be repaid via Irrevocable Standing Payment Order (ISPO) on consolidated Enugu State IGR accounts, which would be domiciled in Fidelity Bank and domiciliation of JAAC/FAAC/Infrastructure Support.
The N10 billion term loan is on a tenure of 48 months, and a monthly repayment via ISPO on consolidated Enugu State IGR accounts, which will be domiciled in Fidelity Bank and domiciliation of JAAC/FAAC/Infrastructure Support. It will be used for infrastructural development.
The N10 billion overdraft facility will be used for prompt payment of recurrent expenditures such as salaries and has a tenure of 12 months with monthly clean up and repayment via ISPO on consolidated Enugu State IGR accounts, which will be domiciled in Fidelity Bank and domiciliation of JAAC/FAAC/Infrastructure Support.
The N50 billion credit facility is for the refinancing of the outstanding receivables from Enugu State Government and the repayment plan is 42 months equal and consecutive monthly repayment of principal and interest, which will be debited from Enugu State FAAC account with Globus Bank PLC.
According to the National Bureau of Statistics (NBS) data released in February 2023, Enugu State is ranked as the 7th most indebted state in the federation with a total of $123.02 million (N167 billion) of external debts.
SaharaReporters earlier reported that despite its debt burden, Enugu State under Governor Mbah is seeking the approval of the State House of Assembly to raise the sum of N170 billion in loans.
It had been reported that if request was granted, it will raise the total debt burden of the state to over N300 billion.