President Muhammadu Buhari on Tuesday sent a letter to the Senate seeking approval for the release of the sum of N10Bn for payment of federal projects executed by Kogi State government.
Buhari said his request was based on the resolution passed by the eighth Senate.This request is coming a few weeks to the Kogi state governorship election.
KOGI STATE DEBT PROFILE
According to the Debt Management Office(DMO), Kogi State’s domestic debt profile rose from N10,304,743,606.40 on December 31, 2014 to N84,922,376,449.78 as at 31st December 2018, making the state one of the nation’s most indebted.
WHY DOES KOGI STATE DROWN IN DEBT?
It has become alarming how Kogi State continuously seems to drown in debt despite bailout funds from the Federal Government.
As reported by Premium Times, Kogi State has tolled the path of borrowing from commercial banks for the payment of salaries and overhead expenditures.
Though the report on the state’s expenditure cannot be ascertained, it remains questionable how the N50 billion gotten from the bailout funds and the N30 billion from commercial banks were utilised, coupled with the billions of debts being owed state contractors, civil servants, teachers, and pensioners.
The staggering debts of the state kept mounting with non-payment of workers’ salaries, even though in December 2017, the second tranche of the Paris Club refunds and N10 billion bank loans were able to clear up to four months of salary liability.
In the face of these staggering debts, the state government continued to serve bank debts purportedly borrowed to offset civil servant salaries, whereby it has issued an Irrevocable Standing Payment Order to Zenith Bank for the deduction of the principal and interest indicated an N3.5 billion loan secured from Fidelity Bank.
However, the state government tied the repayment of the loan within three years to the expected inflow of funds from the Paris Club refund of N21.2 billion; refund of N14 billion capital projects executed on behalf of the Federal Government, and expected N30 billion revenue from the implementation of a GIS project.
Revenues to the tune of N75 billion are also being expected from the sales of Kogi State Liaison Office in Lagos, Kogi House in Abuja, and Kogi International Market, among others. The government said that inflow would be used to liquidate the loan.
According to the Chairman of the Kogi State chapter of the Nigerian Labour Congress (NLC), Onu Edoka, he said that workers are being kept in the dark concerning the disbursement of the loans and it is difficult to determine whether the loans were being used to offset the workers’ salaries as the government claimed.
“I cannot categorically say that the State Government took loans to pay salaries because I was not in the picture of any loan they took to pay salaries, and government has not told us categorically that it took loans to pay so and so category of arrears of salaries,” Edoka said.
The Labour representatives wonder the reason why the government would continue borrowing when nobody could ascertain the utilisation.
This report has allegedly put Kogi state government in perpetual debt exposure while still owing the workers’ salaries for over 30 months and counting.