Date: 2008-11-03

Kwara State Governor, Dr Bukola Saraki on Wednesday assented to the Debt Issuance Bill 2008, which seeks to raise N30 Billion Naira bond from the Capital Market to finance huge capital projects.  

The security bond, which had earlier been passed by the State House of Assembly, is to enable the State Government finance a number of developmental projects that will impact positively on the socio-economic lives of Kwarans at a relatively cheap cost.  

Speaking at the Ceremony, Dr Saraki said with the signing of the bill into law, Kwara State becomes the first State in the country to subject its accounts and records procedures to scrutiny by Fitch Rating Agency, giving the State a clean bill in financial management.  

The Fitch Rating, he disclosed, attracted wide commendations from individuals, corporate organizations and government agencies including the Central Bank of Nigeria (CBN).  

Governor Saraki explained that the State Government has projected that the repayment of the loan, which would spread over five years, would come from the Internally Generated Revenue (IGR), adding that it would not impact on the Federal Allocation to the State.  

"The projects which we have identified under this Bond are economic projects that will further assist to reduce poverty, create jobs and improve economic environment in the State", the governor said.  

Among such projects, he listed, are the Truck Plaza, Aviation College, Kwara State University Project, expansion of Irrigation System across the State, Commercial Agriculture Phase II, expansion of Water Project and reticulation of water pipes across the State and Vocational Centres.  

He disclosed further that the law would also provide for the establishment of a Debt Management Office (DMO), which would among others; ensure maintenance of reliable data, preparation and submission to State on forecast of loan service and servicing domestic debts taken by local government councils.  

Dr Saraki, however, cautioned the council chairmen to ensure that all loans obtained follow due process in line with what the State Government is doing, warning that taking loans without following normal procedure is a serious offence.  

Saraki, who assured that government, will leave no stone unturned towards attaining a well structured socio-economic transformation of the State, expressed appreciation to the legislators for the quick passage of the bill.  

Also speaking, the Deputy Speaker of the State House of Assembly, Alhaji Babatunde Mohammed described the occasion as another milestone in the history of the State.  

Alhaji Mohammed, who restated the commitment of the House to passing bills that would impact positively on the people, commended the State Government for the co-ordinated attempt to manage its debt portfolios prudently through the establishment of a Debt Management Office.  

He also called on Kwarans to join hands with Dr Saraki in his efforts to industrialise the State.  

Earlier in his remarks, the State Commissioner for Finance and Economic Development, Alhaji AbdulFatah Ahmed explained that in any development that government intends to undertake, two sources of funding are required.  

The sources, the Commissioner said could either be through savings or borrowing from Commercial Banks, which he regarded as being expensive owing to the high interest rates charged.  

Ahmed attributed the desire of the State Government to source funds through the Capital market to its good financial rating and possession of the ability to repay any loan raised within the stipulated period.  

An institutional framework to manage the debt portfolios of the State Government, he said, has already been put in place to ensure probity and accountability.  

Mas’ud Adebimpe 
Chief Press Secretary to the Kwara State Governor
November 03, 2008