The Governor of Delta
State, Senator Dr. Ifeanyi Okowa has commenced moves to pull the State out from its current abysmal N636 billion indebtedness in the face
of the country’s economic recession.
Governor Okowa
gave a breakdown and the true picture of the State indebtedness to the members of
the Delta State House of Assembly in his State- of – the- State address to the House
and people of Delta State.
Governor Okowa
told the capacity crowd at the hallowed chambers’ that he has directed the State’s
ministry of Finance and the Accountant- General to restructure the irrevocable
standing payment order (ISPO) on contractor’s guarantee and overdraft facility
over a period of 42 months.
Governor Okowa equally
directed that necessary machinery be put in place to boost the State’s
Internally Generated Revenue (IGR), while steps will urgently be taken to plug
loopholes in revenue collection.
According to the
Governor, “shortly after I was sworn in, I caused to be issued the suspension of
recruitment by the State Civil Service Commission made after 31 December, 2013
to date”.
“Payment of 20 %
cost of collection (CoC) of internally generated revenue (IGR) and consultancy
contracts entered into by the Board of Internal Revenue and approvals for
deduction of IGR collections by MDAs pending their review; all contracts
approvals or commitments entered into for and on behalf of the State government
from 1st April, 2015 or any contract tied to the 2015 budget”.
Giving a
breakdown of the State indebtedness, Governor Okowa hinted that “Federal
allocation has dipped significantly, dropping to just N8.03billion, as received
in May 2015, from a high of over N20 billion in previous years”
He said the “State
is currently grappling with a revenue bond and indebtedness to commercial banks
totally N98.62 billion (principal sum), while outstanding contractual
obligation is N538, 601,962,421.50.”
Okowa revealed
that “in 2011, the State government took a N50billion facility from the bond
market , with a repayment period of seven years in 84 installments at
N1.098billion each month”, adding that “ this facility will terminate in
September 2018 with 40 more installments(totally N43.92 billion) to pay with
effect from June 2015.”
Okowa revealed
that in November 2014, “Delta State also acted as guarantor to some selected
contractors supported by the issuance of an Irrevocable Standing Payment Order
(ISPO) of N2.23 billion monthly, for which the contractors received the total
sum of N40billion”.
He explained that
“the State now has paid four installments and has 20 more monthly installments
totaling N44.60 billion (including interest payments) extending through year
2017 to pay”, adding that “we also have N19billion and another N715 million
overdraft facility outstanding with Zenith Bank Plc, while some other smaller
loans and overdraft facility totaling about N2billion with other banks have to
be paid”.
He further
lamented that “as it stands today, a total monthly deduction of N4.60 billion
will be made from our FAAC receipts with effect from this June through to March
2017, and thereafter N1.098 billion monthly until September 2018, saying that
this leaves us with a balance of N3.4billion assuming the FAAC allocation stays
at N8.03 billion”.
Currently,
Senator Okowa pointed out that “the receipt from internally generated revenue
(IGR) is about N2.0 billion monthly, after deducting cost of collection, adding
that “the implication of the above scenario is that the funds available to run
the State is N5.40 billion monthly in the next two years, except there is a
significant rise in oil receipts and FAAC earning including IGR”
Senator Okowa
stated that “unfortunately, the available funds of N5.4 billion is insufficient
to offset our monthly wage bill, let alone fund overhead coast or for
government to embark on capital projects.
He said the State
workforce as at May 28, 2015 stood at over 60, 000 persons with a monthly
personnel cost of N7, 437,940,015.38 inclusive of the N678 million State
government supports to local government councils for the payment of primary
school teacher’s salary.
He therefore
called for synergy between the executive and the legislature, including sacrifice
from all Deltans in his attempt to pull the State out from the economic woods.
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