Kogi State government has explained why it is seeking the approval of the Senate for additional $100 million foreign loan.
Commissioner for Finance, Budget and Economic Planning, Asiwaju Idris told journalists on Wednesday in Lokoja, the state capital, that the loan will be used to fast track the social economic development of the state.
Idris who disclosed this stated this while briefing newsmen after the State Executive Council meeting, said there should be no worries over the loan as the state was buoyant enough to sustain its present and expected debts.
The Commissioner said the state has already paid a visit to the Senate to defend its need for the $100 million which when released will be channeled towards developing the Staple Crop Processing Zone, SCPZ in Alape, Kabba Bunu area of the state.
According to him, when accessed, the loan will be used to build roads, construct electricity and other social amenities within the Alape Crop Processing Zone.
“This will in turn make the place and the state accessible to investors to come in and do agricultural businesses; a development that will generate income and employments for the state”, he stressed.
He added: “The fiscal sustainability of the state gives room for borrowing. If the state debt has not gone beyond 250 percent of his income then, it can still borrow. Kogi is presently on 147 percent.”
Idris pointed out that “a state that is not using more than 40 percent of his Internally Generated Revenue, (IGR), to service loan can still borrow. Kogi is presently using only 28 percent of its IGR to service loan. We still have a difference of 12 percent to borrow.
“We are not borrowing for consumption. We are borrowing to build capital projects. This is in line with the state governor’s fight against insecurity. Because if you don’t provide food security then any fight against insecurity will be a mirage.”
The Finance Commissioner also said the state government at the Executive meeting approved the creation of a new Department of International Cooperation to coordinate funds from World Bank, and other donor agencies.
He said all ministries have also been mandated to look inward and contribute to the economic development of the state in line with the fiscal discipline directive of the governor’s agenda.
Also speaking, the state Commissioner for Information, Kingsley Fanwo said the state government has directed the security apparatus to put all necessary measures in place to ensure security of lives and property.
He said the governor’s directive was as a result of the recent crisis in Aku village of Ankpa local government that led to the death of three and burning of many houses over chieftaincy tussles.
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