Economic Recession: Okowa Moves to Pull Delta out of N636Bn Indebtedness


June 26, (Blank NEWS Online) – 

Delta State governor, Senator Dr. Ifeanyi Okowa has commenced moves to pull the state government out from its current abysmal   N636 billion indebtedness in the face of the country’s economic recession.  

Governor of Delta State, Senator Ifeanyi Okowa, giving his Speech with him, Rt. Hon. Monday Igboya, Speaker, Delta State House of Assembly, during the briefing to Delta State House of Assembly, on Financial Status of the State, by the Governor.

Governor of Delta State, Senator Ifeanyi Okowa, giving his Speech with him, Rt. Hon. Monday Igboya, Speaker, Delta State House of Assembly, during the briefing to Delta State House of Assembly, on Financial Status of the State, by the Governor.

Governor Okowa on Thursday in Asaba, gave the Delta State House of Assembly members, a  breakdown and the true picture  of the state indebtedness, in his State- of – the- State address to the people of Delta  and the way forward.

Governor Okowa told the capacity filed haloed 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 has 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 him,  “shortly after I was sworn in , I caused to be issued the suspension of ; recruitment  by  Civil Service Commission made after 31 December , 2013 to date”.

“Payment  of 20 %  cost of collection (CoC) of  internally  generated revenue (IGR), 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 perod  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.”

In November 2014, Okowa revealed that “ Delta  State also acted as guarantor to some selec 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 have paid four installments , 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 u 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 as well as our 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  N60,000 persons with a monthly  personnel cost of N7,437,940,015.38 inclusive of the  N678 million  state government support  to local  government  councils for the payment of  primary  school teacher’s salary.

He therefore called for scarifies, synergy between the executive, legislatures and Deltans  in his attempt to pull the parlors state of the state out from the economic woods. 

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