Kayode Fasua in Abeokuta
The Ogun State House of Assembly yesterday granted the state Governor, Dapo Abiodun, approval to access a N250billion bond to stimulate the state economy and shore up the sharp decrease in Internally Generated Revenue (IGR) and funds accruing from the federation account, owing to the negative effects of COVID-19.
The loan is, however, to be accessed in tranches within a period of three years at N100billion per annum.
The Assembly’s approval followed the passage of a resolution titled: ‘Request for Bond Issuance, Public Offering or Book Building to the tune of N250 billion’, moved by the Majority Leader, Yusuf Sheriff, seconded by Jemili Akingbade and supported by all the lawmakers through a voice vote at a plenary presided over by the Speaker, Hon Olakunle Oluomo.
The Assembly’s decision was in line with Abiodun’s request for approval to access the credit facility communicated to the Assembly last month and read yesterday at the plenary.
According to the approval, the medium term financial programme would be carried out in tranches of N100billion annually through any of bond issuance, public offering, book building or such other methods as may be approved by regulatory authorities, while access to other tranches were subject to further approval of the state House of Assembly.
Earlier, the Chairman, Assembly Committee on Finance and Appropriation, Olakunle Sobukanla, explained that due to the economic challenges occasioned by the COVID-19 pandemic, the state needed to access the financial instrument with a very low interest rate to further actualise the infrastructural development of the state.
Responding, the Speaker, Oluomo, stated that upon receipt of the request, the Assembly had engaged relevant government agencies with an assurance on the desirability of the facility.
He added that the approval of the financial intervention would help sustain the state economy following the economic downturn caused by the pandemic, leading to the drastic reduction in the internally generated revenue as well as fund being received from the Federal Allocation account.