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From Scholastica Onyeka, Makurdi
The Benue State Government said it has entered into a debt swap agreement with the Federal Government to cancel its debts to the tune of N84 billion.
State Commissioner for Finance David Olofu, who disclosed this on Monday, while briefing newsmen at the end of the Benue State Executive Council meeting in Government House, Makurdi, said the move was to reduce the debt owed to the federal government and relieve the incoming administration of some of the financial burdens.
Olofu who was flanked by the Commissioner of information, Mike Inalegwu, said by this agreement, part of outstanding domestic debts of the state incurred under the Governor Samuel Ortom led-government since its inception in 2015, which stands at N84 billion will be cleared.
“We are writing off the debts so that the state will be in good financial standing so that the incoming APC government will not be faced with the burden”
He also noted that the development would place the state in good financial standing in the event that any government after it intends to borrow.
The domestic debts were acquired from the federal government interventions to the state including bailout facility, budget support facility (for State and Local Governments), agriculture commercial bank loans; Small and Medium enterprises development fund; World Bank RAAMP; Bridging Finance from UBA; FG Counterpart fund for Universal Basic Education and CBN COVID-19 funds.
Olofu pointed out that “All of these put together amounts to about N84 billion as today (Monday).
“Now based on Governor Samuel Ortom’s initiative to engage Consultants to reconcile, through forensic audit, deductions by the Federal government, from our collective accounts, we achieved some resounding results.
He said the collective accounts is called the federation accounts and are made up of excess crude accounts, the Petroleum produce account and the Account for royalties.
He explained further that “The FG overtime from 2009 to 2015 dipped hands into those accounts and spent money on subsidy, amounting to about $12 billion; spent money on Sure-P, amounting to about $6 billion. It also spent money on Census and other responsibilities of the Federal Government. This came to a total of over $18 billion spent from the collective account of the Federation.
“So the Governors’ Forum came together and decided that since the states are owing the FG, based on interventions that the state governments participated in, the Federal Government and because the federal government decided to unilaterally, without authority, spend money belonging to the Federation, then they should come together and have an agreement for reconciliation, for refund and debt swap.
“That has been done and we are now at the point of debt swap and Benue State Government along with other States are aimed at achieving this and at the end of the day, we should be able to achieve a reduction in our overall domestic debts from where it stands today.
“We are at a point now that we have come to an agreement in principle with the Federation Government to have a debt swap. The debt swap will be happening between what we are owing the Federal Government and what the Federal Government is owing our state,” he explained.
