By Fola James
The Kogi state government has applied for $100m loan to develop infrastructure in the state, the Governor Yahaya Bello administration has said.
The loan would see the state’s debt profile rise astronomically to N160bn in just five years.
Critics of the government have expressed fears that the state’s loan could exceed 25 per cent of its revenue by the time Governor Bello leaves office in 2023.
The debt management office had put the state’s current debt at over N114bn by the end of 2019.
Watchers of the state’s politics have been critical of the administration’s penchant for borrowing since it came on board in 2015.
But the state’s commissioner for Finance, Budget and Economic Planning, Idris Ashiru, said on Wednesday that the loan is required to bridge infrastructure gap.
He stated that the $100 milliom would be used to revive the National Staple Crop Processing Zone (SCPZ) at Alape in Kabba/Bunu Local Government Area of the state, and provide other critical infrastructure like road and electricity .
According to him ”The $100 million, when accessed 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 said the state’s debt profile is still within the required threshold, adding that the economy of the state can still accommodate loans.
He explained further that “A state who is not using more than 40 per cent of its Internally Generated Revenue, (IGR) to service loan can still borrow.
Kogi State is presently using only 28 per cent of its IGR to service loan.We still have a difference of 12 per cent to borrow. “We are not borrowing for consumption. We are borrowing to build capital projects.
A portion of the loan will be used to fight insecurity, the commissioner said because “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.”
