Kwara proposes N30bn bond in 2014

The bond, according to Governor Abdulfatah Ahmed is to be repaid in 2019.
This was contained in the 2014 budget proposal presented on Tuesday, last week, before the state House of Assembly. The total estimate for the coming year is N124.5bn out of which 14 per cent or N17.2bn would be used to service outstanding short and long term loans.
The proposed N30bn bond is expected to complement other sources of financing for the budget which include the monthly statutory federal allocation which the governor estimated at N44bn; Internally Generated Revenue (IGR), N16.9bn; capital receipts and aids/grants, N22bn and Value Added Tax estimated at N8.5bn.
The governor hinted that government would continue to borrow to finance capital projects, noting that borrowing is not a sign of incapacity as long as the state has the ability to pay.
Ahmed, an ex-banker and former Commissioner for Finance in the state in a recent interview said “What we can assure our people is that we’ll be transparent in all our dealings. If a state does not borrow, it means it is operating within its monthly allocation”.
But a Financial Analyst, Dr. Sanni Mubaraq in a chat with Business Trust said care must be taken to ensure that the bond does not become a burden for government. He advised the government to explore “sound source” of income generation rather than going for bond which he said, “has a long run multiplier effect”.
Mubaraq of the Department of Accounting and Finance, University of Ilorin said, “To my own personal view, I think the government should look inward in generating enough incomes in financing budget rather than going for bond”.
Commenting on the economic affairs sector which takes over N20bn (35 %), the largest chunk of the budget, the expert described it as a means of providing adequate services to the public.
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