Niger State House of Assembly on Tuesday approved a request by the state governor, Alhaji Abubakar Bello, to restructure a revolving N3.5 billion overdraft into a 36-month term loan.
The lawmakers granted the approval during Tuesday’s plenary based on the the letter written by the Governor, who admitted that the COVID-19 pandemic had affected the revenue inflows of the state.
Bello, in the letter titled ‘Restructuring of Existing N3.5 billion Revolving Overdraft into 36-Month Term Loan’, stated that the state had to borrow short-term funds totaling N3.5billion in times of urgent needs.
The letter read in part, “The borrowings were predicted on projections that the quantum of inflows from FAAC would be enough to off-set the resultant debit position of the State’s FAAC account with Zenith Bank Plc stating that the downturn in the volume of receipts from FAAC has meant that over the last eight months, the account has not received inflows as anticipated and the debit position has remained around N3.5billion.
“Rather than continue to hold the debit position along with the attendant cost, government approached Zenith Bank Plc. with a proposal for the debt to be restructured into a 40-month term loan at 14 per cent per annum to enable us clean up and put the state on a more sustainable financial position.”
The governor further stated that after series of negotiation, the communicated an offer of a 36-month term loan at an interest rate of 17 per cent per annum, on a reducing balance basis, which is competitive in terms of the market, the economic realities in the state.
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