Okorocha gets approval to borrow N20bn

By Chidi Nkwopara

OWERRI—Imo citizens may be grappling with a staggering debt of over N80 billion if Governor Rochas Okorocha goes ahead to take the Federal Government approved N20 billion proposed bond issue.
Currently, the state is owing over N60 billion, including the Federal Government’s N26 billion bailout fund, which is expected to be paid back in 20 years.

The recent move by Governor Okorocha to grab another N20 billion became manifest via a letter from the Federal Ministry of Finance, DMO/PMD/241//T/7, dated August 25, 2015, and signed by A. M. Daniel-Nwaobis, the Permanent Secretary, Ministry of Finance.

 the Permanent Secretary’s mail was sequel to Okorocha’s earlier letter, dated May 2, 2015, requesting for approval to issue on “an Irrevocable Standing Payment Order, ISPO, for an amount of N402,957,780.91 monthly for 84 months in respect of a N20 billion ISG (Imo State Government) Bond Issuance Programme” to Finance Uncompleted and New Projects.”

The Federal Government drew Okorocha’s attention to “the fact that based on the fall in oil prices and the consequent decline of revenues for governments at all levels in the country, there is an urgent need to exercise greater restraint with respect to borrowing to avoid future debt unsustainability.”

While informing Governor Okorocha that the Debt Management Office had advised that his request could be granted, the Permanent Secretary granted a “no objection” approval for the government to go ahead with the plan.

“Accordingly, I hereby grant a no objection for the state government to issue an ISPO for a monthly deduction of N402,957,780.91 for  84 months in respect of a N20 billion bond for the completion of on-going infrastructure development projects and for new development projects in the state, subject to the state meeting other requirements of the Investment and Securities Act, 2007,” the Permanent Secretary stated.

Meanwhile, a very senior civil servant, who pleaded anonymity, told Vanguard that “the Okorocha administration’s commitment to pay approximately N403 million monthly and for seven years, means that the payment would outlive the present administration.”