The Bayelsa State House of Assembly has again approved a request by Governor Douye Diri to renegotiate and restructure existing loans the state government had collected from commercial banks.
The 24-member House gave the approval during plenary at the Assembly Complex in Yenagoa presided over by the Speaker, Abraham Ingobere, upon resumption from recess on Tuesday.
The House also approved Diri’s request on the 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper in line with Section 14 of the state’s Fiscal Responsibility Law, 2009, as amended.
Diri, who conveyed his request through a letter read by the Clerk of the Assembly, Owudugo Kozigene, explained that the renegotiation and restructuring of the loans would help to free up funds for critical developmental projects.
He said, “It has become increasingly difficult for government to fulfill its debt obligations due to the increasing demands on limited resources and huge burden of inherited debts from previous administrations.”
“The approval of the House is necessary to enable government renegotiate the tenure and rate of existing commercial banks loan facilities for more favourable monthly repayment.”
However, the letter did not indicate the total amount of the outstanding commercial bank loans the governor was seeking the legislature’s approval to renegotiate and restructure.
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The Chairman, House Committee on Information and Orientation, Tare Porri, told journalists in an interview after the legislative proceedings that the Assembly okayed the request to achieve the administration’s developmental targets.
He said, “Lack of funds caused by the present economic realities is affecting the infrastructure drive of the governor.”
It is the second time in 16 months that the Assembly would grant Diri’s request to renegotiate and restructure outstanding commercial bank loan facilities as it had done so in June 2020.
The Diri-led administration has secured three different sets of loans since it was officially inaugurated on February 14, 2020.
In March 2020, the government collected a N2.9bn loan to buy official vehicles for the offices of the governor and the deputy governor as well as top government functionaries.
Also in November 2020, the government got a N17bn loan from multiple sources and secured another N3.5bn loan in December of the same year. All loans were approved by the Assembly.
According to data obtained from the website of the Debt Management Office, Bayelsa’s debt profile, as of June 2021, stood at over N150.60bn, up from the N123bn inherited by the present administration.