By Chibuike Nwabuko
Abuja (Sundiata Post) – The senate is taking steps to approve the $350m external loan request presented before it by the Kaduna state government.
Part of steps required was the public hearing by the senate committee on local content which held yesterday to discuss the the loan request.
This followed an appeal by Senator Uba Sani representing Kaduna Central Senatorial zone to committee members to grant the request by the Kaduna state government.
Canvassing support for the loan, Sani observed that the what the Kaduna State government has done was in line with what the Senate called for, saying the loan would be used for infrastructural developments.
“I believe this loan is very necessary, it is in line with what the Senate called him for, therefore distinguished colleagues, I called on you to support the Kaduna State government to be able to access this loan.
“Of course you are all aware that this loan did not start today, it was discussed in the 8th Senate so colleagues I know you will support this loan,” Sen. Sani said.
Speaking during the session, the chief of staff to Governor, Nasir El’Rufai, Mohammed Abdullahi stated that the loan was purposely designed to fund capital projects with socio-economic impact on the citizenry in Kaduna state and in line with the State Development plan.
“This is reflected from the budgetary provisions, where 22.13 percent is allocated to the ministry of Works, Housing and transport; 12.57 percent allocated to Education, Science and Technology; 8.71 percent allocated to Rural and Community Development and 8.36 percent to Kaduna Geographical Information Service (KADGIS); while the rest is distributed among others MDAs.”
In whether the state van repay the loan, Abdullahi responded thus: “Based on the economic indices, Kaduna State van confortably repay the loan.”
According to Abdullahi “the state average monthly FAAC allocation for the preceding twelve months is N3.27bn, while our current monthly debt service is N467.12m.”
“Also, the monthly debt service forecast in the FGN budget support facility of N14.169bn with a moratorium of 18 months and World Bank loan of 350m USD with a moratorium of 10 years are N191.767m and N98.843m respectively.
“If the State was to repay all loans today, the total monthly debts service would be N757.735m representing 23 percent of total deductions as a percentage of total allocations.
“This is less than the threshold for sub-national borrowing which is capped at 40 percent. In view of this, Kaduna State is within the sustainable debt level,” Abdullahi added.