Governor Godswill Akpabio has confirmed a move by the state to borrow $500 million.
Akpabio has sought the approval of the Akwa Ibom State House of Assembly to borrow the sum, which is about N80 billion, from Standard Chartered Bank International, United Kingdom. The loan, according to Governor Akpabio, is to offset the N50 billion loan earlier taken from the United Bank for Africa Plc in 2012.
It is also to refinance the outstanding financial liabilities and commitments of the state government.
This was contained in a letter sent to the House by the governor and read by the Clerk of the Assembly, Mandu Umoren.
The letter, with reference number GO/AKS/S.45/86, reads in part: “I, hereby, request for your speedy consideration and approval of the House of my request to borrow $500 million (about N80 billion) from the Standard Chartered Bank International.
“The proceeds of this loan facility will be utilised to offset all outstanding loan commitment of the State Government to UBA Plc. This will drastically reduce the applicable interest that government will have paid on the facility from UBA Plc which runs into billions of naira.”
The governor further said that the loan from UBA attracted an interest rate of 18.5 per cent per annum, while the Standard Chartered Bank International loan rate is 8.19 per cent per annum.
It would be recalled that the House in May 2012, in a resolution after a deliberation on the earlier request, approved the borrowing of N50 billion to execute ongoing infrastructure development programmes of the state government.
The Speaker, Samuel Ikon, directed that the letter be referred to the House Committee on Appropriation and Finance for indepth work.
Ikon directed the committee to report back to the House as soon as possible.
The state government’s contingent liability commitment to its key contractors, according to the governor, amounts to N30 billion, bringing the total bankable liability of the state to N80 billion.
Akpabio confirms move to borrow $500m
