NIGER ASSEMBLY CLARIFIES THE $14.4 MILLION LOAN REQUEST BY GOVERNOR BAGO

From John Adams Minna

….Says government not seeking fresh loan request

Niger State House of Assembly has cleared the air on the $14.4million (#20.4billion) loan request by the state governor Umaru Mohammed Bago, saying that the letter from governor was only to seek the approval of the assembly for the state to guarantee the loan by Niger Food Security Systems and Logistics Company.

Speaking to newsmen in Minna on Wednesday, the speaker, RT Hon Abdulmalik Sarkindaji pointed out that contrary to insinuations that the house of assembly has approved a fresh loan request by the Governor, the request was for the government to guarantee Niger Food Security Systems and Logistics Company through UBA to secure a loan from Saudi Exim line to support the company’s operational expansion for the development of 3,000 hectares fully irritated farm estate to be situated in the state.

The Speaker said the clarification has become necessary following the misconception that the state assembly has granted a fresh loan to the state government to the tune of #14.4mllion, stressing that “the report was a complete misrepresentation of the request sent to the state house of assembly by the governor”.

He explained further that during the sitting on Tuesday, “the house received a correspondence from Governor Mohammed Umaru Bago seeking legislative approval for a bank guarantee in favour of the United Bank for Africa (UBA) in relation to a financing arrangement involving the Niger Foods Security Systems and Logistics Company”.

According to him, “we only received a correspondence from the governor, seeking the approval of the state assembly to enable the government stands as a guarantor between the Saudi Exim Bank and Niger food security systems and logistics limited.

“It was not a fresh loan request by the governor but a request for an approval from the house for the government to quarantine the loan for Niger food security system and logistics company. “The request was read at the plenary and was referred to the appropriate house committee for further deliberation. So for the purpose of clarity, it is not a fresh loan request”, he stressed

He explained that Niger Foods Security Systems and Logistics Company is a separate corporate entity even though the state government is the largest shareholder in the company, it operates as a limited liability company with its own corporate identity and management structure.

He emphasized that the responsibility for repayment of the loan facility rests solely with the Niger Foods Security Systems and Logistics Company and not with the Niger State Government.

The Speaker further stated that the financing institution requires a government-backed guarantee because of the state government’s substantial shares in the company.

He maintained that “The only role of the Niger State Government in this arrangement is to serve as guarantor for the facility. This is why the executive sought the approval of the Niger State House of Assembly in accordance with the law,” he explained.

The speaker however pointed out that the state government through the governor is at the liberty to apply for loan through the state assembly if the purpose is for the development of the state, adding the the house will not hesitate to grant such loan request.

He disclosed that the assembly is aware and have the record of all the loan facilities it has granted to the government since the inception of this administration, saying that anybody who wants to know the debt profiles of the state should approach the state debt management office for clarifications.