KWHA grants govt’s request to access budget support facility … approves N973 million SUBEB counterpart facility

Hon Ali Ahmad

The Kwara State House of Assembly has approved the state government’s request to access the Federal Government Budget Support Facility (BSF).

With the approval, the state government is free to access not more than N1.3 billion whenever there was shortfall in the state allocation which might hinder the government from performing its obligations.

The House gave the approval on Tuesday during an emergency plenary.

The House had since June 16 began annual recess and expected to resume on August 9 but the recess was broken to attend to the state matter.

Governor Abdulfatah Ahmed had through a letter dated June 21, read by the Speaker, Dr. Ali Ahmad, sought for legislative approval to enable the state access the Federal Government Budget Support Facility and Fiscal Sustainability Plan (FSP).

He said the meagre allocation from the federal government had been making governance very challenging for the states, adding that some states were already winding down on the payment of staff salary in the face of the current economic downturn.

He explained that the Federal Ministry of Finance had identified and negotiated with potential lenders and had formally convened an offer of a total sum of N14.16 billion to support the Kwara State Government to be made available in three tranches.

The disbursement under the BSF according to the governor required intending states to among other things obtain the resolution of the House of Assembly authorizing the facility.

The letter reads in parts: “The facility which has a single digit interest of 9 percent, is secured with an irrevocable standing payment order on the state FAAC as well as the corporate guarantee of the Federal Government.

“This facility when accessed will give Kwara State Government a sigh of relief in the implementation of its policies and programmes especially as spotlighted in the slogan Shared Prosperity”.

The Speaker, Dr. Ali Ahmad, said through the BSF, the Federal Government would make N90 billion available for all the 36 states to bridge the gap of lack of funds to support the budget.

He said the state government would be able to access N1.3 billion whenever the state allocation drops less than the expected but if the Federal allocation improves, the state would not access the loan.

He said it was to cushion the effect of the financial challenges being experienced in the state, adding that payment of workers’ salaries must be the priority of the government whenever the fund was accessed.

The House Leader, Hon Hassan Oyeleke representing Essa/Shawo/Igbodun Constituency said the request was not only meritorious but timely because it was meant to address salary issue.

Oyeleke however assured that the public account committee of the House would investigate how the previous loans granted had been utilized and for what purpose.

In their contributions, Hon Abdulrafiu Abdulrahman of Ilorin North West Constituency and Hon Ahmed Ibn Mohammed of Kaiama/Kemanji/Wajibe Constituency, called on the state government to assist SUBEB and local governments’ workers through the opportunity.

Motion for approval was later moved by Hon. Hassan Oyeleke, seconded by Hon Mohammed Mobolaji Amosa of Afon Constituency and it was unanimously approved by the parliament.

Meanwhile, the Kwara State House of Assembly has approved the state government request to access N973 million loan facility from Skye Bank Plc to finance the provision of SUBEB counterpart funding to enable the state access the 2014 Universal Basic Education Matching Grant from the Federal Government.

The request was presented and approved at yesterday emergency’s plenary by the Speaker, Dr Ali Ahmad.

The governor said the provision of SUBEB counterpart funding was a major prerequisite for accessing the Federal Government Universal Basic Education Matching Grant.

He said the state government was unable to source for the fund internally due to the continuous fall in the federal allocation receipt.

He added that the Skye Bank had offered the government a term of loan facility of N973 million to enable it access the grant for the year 2014.

The facility, according to the governor which had a tenure of 12 months with 22 per cent interest rate per annum, was secured with an irrevocable standing payment order.

The Speaker, Dr. Ali Ahmad said the loan was to ensure conducive atmosphere for learning in schools.