30 December 2011
Edo State Government has paid close to N7bn of the N25 billion bond approved by the Securities and Exchange Commission (SEC) for the state government earlier this year.
The State Governor, Comrade Adams Oshiomhole disclosed this during an interview by a panel of broadcast journalists aired on the Independent Television (ITV) in Benin City.
According to him, “nobody will lend to you unless you demonstrate that you have the capacity to pay and you start paying immediately. So whether at the Federal or State levels we are the least borrowing, and we are able to service those debts and all money we owe we are paying now and not in the future”.
While reacting to insinuations in some quarters that the Central Bank said state was broke, Comrade Adams Oshiomhole said Edo State is better off than the Federal Government for being able to implement the minimum wage for workers which the federal government is yet to do.
“For every one naira Edo State has, we spend about sixty percent on capital projects and twenty percent on recurrent, while at the Federal level they spend eighty percent on recurrent and twenty percent, which is borrowed on capital. So if Edo State is broke, the Federal Government is already finished,” he noted
He said it is true that the state could be a lot better considering the challenges on the ground adding that, “we need more money, because at the rate we are moving, it will take us more years to build all the schools we want to build all the schools, to build all the roads, to stop the problem of flooding, we are spending N30 billion on one canal and about twelve roads we are going to do around the area. To fix Benin we need about N200 billion.”
The Governor added that, “to prove that the state is not broke, when we decided as governors not to accept the money the federal government put in the federation account, the Federal Government and many states could not pay salaries, but we were able to pay,”
Comrade Oshiomhole who disclosed that every month, the State Government pays as much as N100 million on debts incurred during the military era and other previous governments in the state insisted that “there is no government anywhere in the world that does not borrow, but what matters is what you are borrowing for, are you borrowing to pay salaries, that will be wasting money, are you borrowing to do festivals, that will be wasting money, but if you borrow to do roads, which leads to improvement of economic activities, that is value to money.”
It would be recalled that the state government had earlier this year secured the necessary approvals for a N25 billion (twenty five billion naira) bond from the capital market for infrastructural development.
The offer for subscription of fixed rate infrastructural development bond is restricted to qualified institutional investors and high networth individuals as defined by rule 78(c)(2) of the Securities Exchange Commission (SEC).
The bond which was issued to the state Government for N1, 000 per unit at a fixed rate of 14 percent will be due in the year 2017.
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