Economic Recession: Okowa Moves to Pull Delta out of N636Bn Indebtedness

June 26, (Blank NEWS Online) –

Delta State governor, Senator Dr. Ifeanyi Okowa has commenced moves to pull the state government out from its current abysmal N636 billion indebtedness in the face of the country’s economic recession.

Governor of Delta State, Senator Ifeanyi Okowa, giving his Speech with him, Rt. Hon. Monday Igboya, Speaker, Delta State House of Assembly, during the briefing to Delta State House of Assembly, on Financial Status of the State, by the Governor.

Governor Okowa on Thursday in Asaba, gave the Delta State House of Assembly members, a breakdown and the true picture of the state indebtedness, in his State- of – the- State address to the people of Delta and the way forward.

Governor Okowa told the capacity filed haloed chambers’ that he has directed the state’s ministry of Finance and the Accountant- General to restructure the irrevocable standing payment order (ISPO) on contractor’s guarantee and overdraft facility over a period of 42 months.

Governor Okowa has equally directed that necessary machinery be put in place to boost the state’s Internally Generated Revenue (IGR) while steps will urgently be taken to plug loopholes in revenue collection.

According to him, “shortly after I was sworn in , I caused to be issued the suspension of ; recruitment by Civil Service Commission made after 31 December , 2013 to date”.

“Payment of 20 % cost of collection (CoC) of internally generated revenue (IGR), consultancy contracts entered into by the Board of Internal Revenue and approvals for deduction of IGR collections by MDAs pending their review; all contracts approvals or commitments entered into for and on behalf of the state government from 1st April , 2015 or any contract tied to the 2015 budget”.

Giving a breakdown of the state indebtedness Governor Okowa hinted that “Federal allocation has dipped significantly, dropping to just N8.03billion, as received in May 2015, from a high of over N20 billion in previous years”

He said the “state is currently grappling with a revenue bond and indebtedness to commercial banks totally N98.62 billion (principal sum), while outstanding contractual obligation is N538,601,962,421.50.”

Okowa revealed that “in 2011, the state government took a N50billion facility from the bond market , with a repayment perod of seven years in 84 installments at N1.098billion each month”, adding that “ this facility will terminate in September 2018 with 40 more installments(totally N43.92 billion) to pay with effect from June 2015.”

In November 2014, Okowa revealed that “ Delta State also acted as guarantor to some selec contractors supported by the issuance of an Irrevocable Standing Payment Order (ISPO) of N2.23 billion monthly , for which the contractors received the total sum of N40billion”.

He explained that “the state now have paid four installments , has 20 more monthly installments totaling N44.60 billion (including interest payments) extending through year 2017 to pay”, adding that “we also have N19billion and another N715 million overdraft facility outstanding with Zenith Bank Plc, while some other smaller loans and overdraft facility totaling about N2billion with other banks have to be paid”.

He further lamented that “ as it stands today , a total monthly deduction of N4.60 billion will be made from our FAAC receipts with effect from this June through to March 2017, and thereafter N1.098 billion monthly until September 2018, saying that this leaves u with a balance of N3.4billion assuming the FAAC allocation stays at N8.03 billion”.

Currently, Senator Okowa pointed out that “the receipt from internally generated revenue (IGR) is about N2.0 billion monthly , after deducting cost of collection , adding that “the implication of the above scenario is that the funds available to run the state is N5.40 billion monthly in the next two years , except there is a significant rise in oil receipts and FAAC earning as well as our IGR”

Senator Okowa stated that “unfortunately, the available funds of N5.4 billion is insufficient to offset our monthly wage bill , let alone fund overhead coast or for government to embark on capital projects .

He said the state workforce as at May 28, 2015 stood at over N60,000 persons with a monthly personnel cost of N7,437,940,015.38 inclusive of the N678 million state government support to local government councils for the payment of primary school teacher’s salary.

He therefore called for scarifies, synergy between the executive, legislatures and Deltans in his attempt to pull the parlors state of the state out from the economic woods.

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