Business

NIGERIA: Kwara Explains Plan for N23bn Bond

The Kwara State government yesterday said it will spend N15.5 billion of the N23 billion bonds it intend to issue on the execution of capital projects across the three senatorial districts of the state.
 
This, the government believes would add value to the socio-economic well being of the populace.
 
The government said the remaining N7.5 billion would be used for refinancing the loan of N10 billion it had previously obtained from a commercial bank.
 
Speaking to journalists in Ilorin, the state Commissioner for Finance, Alhaji Demola Banu, his counterpart in the Works Ministry, Dr. Abubakar Amuda-Kannike and Special Assistant to the governor on Investment, Mr. Abayomi Ogunsola, said that, "government's decision to go for the bond was informed by the need to find an additional source of fund for the infrastructural development of the state".
 
He said the debt would complement the fund the state receives from the federation account and its Internally Generated Revenue (IGR) to execute developmental projects and complete on-going ones.
 
Banu disclosed that the state would have seven- year period to refund payback the debt with a fixed interest of 15 per cent.
 
Also speaking,  Amuda-Kannike disclosed that N5.4 billion of the of amount meant for projects from the bond would be expended on construction and rehabilitation of roads.
 
He listed the roads to cut across the three senatorial district of the state with the federal road of Kishi (Oyo state)-Kaiama (Kwara state) road inclusive.
 
The commissioner who disclosed that N2.3 billion would be spent for commencement of works on the 64.8km federal road said this represents 30 per cent of 7.9billion the road project would gulp.
 
On his part, Ogunsola restated that the share of the fixed income instrument to be issued meant for project execution would be expended on projects such as road, renovation of secondary school classrooms, and the on-going water reticulation in Ilorin metropolis.
 
He therefore said the government opted to issue the bond as against receiving loan from commercial banks because the interest on bond is fixed as it would increase till the lapse of the time the bond would be refunded.

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