Ogun State House of Assembly on Thursday granted approval to Governor Dapo Abiodun to access a N250bn loan facility – a three – year Medium -Term Expenditure Frame Work ( MTEF) programme of the State.
The credit facility, when obtained, would be used to stimulate and grow the economy.
It is also expected to be accessed in tranches of N100bn annually.
The Assembly’s approval followed the passage of a resolution titled: “H.R: No. 067/OG/2020- Request for Bond Issuance, Public Offering or Book Building to the tune of Two Hundred and Fifty Billion Naira.”
Majority Leader, Yusuf Sheriff, moved the notion for the approval seconded by Jemili Akingbade and supported by all the lawmakers through a voice vote at a plenary presided over by Speaker Kunle Oluomo.
The Assembly’s decision was sequel to the Governor’s earlier request for approval to access the credit facility and which was communicated to the State House of Assembly last month.
The MTEF would be carried out in tranches of N100bn only annually, through any of bond issuance, public offering, book building or such other methods as may be approved by regulatory authorities, while access to other tranches were subject to further approval of the State House of Assembly.
Chairman, House Committee on Finance and Appropriation, Olakunle Sobukanla explained that due to the economic challenges occasioned by COVID-19 pandemic, the State needed to access the financial instrument with a very low interest rate to further the infrastructural development of the State.
Speaker Oluomo noted that upon receipt of the request, the Assembly engaged relevant government agencies with an assurance on the desirability of the facility. According to Oluomo, the approval of the financial intervention would help sustain the State’s economy, following the economic downturn caused by the pandemic.
He said the pandemic gave rise to a drastic reduction in the state’s internally generated revenue as well as fund being received from the Federal allocation account.