The Bayelsa State House Assembly has approved a request by the state governor, Douye Diri to renegotiate and restructure outstanding commercial bank loan facilities.
A press release by the Bayelsa State House of Assembly on Tuesday said the legislature approved the request same day.
The statement did not indicate the number or total amount of the outstanding commercial bank loan facilities that the governor requested to restructure.
According to the House of Assembly, Governor Diri’s request was premised “on the unprecedented squeeze on federal and state finances occasioned by the ongoing Covid-19 pandemic and collapse of oil revenue.”
The legislature said the governor “had disclosed that both the Hon. Minister for Finance, Budget and Economic Planning and Governor of the Central Bank of Nigeria had advised states to restructure their existing commercial bank loan facilities as one of the measures to deal with the issues of dwindling state finances.”
According to the statement, Governor Diri requested the approval to enable the state treasury renegotiate, restructure, merge, seek tenor extension and interest rates of the loans and “contingent liabilities of the state.”
During the last transparency briefing by the Technical Assistant to the Governor on Treasury and Accounts, Timipre Seipulo told newsmen that total deductions at source for March and April stood at N1.5 billion and N1.47 billion respectively.
Sometime in 2019, former governor Henry Seriake Dickson borrowed €60 million to develop the Bayelsa State Maritime Institute, Okpoama near Brass.
Dickson also obtained a loan facility of N40 billion to complete the Bayelsa International Airport near Amassoma, which he commissioned before leaving office on February 14, 2020.
As at December 31, 2020, the total external debt stock of Bayelsa State stood at $59.551 million while the domestic debt stock was N147.92 billion.
Governor Diri had borrowed N2.9 billion for car loans on assumption of office while he stated in his budget address that the state would borrow N39.682 billion in order to finance the N242.3 billion 2020 budget.
Added to the debt profile inherited from the previous administration, the state’s total debt stock is expected to rise sharply necessitating the request to renegotiate the loans.