Kwara State House of Assembly has approved Governor Abdulfatah Ahmed’s request to access the Federal Government Budget Support Facility (BSF), which gives state government free hand to access not more than N1.3 billion whenever there is shortfall in the state allocation that may prevent government from performing its obligations.
The Assembly gave the approval on Wednesday at an emergency plenary session as the House had since June 16 begun annual recess and expected to resume on August 9, but the recess was broken to attend to state matter.
Governor Ahmed had through a letter dated June 21, read by the speaker, Ali Ahmad, sought for legislative approval to enable the state access the Federal Government facility.
Ahmed said the meagre allocation from the Federal Government had been making governance very challenging for states, adding that some states were already winding down on the payment of staff salary in the face of current economic downturn.
The governor further explained that the Federal Ministry of Finance had identified and negotiated with potential lenders and had formally convened an offer of a total sum of N14.16 billion to support the state government to be made available in three tranches.
The disbursement under the BSF, according to the governor, requires intending states to among other things, obtain the resolution of the House of Assembly authorising the facility.
The letter reads in parts: “The facility which has a single digit interest of 9 percent is secured with an irrevocable standing payment order on the state FAAC as well as the corporate guarantee of the Federal Government.
“This facility when accessed will give Kwara State government a sigh of relief in the implementation of its policies and programmes, especially as spotlighted in the slogan Shared Prosperity.”
The speaker, Ali Ahmad, said through the BSF, the Federal Government would make available N90 billion for all the 36 states to bridge the gap of lack of funds to support the budget, explaining that the state government would be able to access N1.3 billion whenever the allocation dropped less than the expected, but if the Federal allocation improved, the state would not access the loan.
Meanwhile, the Kwara State House of Assembly has also approved the state government request to access N973 million loan facilities from Skye Bank plc to finance the provision of SUBEB counterpart fund to enable the state access the 2014 Universal Basic Education Matching Grant from the Federal Government.
The request was also presented and approved at Wednesday emergency plenary by the speaker, as the provision of SUBEB counterpart fund remains a major prerequisite for accessing the Federal Government Universal Basic Education Matching Grant.
He noted that the state government was unable to source for the fund internally due to the continuous fall in the federal allocation receipt, adding that Skye Bank had offered the government a term of loan facility of N973 million to enable it access the grant for the year 2014.
The facility, according to the governor, which had tenure of 12 months with 22 percent interest rate per annum, was secured with an irrevocable standing payment order.
The speaker said the loan was to ensure conducive atmosphere for learning in schools across the state.
