The Ogun State Government on Monday explained why it approached the World Bank to secure a N350 million loan.
The government also dismissed reports that the House of Representatives Committee on Loans, Aids/ Debt Management had disapproved of the loan request.
The state government had on Wednesday sought the approval of the National Assembly as part of the requirement for securing the loan.
The Commissioner for Budget and Planning, Aderenle Adesina, while shedding light on the loan said any serious government desirous of development should take advantage of such facility which she described as a concessionary loan offered at two per cent.
Ms. Adesina, accompanied by her counterparts in the ministries of education, agriculture, commerce and industries, explained that the Ogun government had become an “attractive bride” to international financial institution including the World Bank, due to the infrastructural development that it had undergone in the last six years.
“World Bank considers states that have demonstrated ability to perform and partners with such states in development.
Firstly, the loan attracts just two per cent interest as against the 22 percent obtainable in the normal financial market,” she stated.
“The loan is also payable over a period of 25 years with a five -year moratorium which means that we have about 30 years to pay it. It will be foolhardy for any government to reject such an attractive offer,” she said.
She further explained that the loan is not like the conventional loan where the full amount being sought is disbursed at once, stating that disbursement would be made in tranches based on performance.
The commissioner emphasised that the highest that the present administration in the state could get is a maximum of 25 per cent.
“This is a loan mainly for the future as the subsequent administration’s in the state stand to benefit more as more tranches are disbursed in the course of time.
“It will therefore be misleading to claim that the loan is meant just for the present administration,” she said.
Ms. Adesina explained that if the state is granted the loan, it would be used to further boost its transformational programme in the agricultural, educational and industrial sectors among others.
Reacting to reports that the House of Representatives had denied approval for the loan, she said that was untrue.
“There is a chain in the process. The Federal Executive Council as well as the Senate have already approved our request and we had also approached the House of Representatives for its approval,” she stated.
“The engagement with the House of Representative is ongoing and we are still on course and it will be wrong for anyone to conclude that the House had rejected our proposal,” the commissioner said.
Ms. Adesina equally faulted claims that the Ogun State Government did not need such loan with a monthly Internally Generated Revenue of N7 billion.
She said the government under Ibikunle Amosun should first be commended for raising the internal revenue.
The commissioner also noted that the present administration intended to further raise the figure to N15 billion monthly and it needed to take advantage of such loans to effect more infrastructural development to move the state to an enviable height.