The Delta State House of Assembly has approved the request for restructuring of the state government outstanding commercial bank loans of N69.8 billion into Federal Government of Nigeria bonds.
Governor Ifeanyi Okowa had in a letter to the legislatos, read by Speaker Monday Igbuya at an emergency sitting of the House, demanded for the restructuring of the commercial loans into FGN bonds as approved by the Federal Government.
Okowa in the letter, signed by his deputy, Kingsley Otuaro, informed the House that “following the inability of many states in the country to meet up with their salary obligations due to the continuous decline of revenue from federal allocations, which is further worsened by the huge debt service burden occasioned by commercial bank loans, an approval was given by the Federal Government for the restructuring of outstanding states’ commercial bank loans into FGN bonds’’.
He said: “Arising from the above, the Debt Management Office, DMO, on 30th June 2015 requested the state government to apply to the Federal Ministry of Finance for a restructuring of its outstanding commercial bank loans into FGN bonds.”
Okowa, who disclosed that the request was approved by the State Executive Council on July 13, told the lawmakers that the bonds have a repayment period of 15 to 20 years or 180 to 240 months as against the maximum of three to four year tenure of commercial banks loan.