Fakoyejo OlalekanBenue State Government has agreed to a swap deal with the Federal Government to reduce the state’s debt, the state’s Commissioner for Finance, David Olofu, revealed on Monday.
Olofu said the debt swap deal will clear about N84 billion borrowed under Governor Samuel Ortom’s administration, which started in 2015.
The loan was obtained through various FG interventions such as bailout facility, agriculture commercial bank loans and FG Counterpart fund for Universal Basic Education.
Also, Benue state debt included budget support facility for State and Local Governments, CBN COVID-19 funds, Small and Medium enterprises development fund, World Bank RAAMP, as well as Bridging Finance from UBA.
He explained that the debt swap deal is in form of “what we are owing the Federal Government and what the Federal Government is owing our state,” Olofu said during a media briefing.
The commissioner said Benue state and FG reached the agreement due to the latter’s unauthorised usage of funds in the federation account that serves as a collective account for states and FG.
Olofu stated: “We are writing off the debts so that the state will be in good financial standing so that the incoming APC government will not be faced with the burden.”
Explaining how the agreement came about, Olofu said: “The FG overtime from 2009 to 2015 dipped hands into those accounts and spent money on subsidy, amounting to about $12 billion; spent money on Sure-P, amounting to about $6 billion. It also spent money on Census and other responsibilities of the Federal Government. This came to a total of over $18 billion spent from the collective account of the Federation.
“So the Governors’ Forum came together and decided that since the states are owing the FG, based on interventions that the state governments participated in, the Federal Government and because the federal government decided to unilaterally, without authority, spend money belonging to the Federation, then they should come together and have an agreement for reconciliation, for refund and debt swap.
“That has been done and we are now at the point of debt swap and Benue State Government along with other States are aimed at achieving this and at the end of the day, we should be able to achieve a reduction in our overall domestic debts from where it stands today.
“We are at a point now that we have come to an agreement in principle with the Federation Government to have a debt swap. The debt swap will be happening between what we are owing the Federal Government and what the Federal Government is owing our state.”
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