The final process for the first tranche of N17billion was on Tuesday concluded between the State government and representatives of the participating banks with 14% fixed interest rate to be repaid between now and 2014.

Following this development, the State Government has agreed to set aside the sum of N400 million from its monthly Internally Generated Revenue to service the bond.

Speaking at the ceremony, the State Governor, Dr Bukola Saraki explained that rationale behind raising the bond, which he said was to accelerate economic and social development in the State.

He expressed optimism that the bond would go a long way towards enhancing long-term funding for development.

"For this journey today that we are celebrating actually started on 20 May, 2003 when my humble self was elected as governor with the team before us here and we took our oath to ensure that we do our best to uplift the lives of our people and bring in good governance to administration", Saraki said.

He said the challenges ahead were so enormous that the State government could not rely solely on allocation coming from the federation account.

"You see, we cannot rely on allocation coming from the Federal Government with the challenges now, because most states are even borrowing money to pay salaries, most states are not able to complete existing projects", the governor explained.

Governor Saraki expressed appreciation to all the stakeholders for the good job they have done and for their active participation to ensure the success of the bond process.

He specifically commended the management of First Bank and Guarantee Trust Bank for the partnership received from them, saying it shows the level of confidence they have in his administration.

On the repayment of the bond which extends beyond 2011, he said his administration has started working for the in-coming administration by raising the level of Internally Generated Revenue (IGR) to be able to service the bond.

"Our target before the end of our tenure is to raise our IGR which we met from about N80-90 million to over half a billion", he explained, noting that with the increase, it will easily cover the amount so that the issue of ‘value added tax’ would not be a problem.

In his remarks, the Deputy Managing Director of Guarantee Trust Bank, which is the lead issuing bank for the bond, Mr Segun Agbaje said the bond was facilitated by the financial prudence of the State, evidenced in its B+ rating by the Fitch Rating International Agency.

Agbaje, who thanked the State Government for the opportunity offered them, called on other states to emulate Kwara State on prudent management of fund.

Also speaking on the bond, Commissioner for Finance, Alhaji Abdulfatahi Ahmed described it as a good beginning towards moving from a public sector-driven environment to the much desired private sector-driven environment.

Ahmed justified the essence of raising fund through the capital market, assuring that the bond would further address the problem of poverty in the State and also increase wealth creation.
 

Mas’ud Adebimpe

Chief Press Secretary to the Kwara State Governor

22/07/09