Clean slate for Ortom’s successor as FG grants Benue N84bn debt cancellation

In order to significantly lower the state’s overall debt load, the Benue State Government under Governor Samuel Ortom, has obtained from the Federal Government a debt cancellation agreement worth N84 billion.

This was accomplished through a debt swap deal, according to Commissioner of Finance, Mr. David Olofu, who announced this on Monday at the conclusion of the State Executive Council (SEC) meeting in Makurdi, which was presided over by Governor Ortom.

Olofu stated that the money used for the swap was money that belonged to both the state and the federal governments which the federal government had unilaterally used without permission.

The said money was being refunded, and the Ortom-led administration chose to use it to cancel all debts that the state owed to the federal government in order to give the incoming administration a fresh start.

Explaining further, the Commissioner said, “on assumption of office in 2015, this administration between 2015 and now accessed Federal Government’s interventions, the first one was bailout facility, another was budget support facility, agricultural commercial bank loan, Small and Medium Enterprise Development Fund, World Bank Grant, counterpart fund for the Universal Basic Education Commission, UBEC, Bridging finance from the UBA, and Central Bank of Nigeria, CBN, COVID-19 Fund. All these put together stands at about N84billion as at today.

“Now based on Governor Samuel Ortom’s ealier initiative to engage consultants to reconcile, through forensic audit, deductions by Federal Government of Nigeria from our collective account, we achieved some resounding results.

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“This collective account is called the Federation Account; and it is made up of the Excess Crude Account, Petroleum Profit Account and Account for royalties; these are the Federation Account.

“The Federal Government overtime from 2009 to 2015 deeped hands into these accounts and spent money on subsidy amounting to about $12billion. It also spent money on SURE-P amounting to about $6billion. It spent money on Census and other responsibilities of the Federal Government. This came to a total of $18billion that was spent from the collective accounts of the federation.

“So the Governor’s Forum came together and decided that since the states are owing the Federal Government, based on the interventions that the state governments participated in or benefitted from, and the Federal Government on the other hand decided, unilaterally without authority, to spend money belonging to the Federation; they should come together and have an agreement for reconciliation, refund and debt swap.

“That has been done and we are now at the point of debt swap. And Benue state government, just like other state governments is participating in achieving this.

“At the end of the day we should be able to achieve reduction in our overall domestic debts from what it stands today by N84billion. And of course this is subject to further evaluation by consultants and the team from the Federal Government that is working on this.

“What we are saying in essence is that since we came on board as a government we have participated, like other state governments, in the intervention of the Federal Government.

“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 happen between what we are owing the Federal Government and what the Federal Government is owing our state.”

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