Benue pays off N84bn in debt swap deal with FG

This translates into 58.6 percent reduction in the total domestic debt of the state

Benue pays off N84bn in debt swap deal with FG

By The Editor 

This is good news for Rev. Fr. Hyacinth Alia, the Governor-elect of Benue state. The outgoing administration is on the verge of paying off N84billion of its domestic debt owed the Federal Government through a debt swap deal.
This translates into 58.6 percent reduction in the total domestic debt of the state, put at N143,368,150,982.89 by the Debt Management Office (DMO) as at September 30, 2022.

The Benue State Commissioner of Finance, Mr. David Olofu disclosed this on Monday at the end of the State Executive Council (SEC) meeting presided over by Governor Samuel Ortom in Makurdi. 

He explained that the funds deployed for the swap were monies belonging to the states and the Federal Government that the Federal Government unilaterally used without approval which was being refunded and the Ortom-led administration opted to have it deployed to offset all debts the state owed the Federal Government to help the incoming government start on a clean slate.

The Commissioner said, “on the 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), and COVID-19 Fund. All these put together stands at about N84billion as of today.

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

“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. 

“The Federal Government, over time, from 2009 to 2015 dipped its hands into these accounts and spent money on subsidies amounting to about $12 billion. It also spent money on SURE-P amounting to about $6billion. It spent money on the 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 a 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 a reduction in our overall domestic debts from what it stands today by N84 billion. 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.”