Ogun Denies Plan To Secure N100bn Bond

The Ogun State Government has denied plans to secure a N100 billion bond from the capital market.

The state Commissioner for Finance, Mrs Kemi Adeosun,  said at a news conference in Abeokuta that the bond instrument was not the appropriate option for the state in the present circumstances.

Our correspondent reports that the commissioner was reacting to rumours that the government had requested the state House of Assembly to approve the plan.

Adeosun explained that the executive had only forwarded a bill seeking to set up a legal framework for accessing external loan by the state government.

“If the bill is eventually passed into law, it will serve as an instrument for financial discipline which will be binding on the present administration and the successive administrations.

“It seeks to repeal the existing Ogun State Bond Law, which is so weak and allows the government to just seek for bond loan anytime it desires,’’ she said.

The commissioner stated that the present administration had borrowed N15 billion since its assumption of office in May 2011, adding that the fund was still intact.

She said that the money was secured to finance capital projects.

“We are actually on a financial recovery process and what we are doing presently is to reduce the inherited loan significantly while improving on our revenue generation drive.

‘’In this regard we have reduced our inherited debt from N87 billion to about N60 billion, while the internally generated revenue has increased from N17.9 billion in 2010 to N25.2 billion in 2011.

‘’What we need now is not long term financial instrument like bond but medium term instruments like promisory notes and contractors financing.

‘’ In all, I can confidently say that the financial recovery process adopted by the present administration is on course,’’ She said.