Jang leaving N18bn debt

Plateau State Government on Friday said its current debt profile was N18 billion and not N200 billion as being speculated.
Commissioner for Information and Communication, Mr Abubakar Badu, stated this at a news briefing in Jos shortly after the State’s Executive Council meeting.
Badu said that the council deliberated on the misinformation regarding the true indebtedness of the state particularly as it concerned the bond the Jonah Jang administration recently secured.
He said that the clarification became imperative in order to put the records straight and let the public to know that the outgoing administration in the state had nothing to hide.
He revealed that the Jang inherited a debt of N80 billion, on assumption in 2007 but was able to defray it in its first tenure.
He added that the government borrowed N48 billion to finance the execution of capital projects.
Supporting Badu, the Commissioner for Finance, Mr Davou Mang, explained that the state government ‘’in its efforts to put the state on a sound financial footing’’ approached the Capital Market and secured a bond of N28.2 billion.
Mang said that the aim of the bond was to service its rising debt profile as the bonds usually had longer gestation period, payable in seven years with low interest rate.
He said that a net issue of N25.3 billion accrued to the state out of the total sum of the bond and was used in financing the loans obtained from commercial banks.
He explained that the difference between both figures, amounting to N2.9 billion went into sinking funds, which included professional fees and other service charges.
“From the N25.3 billion, Ecobank was paid N10 billion, Zenith Bank, N10 billion while FCMB was paid N5.3 billion.
“The intention of the administration is to make the burden of the loan easier for the incoming administration,’’ he stated.
According to Mang, the money was paid directly to the banks that the stated government collected the loans from, and the money came to the state government in cash.
“We heard that the state government collected bond in cash and shared among the outgoing officials. That is not true because nothing came to Plateau government in form of cash.
“The Banks were paid directly from the capital market; they only alerted us that they received money from capital market and they adjusted the loans appropriately,’’ he explained.