The Kogi State government has continued on the path of borrowing from commercial banks to purportedly pay salaries and run other recurrent expenditures, despite several bailouts from the Federal Government.
According to documents obtained by PREMIUM TIMES, the state has borrowed about N30billion from commercial banks since January 2018.
How the state utilized the bailout funds, close to N50billion, remain unclear. Although critics say a huge chunk of it was either misappropriated or diverted.
The new debts are being amassed despite the Debt Management Office (DMO) listing the state as one of the nation’s most indebted.
The DMO put the state’s debt liability at N102.4billion, as at December 31, 2017. That possibly excludes the several billions the Governor Yahaya Bello’s administration is owing contractors, civil servants and pensioners.
The state government has for long been in arrears in the payment of workers’ salaries. It cleared four months salary liability in December 2017, courtesy of the N1.2billion second tranche of the Paris Club refunds and a N10billion bank loan.
The staggering salary backlogs, spanning between seven to 25 months, suggest the huge borrowing by the state are hardly used for payment of workers’ salaries as the government usually claim in loan requests to banks.
According to the Kogi State chapter of the Nigeria Labour Congress, workers had not been paid since March. Even before then, several months of arrears had accumulated and remained unpaid.
In December 2017, the Commissioner for Finance, Idris Asiru, claimed the state government needed N30billion extra to clear arrears of salaries. The state’s internally generated revenue averages N1.2billion monthly.
An Irrevocable Standing Payment Order (ISPO) issued by the state government on March 20 to Zenith Bank for the deduction of principal and interest indicated a N3.5billion loan secured from Fidelity Bank.
The ISPO, signed by Mr Asiru, the finance commissioner and Momoh Jibrin, the accountant general of the state, followed the granting of the loan by the bank.
The state government had applied for the loan on October 30, 2017 purportedly for offsetting salaries of civil servants.